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Its commencement followed a notice of termination of a complaint to the Human Rights and Equal Opportunity Commission, pursuant to the Human Rights and Equal Opportunity Commission Act 1986 (Cth). The applicant, by his next friend, his father, complained of discrimination in the provision of educational services by the first respondent, pursuant to the Disability Discrimination Act 1992 (Cth). 2 In due course, the proceeding in this Court was brought before a registrar for mediation, and was resolved. The resolution involved the signing of terms of settlement. The terms of settlement involved the payment of a sum of money as well as costs to be taxed in default of agreement. The parties then submitted a minute of proposed consent orders, signed by both solicitors, inviting me to approve the terms of settlement and to order that the terms of settlement be kept confidential. It seemed to me that, because the applicant is a child, now six and a half years old, and because he has a number of intellectual disabilities, it was necessary for the Court to do more than simply to consent to the proposed orders. 3 By O 43, r 12 of the Federal Court Rules , the Court has power to approve settlement of a proceeding brought by a person under a disability on terms. In particular, the Court may require that any money payable, or applicable to or for the benefit of such a person, be dealt with by way of settlement or otherwise, as the Court thinks fit, for the benefit of that person. I am aware that it has been common in the past for courts that deal with many cases of personal injury, when approving the settlement of such cases brought on behalf of infants, or when giving judgment in such cases, to make orders that the amount of the settlement or the amount of the damages be paid into court. Provisions exist for the investment of such sums for the benefit of the person until the disability is passed, ordinarily until the person attains majority. It seemed to me that orders of this sort ought to be made in the present case, in order to safeguard the amount of the settlement. 4 In turn, that seemed to me to create some difficulty. The confidentiality of the terms of settlement would be difficult to preserve if the Court were to make an order that the first respondent pay into court the amount of the settlement, and to make an order that the first respondent pay the applicant's costs of the proceeding. It seemed to me that there were practical difficulties about making the former order without naming the sum that should be paid in. The latter order could be the only order that would provide authority for a registrar of the Court to tax the costs. 5 I raised these issues by means of a letter from my associate to the solicitors for the parties, dated 6 November 2008. The letter also raised questions about how any application might be made for payment out of any sum paid into court and invested, and the question of what should be done with any dispute between the applicant's parents, who live separately and apart, about whether such a payment out should be made. The result of that is that today, the parties have attended before me to make submissions about those issues. 6 In addition, there is before me a notice of motion filed by the applicant's mother, seeking to be added as a party to the proceeding. I am told that she had already made an application to the Federal Magistrates Court, with a view to trying to ascertain what the terms of settlement of the proceeding were, as she sees them as relevant to an ongoing dispute between herself and the applicant's next friend, under the Family Law Act 1975 (Cth) ("the Family Law Act "). No objection was taken by either party to the applicant's mother being joined as a respondent. It is convenient that she be bound by any order made approving the settlement, and setting out machinery for its implementation. 7 Consequent upon discussions in court today, I stood the matter down temporarily, while the solicitor for the first respondent sought instructions about the issue of confidentiality. The result of that is that I have been informed that the first respondent takes no objection to the revelation of the terms of settlement, so far as that is necessary for the pronouncement of orders in open court in the normal manner. The applicant's next friend and the applicant's mother have both signed written undertakings, directed to the first respondent, not to reveal the terms of settlement, other than in certain defined circumstances. It is clear that those undertakings are given to the first respondent and not to the Court. Breach of them would not attract any liability for contempt of court. It is also clear that, once orders are made in this proceeding, they are a matter of public record, and their content may be communicated to anybody. If it is necessary for the written undertakings to be modified to take account of that, then the parties can attend to that. 8 There is an affidavit that has been submitted as to the adequacy of the settlement. In that affidavit, the applicant's next friend details the disabilities of the applicant, and the nature of the claim that was made. The affidavit does not offer great guidance as to the adequacy of the settlement. The applicant's next friend has clearly been advised about the risks of litigation, and his possible liability for costs in the event that the applicant should lose it. The next friend of the applicant is also aware of the stress of litigation. It is necessary to bear in mind the stress that would be caused to the applicant by having to participate, to whatever extent he is able to do so, in this litigation. The next friend has been advised by the applicant's solicitor that the amount offered to settle the case is within the range of what might be awarded. What the applicant might be awarded, of course, depends upon the degree of the discrimination that occurred, if it were found to have occurred, and the extent to which the applicant has been affected by that discrimination. There is little guidance in past proceedings about the amount that might be awarded. The amount that has been agreed to resolve the proceeding is $13,000. In the circumstances, it seems to me that I should approve the settlement. 9 In the meantime, late last week, the respondent was the subject of the appointment of an administrator, pursuant to the Corporations Act 2001 (Cth). The effect of s 440D(1) of that Act is that the proceeding is stayed against the first respondent, unless the Court makes an order granting leave to proceed. The solicitor for the first respondent informed me candidly today that the settlement affects an insurer of the first respondent, and not the first respondent's assets directly. Therefore, it seemed to me appropriate that I should grant leave to proceed. Accordingly, I will do so. 10 I will order that the applicant's mother be joined as the second respondent to the proceeding. She has to be joined as a respondent if she is to be joined at all, because she is not an applicant for any relief in her own right. I propose to approve the compromise of the proceeding, and to order that the agreed sum be paid by the first respondent into court. 11 The sum is then to be invested by the registrar for the benefit of the applicant. The order will authorise the registrar to make payments out of the fund in court for the benefit of the applicant. Because the discrimination alleged is in relation to the provision of educational services, for so long as the applicant remains at school, such payment out will be for educational purposes and, thereafter, it will be for the general welfare of the applicant. Ordinarily, such an order would be limited until the infant applicant attained the age of 18. In the light of the disabilities from which this applicant suffers, I do not propose to place any such limitation on the term of the order. In other words, should there be money still remaining in court in the invested fund, with accrued interest, when the applicant attains his majority, that fund will continue to be invested for his general welfare in the light of his disability. 12 Payments out of the fund invested will be made on application supported by affidavit by either of the applicant's parents on seven days' notice to the other. One possible difficulty that arises is that, if the parents should be in dispute about whether a particular payment should be made, this Court may not have jurisdiction to deal with such a dispute in the light of the provisions of the Family Law Act . The parents are already litigating in the Federal Magistrates Court. It seems to me to be appropriate that if a dispute about whether a particular payment out should be made, it be transferred to that court to be dealt with pursuant to the Family Law Act . 13 The remaining order which will give effect to the terms of settlement will be an order for the payment of the applicant's costs by the first respondent, to be taxed in default of agreement. The applicant's mother has made her application to be joined as a party in person. She has been assisted in court today by the solicitor who acts for her in the Federal Magistrates Court, in her dispute with the applicant's next friend. The solicitor has addressed the Court and has been of great assistance to me. She has indicated that she will not be charging for her services in that regard. Accordingly, there will be no order as to the costs of the applicant's mother. 14 The orders I make are as follows. THE COURT NOTES that the first respondent denies liability in this proceeding, but has been prepared to enter into terms of settlement with the applicant with a denial of liability. 2. Gongyu Chase Xueyan Liu be joined as the second respondent to the proceeding. 3. The compromise of the proceeding is approved. 4. 5. The registrar invest the money in court in an interest-bearing account for the benefit of the applicant. 6. 7. 8. In the event that there is a dispute between the applicant's next friend and the second respondent about whether a particular payment out should be made, the dispute be transferred to the Federal Magistrates Court of Australia to be dealt with pursuant to the Family Law Act 1975 (Cth). 9. The first respondent pay the applicant's costs of the proceeding to be taxed in default of agreement. 10. There be no order as to the second respondent's costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | disability child with intellectual disabilities settlement of claim proper orders to make on approval of terms of settlement infant's claim settlement of claim proper orders to make on approval of terms of settlement payment into court and investment of money for benefit of applicant not limited to infancy because of intellectual disabilities confidential terms of settlement whether confidentiality can be maintained need to order payment into court and investment of settlement sum need to order taxation of costs parents of applicant separated applicant's father his next friend whether proper to join applicant's mother as party payments out of fund for benefit of applicant for education so long as applicant still at school resolution of disputes between parents about whether payment out should be made corporation in voluntary administration whether leave to proceed settlement affected insurer of corporation and not corporation directly leave granted discrimination practice and procedure corporations law |
The hearing of the matter commenced on Monday, 26 November 2007 and continued through to and including Friday, 30 November 2007 whereupon it was stood over, part heard, to Tuesday, 4 March 2008 at 10.15 am in the anticipation that the hearing would conclude on or before Thursday, 6 March 2008. It is now shortly after 3.00 pm on Wednesday, 5 March 2008 and, as yet, the hearing has not progressed beyond the stage that it had reached at 4.22 pm on 30 November 2007. 2 When the matter was adjourned, Mr Spiros Brendas, the first respondent, was under cross-examination by senior counsel for the applicant, Mr R. Crowe SC. The cross-examination commenced at 11.45 am on 30 November and continued until 4.11 pm, interrupted only by a luncheon adjournment between 12.52 pm and 2.01 pm. When the part heard matter was called at 10.15 am on Tuesday, 4 March 2008 Mr Orlov of counsel alone appeared for the applicant. He informed the Court that Mr Crowe was no longer leading him in the matter whereupon the question of Mr Crowe's incomplete cross-examination of Mr Brendas was raised as an issue and the Court questioned Mr Orlov's right to proceed to cross-examine him. 3 Mr Orlov proceeded to apply for leave to cross-examine Mr Brendas notwithstanding his former leader's earlier cross-examination of him. At that stage the leave application was put to one side and the balance of the morning was taken up with the hearing of a Notice of Motion filed in Court on behalf of the first, second and third respondents for further security for costs to be provided by the applicant. At 2.15 pm, when the hearing resumed, Mr Orlov made an application ore tenus, on behalf of the applicant for leave to complete the cross-examination of Mr Brendas. That application was heard instanter and was decided adversely to the applicant. The Court ordered that leave not be granted to the applicant permitting the further cross-examination of Mr Brendas by different counsel. The Court further ordered that the applicant pay the costs of the first, second and third respondents of the application made ore tenus at 2.15 pm on 4 March 2008. 4 At the commencement of the hearing today, 5 March 2008, Mr Orlov alone appeared for the applicant. The Court was informed that Mr Crowe would not be available until 16 June 2008. No application was made to have the matter adjourned until his services could again be retained. Rather, an application was made to me as the trial Judge for leave to appeal from my judgment on the question of leave being granted to the applicant to cross-examine Mr Brendas by different counsel. The judgment has now been published and is identified as Canberra Residential Developments Pty Limited v Brendas (No 2) [2008] FCA 255. However, it was made ore tenus in circumstances where yesterday afternoon's events were fresh in everybody's minds. In support of the application for leave to appeal Mr Orlov submitted that my judgment had been in error in articulating the applicable rule as I did. He submitted that I had stated the test as to when two counsel for the same party could cross-examine the same witness as one which permitted such a course only when there were 'special and exceptional circumstances'. At the time when the submission was made by Mr Orlov this morning, he was without the benefit of my published reasons from yesterday afternoon. It seems to me that the submission made by Mr Orlov in respect of a failure to correctly articulate the rule is without substance. 9 Mr Orlov further submitted that I had not focussed on the real question of balancing the relative injustice and prejudice. He submitted that I did not take matters into account which he had raised in argument and that I took other matters into account that should not have been taken into account. He submitted that the order which had been made could be characterised, or could arguably be characterised, as one directed at punishing rather than as a proper exercise of discretion. In his submissions in support of yesterday's application Mr Orlov accepted that some special circumstances needed to be shown. He submitted that the categories of special circumstances had not closed. He submitted that in the exercise of the Court's wide discretion it should be guided basically by the need to serve the interests of justice. He submitted that there was in fact not a rule, that the matter was one calling for the exercise by the Court of its discretion and that the discretion should be rooted in notions of fairness. He submitted that there was a need to balance on the other side the importance of Mr Brendas' evidence and the circumstances where the applicant had in fact run out of funds. 10 Arguably, in the unusual circumstances of this case, it could be questioned whether the applicant had, as Mr Orlov submitted, 'in fact run out of funds'. Mr Orlov proceeded to address the Court on questions of prejudice to Mr Brendas arising from the cross-examination of different counsel, the fact that the Court's discretion was rooted in fairness. He submitted that the Court could ensure that cross-examination of Mr Brendas by different counsel would not lead to prejudice and that the problems could be controlled in that regard. He submitted that the unfairness to the applicant was 'incapable of remedy'. In support of his application for leave to appeal, Mr Orlov has referred the Court to the judgment of Sheppard, Burchett and Heerey JJ in this Court in Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1992) 104 ALR 621. 11 In that case, reference was made to the decision of the Victorian Supreme Court in Niemann v. Electronic Industries Ltd. (1978) VR 431 ('Niemann'). The relevant principles flowing from Niemann were referred to as calling for consideration of two tests, the first being one which related to the prospects of the proposed appeal, the question being 'whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being re-considered by the Full Court'. The second test was stated as 'whether substantial injustice would result if leave were refused, supposing the decision to be wrong'. 12 It was indicated that the two tests should not be isolated in separate compartments and that ultimately, a discretion must be exercised on what may be a fine balancing of considerations. The Full Court considered that the principles discussed in Niemann , and in the other cases which were cited, provided general guidance which a Court should normally accept. However, there will continue to be cases raising special considerations, and the court should not regard its hands as tied in any case beyond this, that by s 24(1A) the legislature has evinced a policy against the bringing of interlocutory appeals except where the court, acting judicially, finds reason to grant leave. 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. 15 Mr Martin SC, for the first, second and third respondents, submits that no error in the statement of the relevant rule was identified by the applicant, that nothing was relevantly identified to demonstrate an error in the exercise of the Court's discretion and, further, that no substantial injustice would occur if leave to appeal were not granted for the reason that the judgment on the leave to cross-examine application would merge in any final judgment so that an appeal against a final judgment would permit the correctness of the decision of 4 March 2008 to be raised. 16 Mr Martin highlights the prejudice to the first, second and third respondents and, in particular, the first and second respondents who are individuals, submitting that the stress and strain of the litigation should not be unduly prolonged. He acknowledged that the litigation was significant commercial litigation. He further submitted that a fair outcome for his clients could not be guaranteed in respect of the payment of their costs were they to be successful. I should acknowledge that Mr Orlov indicated that, were leave to be granted there would be a need to deal with costs thrown away, security for costs of an appeal from the interlocutory judgment and security for costs of a further hearing of the substantive matter. I do not consider that questions of protective costs orders such as have been mooted are germane to the question of whether or not leave to appeal should be granted. 17 Mr Orlov is obviously in the delicate position of suggesting to the trial Judge that what he did yesterday was wrong. Analysing the matters which he has advanced in support of a grant of leave, it does not seem to me that the judgment of 4 March 2008 was attended with sufficient doubt to warrant it being reconsidered by a Full Court. Furthermore, I am in agreement with the submission of senior counsel for the first, second and third respondents that there would be no substantial injustice occasioned to the applicant were leave to be refused, supposing that my decision had been wrong. I can also see that there is a point at which the prolongation of the matter can work to the prejudice of persons such as the first, second and third respondents. 18 In my opinion, this is not an appropriate case for a grant of leave to appeal and I dismiss the application made ore tenus this morning for such a grant of leave to appeal. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | application to the trial judge for leave to appeal from an interlocutory judgment of that judge, refused practice and procedure |
The principal asset of the First Respondent, who has been declared bankrupt, is a house at 3 Wallace Street, Delahey, in the State of Victoria. The Applicant applies for orders under the Bankruptcy Act 1966 (Cth) ("the Act") requiring the First Respondent and the Second Respondent, whom the evidence satisfies me also resides at the property, to vacate the property within 21 days so that it may be sold and the proceeds made available to the creditors of the First Respondent. There are also orders sought requiring the Respondents to remove from the property vehicles, rubbish and personal chattels which have not vested in the trustee. An order is also sought that, in the event that this does not occur, the applicant be authorised to remove and dispose of such property. The application is supported by a number of affidavits. These included the primary affidavit of the Trustee, as well as a supporting affidavit from the Trustee's solicitor and affidavits of service for both the First and Second Respondents. The application and the affidavits have, I am satisfied, been served on the two Respondents. When the matter was called on this morning, they did not appear. The evidence establishes that the two Respondents reside at the property, known as 3 Wallace Street, Delahey, and have done so for some time. When the Trustee first moved to sell the property, the Second Respondent made offers, through a solicitor, to purchase the property, but those offers did not bring a sale to fruition, largely because the Second Respondent did not provide the necessary documentation, and in addition, there was an issue as to the adequacy of the sum offered by way of a proposed purchase price. Subsequently, there was correspondence between the Applicant and the Respondents in which the Applicant made plain its wish to have vacant possession of the property in order to sell it, as a result of the failure of the Second Respondent to carry forward her proposal to purchase the property. Thereafter, nothing of substance appears to have been done by the Respondents and they remain in occupancy of the property without the leave of the Applicant. The Applicant relies on ss 30 and 77 (1)(g) of the Act. Section 30 provides, relevantly, that the Court may grant injunctions and other orders which it considers necessary for the purpose of giving effect to the Act. Section 77(1)(g) imposes on a bankrupt an obligation to aid, to the full extent of his power, in the administration of his estate. It is plainly necessary that the Applicant be in a position to provide any purchaser of the property with vacant possession in order to facilitate a sale, and it is also necessary, in order to achieve that end, that the property be placed in such a condition that it may be attractive to a potential purchaser. The Respondents, despite having been given the opportunity to do so, have prevaricated and have not responded to requests that they vacate the premises. Accordingly, in my view, it is appropriate that the orders sought in the application should be made. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | where principal asset of a bankrupt is real property failure of bankrupt to vacate property granting of orders pursuant to ss 30 and 77 (1)(g) of the bankruptcy act 1966 (cth) bankruptcy |
His Honour dismissed an application for judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') which was adverse to the appellant. The matter has been comprehensively dealt with in the written submissions of Ms Wong, counsel for the respondent Minister, and I will append those submissions to these reasons rather than simply paraphrase them. 2 Long and varied experience of hearing legally hopeless applications for judicial review of Tribunal decisions, and of appeals from the Federal Magistrates Court when that court has declined to grant judicial review, has left me with no small reservoir of cynicism about the extent to which there are quite worthless and simply manipulatory approaches to the courts, and indeed to the Tribunal, by persons who in reality are a long way from being refugees of any kind, except from the relative poverty of their own countries as compared to Australia. Such cynicism is, however, unaccompanied, at least on my part, by any degree of moral condemnation because I do not know what I would do in their shoes. I suspect: probably not much different. 3 Nevertheless, not dispelling that cynical cast of mind, the present case causes me considerable unease. The appellant spoke briefly but with apparent sincerity and authority about what he says is the actual lot of Hindu refugees from Bangladesh, and of activists such as himself who would assist them, before the ruling minions of the Communist Party which governs the relevant state of India. 4 The appellant had originally put inconsistent claims before the decision-making authorities, but explained the first set as being the falsifications of an allegedly unethical migration agent. The Tribunal Member went to some pains to establish the true nature of the appellant's claims to be accorded refugee status here, and put a number of questions to the appellant. However, the Tribunal seems to have conducted its investigation into the veracity of the appellant's claims as to the matter I have mentioned only after the appellant had given his evidence orally in response to an invitation before the Tribunal. That investigation suggested to the Tribunal compelling reasons for disbelieving the appellant. However, the only information, broadly described by the Tribunal as 'sources', which found its way into evidence before the learned Federal Magistrate was a single article in an Indian newspaper. For all I know, Indian newspapers may be much more accurate in their practices than Australian newspapers, but it does not appear that evidence of that fact, if it be a fact, was before the Tribunal. 5 The appellant says that, if he had known about that article, he could have produced other similarly apparently objective newspaper articles that would support his version of matters. 6 As counsel for the Minister points out, the decision in Minister for Immigration and Multicultural and Indigenous Affairs v NAMW and Others [2004] FCAFC 264 ; (2004) 140 FCR 572 places beyond argument for the purposes of a single Judge of this Court, the proposition that it was not unlawful or a denial of natural justice (as that has been artificially limited by s 422B of the Migration Act 1958 ('the Act')) for the Tribunal to so proceed. The consequence is however that, as a matter of an ordinary Australian 'fair go' procedurally, this appellant appears not to have had one. Frankly, it ought to be a matter of shame for every Australian citizen that the law has been put into this condition. 7 I am not unaware of the essentially bipartisan approach to this and cognate questions which has been taken in the Australian Parliament. However, it does seem that some winds of attitudinal change have been blowing through the Australian community sufficiently strongly to ruffle papers in Parliamentary offices. The establishment of the Federal Magistrates Court, and improved management and procedures and, perhaps, more generous provision of personnel in the Tribunal have meant that the entire legal process, which certainly is capable of abuse, nevertheless now displays only rarely the kinds of egregious delays which probably led to the great expansion of legally worthless and merely cynical claims for refugee status being made, and to applications for judicial review of their rejection by the competent authorities. In these improved circumstances, it seems to me that there would be no great practical detriment to efficient administration and a very considerable advance in affording genuine applicants a fair hearing if s 422B were repealed. I will ask the solicitor for the Minister to ensure that these remarks reach the Minister personally. 8 If the appellant is in a position to approach the Minister to exercise her s 417 powers, no doubt he may do so. However, for the reasons set out by counsel for the Minister in her submissions, which I adopt, the appeal must fail and will be dismissed with costs, assessed in the sum of $4000. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. | migration review of decisions judicial review grounds of review natural justice exclusion of natural justice ground operation of s 422b of the migration act 1958 (cth) unjust result citizenship and migration |
Leave to appeal from the orders given by Justice Goldberg of 27 August 2007 is granted. This leave to be consolidated with the existing appeal matter No: VID 743/07. This leave to appeal hearing to progress into a direction hearing in the appeal matter VID 743/07. Appellant has leave to amend her Notice of Appeal of 16 August 2007 to include Justice Goldberg's orders of 27 August 2007, Justice Jessup's orders and reasons given to the Registrar in the VID 114/06 and Justice Finkelstein's orders and reasons given to the Registrar in VID 114/06. In general terms, they relate to Ms Bahonko's employment at a kindergarten operated by the first and second respondents which was managed by the third respondent ("Ms McEwan"). Ms Bahonko had been employed, on a trial basis, at La Kosta Child Care Centre & Kindergarten Pty Ltd ("La Kosta") on 7 November 2005. Her employment was terminated just 4 days later on 10 November 2005 on grounds of "serious misconduct" relating to allegations of physical and psychological abuse by Ms Bahonko of children at the kindergarten and verbal abuse of other staff members, including Ms McEwan: see [2007] FCA 1244 at [3] - [8] . The hearing of the applications occupied 9 separate hearing days before Jessup J between April and July 2007. Evidence relating to Ms Bahonko's appointment at La Kosta, the period of her employment and the termination of her employment were considered at length by Jessup J: see [2007] FCA 1244 at [24] - [93] . Jessup J dismissed the applications. 6 In addition, the Ms Bahonko also made claims against the Respondents in the Court's accrued jurisdiction: see [123]ff. Ms Bahonko's claim in defamation against La Kosta was upheld and Ms Bahonko was awarded $50 in damages: see [126] and [186]. The other claims in the accrued jurisdiction were dismissed. To the extent not previously dealt with by the court, the motion of which the applicant gave notice on 4 May 2007 be dismissed. The fourth respondent pay the applicant damages in the sum of $50. The application otherwise be dismissed. On 21 September 2007, Ms Bahonko amended her Notice of Appeal to appeal the Costs Orders ("the Amended Notice of Appeal"). Jessup J did not grant leave to file these applications: see [8] at paras (2) and (4) and [9] of Bahonko v Sterjov [2007] FCA 867. 12 On 30 May 2007, Ms Bahonko sought leave to appeal Jessup J's decision not to grant leave to file the statement of charge for contempt of Court. On 9 June 2007, Finkelstein J made a direction to a Registrar under O 46 r 7A of the Federal Court Rules that the notice of motion dated 30 May 2007 be refused for filing. It did not " finally " determine " the parties' substantive rights " ( Cubillo v Commonwealth [2001] FCA 1213 ; (2001) 112 FCR 455 and Carr v Finance Corp of Australia Ltd (No 1) [1981] HCA 20 ; (1981) 147 CLR 246 at 248 per Gibbs CJ and 253-54 per Mason J) but dealt with questions about whether the Substantive Orders would be stayed pending the hearing and determination of the Appeal. An application for leave to appeal may be heard and determined by a single judge: ss 24(1A) and 25 (2) of the Federal Court Act . 16 It is well established that in cases where the interlocutory decision does not determine substantive rights, particular caution is required and "a tight rein" must be kept on appeals ( Décor at 400). This is such a case. Ms Bahonko must satisfy both limbs of the test. She does not. 17 The decision is not attended with any doubt, let alone sufficient doubt to warrant reconsideration by a Full Court. Even if the decision was attended with doubt, I am not satisfied that Ms Bahonko would suffer any injustice let alone " substantial injustice" in the event that leave was refused. 18 As Goldberg J identified, O 52 r 17(1) of the Federal Court Rules provides that an appeal " shall not" operate as a stay of execution of the orders appealed from " except so far as ... a Judge... may direct" . Goldberg J was entitled to determine, in light of all the circumstances, whether the matter was an appropriate case for the grant of a stay: Powerflex Services Pty Ltd v Data Access Co (1996) 67 FCR 65. Clearly, it was not. First, his Honour correctly identified that paras 1, 2 and 3 of the Substantive Orders were not the appropriate subject of a stay: see [2007] FCA 1377 at [7] - [10] , [15] and [16]. Neither was it appropriate for Ms Bahonko to seek to suspend the resolution of the substantive applications by seeking a stay of para 4 of the Substantive Orders dealing with submissions on costs. In any event, the Costs Orders were made by Jessup J on 31 August 2007. There is no utility in Ms Bahonko seeking leave to appeal from Goldberg J's refusal to stay para 4 of the Substantive Orders. 19 In these circumstances, not only is there no doubt about the correctness of Justice Goldberg's orders, there can be no injustice in refusing Ms Bahonko an opportunity to appeal. 20 Ms Bahonko in her affidavit of 3 September 2007, and during the course of her oral submissions, made allegations which are properly described as scandalous. They include allegations of criminal conduct and conduct constituting abuse of office. Those allegations are unsupported and insupportable. Ms Bahonko submitted that she required access to the transcript of the hearing before Goldberg J to make good her allegations. That access is refused on a number of bases. First, access to transcript has never been regarded as an indisputable requirement of a fair trial: see Young v Secretary for Department of Family and Community Services (2003) 76 ALD 118 at [30]. Secondly, the hearing before Goldberg J did not involve viva voce evidence. Both parties were present at the hearing and made submissions. Moreover, by reason of the nature of the application before me (an application for leave to appeal from the orders of Goldberg J), it was necessary for me to consider the correctness of the decision of Goldberg J. As stated above, that decision is not attended with any doubt. Access to the transcript of proceedings before Goldberg J would be futile. For those reasons, access is refused. 21 In the circumstances, I would not grant Ms Bahonko leave to appeal Goldberg J's refusal to grant a stay of the Substantive Orders. I would dismiss paras 1, 2 and 3 of the Notice of Motion and order Ms Bahonko to pay the respondents' costs of and incidental to those paragraphs in the Notice of Motion. 22 Finally, there was no doubt that Goldberg J correctly refused to grant an injunction in the alternative to a grant of a stay. As Goldberg J said the appropriate process was for Ms Bahonko to appeal against the Substantive Orders and the Costs Orders, as she has now done. 23 During the course of her oral argument, Ms Bahonko contended that if I was not minded to grant her leave to appeal Goldberg J's refusal to grant a stay of the Substantive Orders, then she sought a stay of the orders of Goldberg J. That contention is without formulation. There is no legal basis for the grant of stay. The appropriate procedure is not a grant of stay but an application for leave to appeal. That application was made by Ms Bahonko and failed. Even if a legal basis for a grant of a stay existed, a grant of stay would be of limited practical utility. The Substantive Orders would remain on foot. In relation to the costs order made by Goldberg J, there is no basis for a grant of stay. The application for a stay failed. 25 The application is refused. It is necessary to address each of the matters Ms Bahonko seeks leave to add separately because the grounds for refusal are different. The application is dismissed. The application is dismissed. A direction under O 46 r 7A is not a judgment able to be subjected to an appeal by Ms Bahonko: Bizuneh v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 42 ; (2003) 128 FCR 353 at [19] per Lee, Whitlam and Jacobson JJ. See also Paramasivam v Randwick City Council [2005] FCA 369 at [40] and [41] per Sackville J. 28 Finally, Ms Bahonko referred me to a Notice of Motion dated 21 August 2007 seeking, amongst other things, leave to appeal the refusal by Finkelstein J of an injunction. The application was determined on the papers by Finkelstein J on 21 August 2007. The application was made without notice to any party. In so far as Ms Bahonko's reference to the Notice of Motion is a renewal of her application for an injunction, I would refuse it. The application is vexatious. The allegations are unsupported and insupportable. Moreover, an injunction would be futile. There is nothing to restrain. The Substantive Orders and the Costs Orders have been made. They have been appealed by Ms Bahonko. In so far as the application is an application for leave to appeal, for the same reasons I would refuse leave. Ms Bahonko was wholly unsuccessful. Ms Bahonko shall pay the respondents' costs of and incidental to the Notice of Motion. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | application for leave to appeal interlocutory orders where interlocutory orders dismissing an application for stay of substantive orders pending the determination of an appeal where stay was without utility and / or inappropriate because substantive orders were the subject of a pending appeal application to amend substantive notice of appeal where additional grounds were without merit where additional grounds did not involve an appellable decision practice and procedure |
The patent has provided Merck with a monopoly for 20 years. Merck says it has used the process to produce a drug which is used medicinally in the treatment of osteoporosis. The income which has been generated by selling the drug is substantial. Another large pharmaceutical company, Alphapharm Pty Ltd, now seeks revocation of the patent. It is conceivable that Alphapharm is doing so to enable it to use the process to manufacture and sell its own drug, though, for the moment, that is a matter only for speculation. One of the grounds for revocation relied on is inutility. Simply put, that is an allegation that the process, as described in the patent, is not useful. If the speculation just referred to is correct, Alphapharm's allegation of inutility is redolent with irony. Alphapharm seeks discovery of documents from Merck concerning the use of the process unlimited by time. Merck resists this claim for discovery. It counters with a contention that the basis on which inutility is alleged by Alphapharm is, in whole or substantial part, untenable. Those two issues are addressed in this judgment. A notice of motion filed by Merck on 30 June 2006 is the vehicle for addressing these two issues. Merck is the registered proprietor of Australian Letters Patent No 625704, the title of which is "Process for preparing 4-amino-1-hydroxybutylidene-1, 1-bisphosphonic acid or salts thereof". The patent was granted on 1 December 1992. On 29 November 2005, Alphapharm commenced proceedings for revocation of claims 1 to 29 of the patent. By its notice of motion, Merck challenges the foundation of Alphapharm's revocation application insofar as it alleges inutility. Merck contended that the allegation of inutility must fail having regard to Alphapharm's particulars. If these orders are not made, Merck nonetheless seeks an order limiting its obligation to give discovery in relation to the issue of utility. While inutility has long been a ground for a patent's revocation, it has only recently been added as a ground for objection to grant. Alphapharm's pleading on this issue as particularised, is that "the alleged invention as claimed in each of claims 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 12, 18 and dependent claim 13, 14, 15 and 29 is not a patentable invention within the meaning of s 18(1)(c) of the Act in that it is not useful. Merck seeks that the relevant part of the proceedings be struck out under O 11 r 16 of the Federal Court Rules ("the Rules"), dismissed under O 20 r 2 of the Rules, or that summary judgment be given in Merck's favour under s 31A of the Federal Court of Australia Act 1976 (Cth). An order can be made under O 11 r 6 and O 20 r 2 if no reasonable cause of action is disclosed, either in the pleading or the relevant part of the proceeding. The standard to be applied is a stringent one. Section 31A was inserted into the Act by the Migration Litigation Reform Act 2005 (Cth) and applies to proceedings commenced from 1 December 2005. It introduces a new statutory test for summary disposal of a proceeding. Section 31A(3) relevantly provides that that part of the proceeding need not be "hopeless" or "bound to fail" in order for judgment to be given under the section. Merck submitted that the section provided a lesser test that the test which applies under the other provisions. Consideration of summary disposal It is unnecessary to discuss the scope of s 31A or whether Alphapharm's claims based on inutility should be struck out on the other grounds contained in the notice of motion. Merck invited the Court to construe the patent and conclude that a person deploying the process described in the patent (so construed) would achieve the result it promised and would be able to do so, for example, without the specification of temperatures in claim 1. Alphapharm raised, as a threshold matter, whether it was open to the Court to construe the patent as Merck invited in the absence of expert evidence. In Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 Gummow J (at 524 and 542) cautioned against the Court construing a patent by seeking to place itself in the position of a reader skilled in the art without expert evidence which would permit it to view the patent through the eyes of such a reader. Those observations were made in relation to a claim of lack of novelty. However, it would appear that they are also pertinent to the assessment of utility, at least where the patent concerns matters not demonstrably within the domain of ordinary human experience such as simple mechanical devices. This is the import of observations of Gummow J in Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 at 232 referring, in turn, to the observations of Menzies J in Welch Perrin & Co Pty Ltd v Worrel [1960] HCA 91 ; (1961) 106 CLR 588 at 601. In my opinion, the contentions of Alphapharm about inutility should not be rejected as unarguable or having no reasonable prospects for success without the benefit of expert evidence explaining that, for example, the steps in claim 1 could readily be undertaken by a chemist without any guidance about what temperature or temperature ranges or to apply when doing so. Ultimately, of course, there may be evidence to that effect. However, it has not been led by Merck in this notice of motion. I do not propose to consider dismissing or striking out any aspect of Alphapharm's claim in the absence of such evidence. I should add that even if evidence of this type had been led, there would have been cogent reasons for not summarily disposing of part of Alphapharm's claims, even assuming I had power do so either under s 31A or the Rules concerning summary disposal. Determination of the issues raised by Merck is probably better left to the trial. Discovery by Merck on issue of utility Alphapharm presses discovery of the class of documents described as "All documents relating to the utility of the processes claimed in the Patent". Alphapharm intends to capture in this class of documents all documents reporting results of experiments which prove or disprove the allegations made in the particulars. As an example of documents that would be directly relevant, Alphapharm pointed to documents which demonstrated the conduct of experiments within claim 1 at different temperatures, and submitted that documents relating to experiments conducted at temperatures at which the claimed reaction did not occur would tend to directly support Alphapharm's case. It submitted that similar arguments would apply in relation to documents proving or disproving the allegations made in the other particulars. Merck seeks orders limiting discovery in two ways. First, Merck resists the discovery of documents relating to experimental work, testing or evaluation conducted after the date of grant. Merck has agreed to discover documents up to the date of the grant. The issue is whether documents relating to work conducted post-grant are discoverable. Merck submitted that although s 18(1)(c) of the Act does not identify or suggest the date at which utility is to be determined, the relevant date is the date of the grant (or possibly earlier). It was said that if Merck's position was accepted, what Merck did after the grant was not relevant, so documents relating to experiments after that date should be excluded from discovery. His Honour considered the meaning of the words "is not entitled to the patent" which appear in the ground of revocation under s 138(3)(a) of the Act . I am far from persuaded that this construction is correct and it seems to be contrary to the views of Cooper J in Stack v Brisbane City Council (1999) 47 IPR 525, 536 and Crennan J in JMBV Enterprises Pty Ltd v Camoflag Pty Ltd [2005] FCA 1474 , [130]-[131]. But even if this construction were correct, the way in which I would read the section is that if a person were not entitled to the patent at the time of grant then, at least in most cases, that non-entitlement would be (as here) a continuing state of affairs. So there is really nothing in the point. Merck also submitted that there was some authority supporting the proposition that utility should be determined at a date earlier than the grant, being the date of filing or the date of the invention, citing Edison & Swan United Electric Light Company v Holland (1889) 41 Ch D 28 and Patent Gesellschaft AG v Saudi Livestock Transport & Trading Co (1996) 33 IPR 426. Alphapharm contended that documents within the class sought should be discovered, regardless of when the experiments were conducted. It submitted that the question of whether an invention was useful, and whether usefulness was to be assessed at a particular point in time, was a matter of fact to be determined on the basis of the particular promises made by the patentee. In the present case, the promise was not confined by time to the date of the grant. The question of whether or not the promise was fulfilled depended upon objective scientific facts (for example, whether a reaction was to be conducted at certain temperatures), such that the date at which such facts are proved or disproved was irrelevant. It likened the promise in this case to that in Norton and Gregory Ltd v Jacobs (1937) 54 RPC 271, which held that the date on which certain reducing agents would not achieve the promised result was irrelevant. A distinction was drawn between the present case and cases where a particular date is relevant because of the nature of the promise, as in Lane Fox v Kensington & Knightsbridge Electric Lighting Co [1892] 3 Ch 424. In that case, the promise was the invention would result in "improvements", which, in Alphapharm's submission, was a promise inherently confined to a particular point in time. Alphapharm also submitted that it was at least arguable that s 18(1)(c) of the Act did contain an indication as to the date for determining utility. The argument was that since the paragraph requires that the invention claimed "is" useful, then where the patentee promised that a fact was true, then that fact must be correct at all times during the life of a patent. In addition to the time-based exclusion, Merck argued that it should not be required to discover documents relating to the adaptation of processes for manufacturing purposes. It claimed that the issue of utility was directed at whether the invention claimed did not attain the result promised by the patentee and not whether following the directions in a patent was commercially viable (citing Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 and Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19 ; (1998) 194 CLR 171). It submitted that although documents showing that commercial manufacturing was possible might be relevant, documents relating to commercial production (such as manufacturing documents, including scale up documents) were not relevant. Alphapharm claimed that manufacturing documents were relevant to utility in this case because of the particular promises of the invention which include a specific reference to commercial manufacturing capabilities. It submitted that the cases relied upon by Merck to support the irrelevance of commercial practicality were not on point because in those cases, the patentee did not promise commercial practicality. It also submitted that on Merck's evidence (being the affidavit of John Simpson sworn 2 June 2006), commercial manufacture of the process claimed in the patent did not commence until 1993. It referred to the fact that the Merck's proposed exclusion on manufacturing documents, as expressed in order 4 of its notice of motion, expressly referred to "documents relating to the adaptation of the processes claimed". Those factors, it was said, made it clear that the process the subject of the promises required adaptation in order to make them work commercially. Such documents were therefore clearly within the scope of discoverable documents. As an additional or alternative basis for limiting discovery in the way proposed, Merck submitted that the Court should exercise its discretion not to order discovery beyond what Merck offered to discover, on three main bases. First, it submitted that Alphapharm's case based on inutility, as particularised, was unarguable or unlikely to succeed. Secondly, the requested discovery would be oppressive for Merck, as it would have to trawl through 17 years of documents. In support of oppressiveness, Merck relied on the affidavit of John Simpson sworn 2 June 2006. His evidence was that the documents relating to manufacture of the drug comprised over 100,000 pages, held at the plant in the Republic of Ireland. The costs to Merck of discovering those documents, including the costs of solicitors travelling to Ireland to review the documents, was estimated as being in the order of $55,000. That amount excluded any allowance for time spent by the respondent's employees in assisting with the task. Thirdly, the interests of justice would not be served by requiring further discovery because Alphapharm's case was weak and the discovery sought was a fishing expedition. Alphapharm resisted the proposition that the Court's discretion should be exercised as proposed by Merck. It submitted that as a matter of policy, Merck should not be able to rely on an arbitrary date limitation on discovery to avoid having to discover documents which are directly relevant and probative. Consideration of discovery The Court has a discretion to control discovery. Parties do not have an unfettered right to obtain discovery from other parties of any document, including documents which might, for example, fall within the classes of documents identified in O 15 r 2(3)(a)-(d), being any document on which the party called on to provide discovery relies, adversely affects their case or adversely affects or supports another party's case. They contend that the starting point is their right to discovery. That would not seem to be a correct approach. If it be correct to speak of a party's right to access documents by this process, and that seems doubtful, it is only a right in a qualified sense. This is especially so under the rules of this Court. The Court has a discretion under O 15 r 3 to make an order for discovery and rr 2 and 15 of that order make plain that the Court is to avoid an unnecessary discovery: Cameron v Rural Press Limited (Full Court, 20 July 1990, unreported); also Practice Note 14. That is a matter of public interest. In that context it may be understood that the Court's processes, in requiring discovery, will only be utilised as far as is necessary to ensure justice as between the parties and no more: see Home Office v Harman [1983] 1 AC 280, 380 applied Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34,37,38 and Trade Practices Commission v CC (NSW) Pty Ltd (1995) 58 FCR 426, 436. It may conceivably be the priority date, but that is a matter of detail which does not require resolution at this time. Importantly, an application to revoke on the grounds of utility does not raise the question of whether, since grant, the patent has remained useful. My reasons for reaching this conclusion may be stated briefly . Ultimately, the relevant time at which (or period in which) utility is to be assessed is a matter of construction of the Act and informed by authorities construing cognate legislation. I am not aware of any authority in this country or the United Kingdom which decides that a patent, in order to be immune from revocation on the grounds relating to utility, must concern an invention which not only was useful at the time of grant but also remained useful during the period of the statutory monopoly. There is authority to the contrary: Lane Fox v Kensington and Knightsbridge Electric Lighting Company . While s 138(3)(b) is expressed in the present tense - "that the invention is not a patentable invention" - that formulation raises for consideration whether the invention is useful for the purposes of s 18(1)(c). It therefore directs attention to whether the invention is useful at the time it was sought to be patented. This construction appeared to be favoured by Finkelstein J: see Conor Medsystems, Inc v University of British Columbia (No 2). It is true, as Alphapharm submitted, that evidence concerning whether a process involving or relating to chemical reactions was useful at a particular point in time (such as in the years following grant) could be probative of whether a patent was useful at an earlier point in time (such as the time of grant). Given the comparative immutability of the laws of physics, that proposition is almost certainly correct. However, that logic does not dictate that Alphapharm can require Merck to give discovery of documents concerning experiments and the like for the years following the grant of the patent. The documents Merck may have which existed at the time of grant and which might tend to establish (or raise doubts about) the usefulness of the process are appropriate to be discovered. However, to require Merck to give discovery of documents concerning events after the grant of the patent would, in my opinion, entirely skew the process of discovery and be incongruent with the balance referred to by Kiefel J in the passage quoted above. I apprehend that this conclusion may resolve issues concerning electronic discovery and also issues concerning the manufacturing process. If this is not so, I will hear the parties further on those issues. The only order I propose to make is that the parties bring in short minutes to give effect to these reasons within 7 days. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | validity of grant claim that respondent's patent, granted in 1992, is invalid on grounds including inutility motion by respondent to strike out applicant's inutility pleadings or in alternative, orders sought for summary dismissal or summary judgment of part of proceedings alleging inutility whether expert evidence necessary discovery where applicant seeks discovery of all documents relevant to issue of utility whether documents relating to experiments conducted by respondent post-grant excluded whether manufacturing documents excluded discretion to limit discovery 'is useful' patents practice and procedure words and phrases |
The application was filed on 6 November 2009. The application relies upon a failure on the part of the company to comply with a demand within the period for compliance set out in s 459F(2) of the Corporations Act . The matter came before the court some three weeks ago and on that occasion, Mrs Victoria Walters applied for leave to appear on behalf of the company. The relevant director of the company is Mr Walters, the husband of Mrs Victoria Walters. On that occasion, Mrs Walters was accompanied by her son and she sought an adjournment of the application, essentially on two grounds. The first ground was that Mr and Mrs Walters had entered into a contract for the sale of a property at a price of $610,000. Settlement of that property was programmed to occur on 14 January 2010 and the net proceeds after the discharge of encumbrances was said to be approximately $120,000. Mrs Walters, on behalf of the company, sought the adjournment on the footing that those funds, when they became available at settlement, would be paid to the plaintiff and there was some discussion of the possibility of the Deputy Commissioner of Taxation making arrangements to attend at settlement and obtain a bank cheque for the balance funds. Those funds would then have come from the sale of an interest in the property by the vendors which is not the company itself. In addition to those matters, Mrs Walters's son was present and he was invited to approach the bar table and advise the court what circumstances were then prevailing. He told the court that he was in the process of seeking to raise funds in relation to a property development project and his expectation was that an approval was likely to occur before 23 December 2009 and, once an approval was obtained, he intended to make $500,000 of the approved funds available to his parents to enable them to discharge the balance of the debt to the Deputy Commissioner of Taxation. On that occasion, I advised Mrs Walters that I would adjourn the matter until 23 December 2009 on the basis that the contract was likely to settle on January 2010 and that Mrs Walters's son had an expectation that a finance approval might be forthcoming by the return date. On the return date, the court would examine the extent to which Mrs Walters and her son had been able to make good some of the things which would influence the question of whether a winding-up order ought to be made. I also directed Mrs Walters and her son to file affidavits deposing to the various matters which had been put to the court from the bar table. I pointed out at that time that the statements made were simply statements from the bar table and they would need to be put in the form of affidavits as admissible evidence, as statements from the bar table do not constitute evidence of the matters upon which they would seek to rely as informing the question of whether a winding-up order ought to be made or whether the application ought to be further adjourned. Subsequently, Mrs Walters prepared an affidavit as did her son, Gary John Rose, and Mrs Walters sought to fax those documents to the court. The Registry refused to accept them in the form in which they were proffered. I have seen a facsimile of those affidavits and I have before me now the original affidavits. Accordingly, I give leave to read and file the affidavit of Victoria Walters sworn 21 December 2009, and I give leave to read and file the affidavit of Gary John Rose, the son of Mrs Walters, also sworn 21 December 2009. Nor does it identify who the financier might be, the state of the application, whether there is any preliminary approval subject to conditions, or any of those sorts of matters. The affidavit is simply one paragraph and it is handwritten. It gives no content or substance to those matters. Mrs Walters has also filed an affidavit which goes to the question of the contract and the settlement date in 2010. I pointed out on the last occasion the matter was before the court that it would be very important for Mr Walters, the director of the company, to appear and seek leave to appear on behalf of the company or, alternatively, to appear by lawyers. Unfortunately, Mr Walters is engaged in the business of the company and is not appearing before the court and is not seeking leave to represent the company. Mrs Walters is present and she seeks leave to appear on behalf of the company in relation to these matters. I give leave to Mrs Walters to appear on behalf of WR Estates Pty Ltd. She seeks a further adjournment of the matter. Mrs Walters, and thus the company, asks for an adjournment essentially on two grounds. The first is that the contract of sale which was previously before the court and is now before the court again is scheduled for settlement on 14 January 2010, and the court is advised by Mrs Walters that the net balance upon settlement after discharge of encumbrances will be $120,000. Therefore, it is put that the matter ought to be adjourned as these funds will become available to the Commissioner in part-discharge of the debt. The second basis upon which the matter is sought to be adjourned is that Mrs Walters has assembled a range of contracts which WR Estates Pty Ltd, as a real estate agent, has been instrumental in securing between various vendors and purchasers, and it is said that the commissions due to the company arising from this parcel of contracts will be $364,000. It is said that these commissions will flow into the company in the period January to March 2010. Thus it is said that the net proceeds from the contract of sale of the house property will be available by 14 January 2010, and the cash-flows from these commissions will be available between January and March 2010. It follows, it is said, that the debt due to the Commissioner will be fully discharged by March 2010. The plaintiff has sought certain material from the defendant and a letter has been put before the court from accountants called Farr RasmussenLucas dated 22 December 2009 marked "To whom it may concern". The letter seeks to identify the steps that the accountants are required to undertake and the difficulties of undertaking those steps within the immediate period due to the forthcoming Christmas break and other circumstances. The debt due to the Commissioner is a debt of $333,274.02. It represents the amount due and owing on a running balance in respect of the company's taxation affairs and interest on that running balance. The period of the debt in relation to the taxation obligation is for the financial years ending 2005 to 2009. In that sense, the amount claimed by the Commissioner as a debt due to the Commonwealth in respect of tax obligations (ultimately on behalf of the people of Australia) is a significant sum and is outstanding over a reasonably lengthy period. The effect, of course, of the failure of the company to comply with a statutory demand made upon it for payment of the amount recited in the demand notice is that a presumption of insolvency arises. That presumption is, of course, rebuttable. However, it is perfectly plain that the presumption of insolvency has not been rebutted and what is put forward is that a discretion ought to be exercised to adjourn the matter to enable further steps to be investigated by the accountants and then implemented with a view to discharging the debt over a period, in effect, from January to March 2010, at the outer boundary of the proposed payment period. The merits of that matter are said to be, of course, that there are demonstrated cash-flows and that there will be further funds arising out of additional contracts. However, the position seems to me to be that the company has not been able to demonstrate or rebut the presumption of insolvency. The company seeks an adjournment to enable further matters to be investigated and steps implemented which might have the effect of discharging the debt. The company continues to trade in circumstances where there is a presumption of insolvency and, since the company has not been able to put forward clear, comprehensive affidavits arising out of the matters raised on the last occasion the matter was before the court, which depose to all of the relevant matters, I am satisfied that the company is insolvent and that the presumption of insolvency has not been rebutted. I am satisfied that a discretion ought not to be exercised to further adjourn the matter, in all the circumstances. Accordingly, I propose to make an order that the defendant be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth), and an order that a liquidator be appointed. I will further order that the costs of the plaintiff are paid out of the assets of the defendant. Accordingly, I make orders in terms of the draft orders which will be: WR Estates Pty Ltd ACN 111 955 572 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). Gregory Michael Maloney, an official liquidator, be appointed liquidator of the company. The plaintiff's costs be fixed in the sum of $1137.31 and reimbursed in accordance with section 466(2) of the Corporations Act 2001 (Cth). I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application to further adjourn an application for an order that the defendant be wound up in insolvency insolvency |
The orders made by the Registrar were that Australvic Property Management Pty Ltd ('APM') be wound up in insolvency under the Corporations Act 2001 (Cth) ('the Corporations Act ') and that Mr Michael Wesley McCann, an official liquidator, be appointed liquidator of the company. 2 The orders were made on the application of Xat Ky and Siv Cung Heng ('the creditors') and the application was based on the failure of APM to pay a debt which was the subject of a statutory demand served on APM by the creditors. APM did not apply under s 459G of the Corporations Act for an order setting aside the statutory demand. 3 The statutory demand was served on the registered office of APM on or about 30 November 2006 and the application by the creditors for a winding up order was made on 15 March 2007. The Registrar made the orders referred to above on 23 May 2007 and the application for review by APM was made on the same day. 4 At the time the statutory demand was served Brian Leslie Fisher was the sole director and secretary of APM. 5 The application for review is brought under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) and is a hearing de novo (s 35A(6)). 6 On 23 May 2007, I stayed the operation of the winding up order. That stay has remained in place throughout the hearing of this matter. A number of companies and individuals appeared as supporting creditors, although APM disputed certain of these claims. 7 As I have said, APM did not make an application to set aside the statutory demand under s 459G of the Corporations Act . APM seemed to dispute the debt it is said to owe to the creditors. By reason of s 459S of the Corporations Act APM may not, without the leave of the Court, oppose the application for it to be wound up in insolvency on a ground that it could have relied on but did not so rely on for the purposes of an application by it for the statutory demand to be set aside. 8 No application for leave under s 459S was made by APM. In the context of an adjournment application by APM, hearsay evidence was introduced by APM through Mr Fisher seeking to dispute the debt owing to the creditors. This was on the basis that the promissory notes the basis of the statutory demand were effectively altered to roll over payment for a further period of time, and that the promissory notes were executed without the authority of APM. Such evidence is not admissible in proceedings of this nature, and no reliance could be placed upon s 75 of the Evidence Act 1995 (Cth) to introduce such evidence. In any event, as no application was brought pursuant to s 459S, no effort was made to show the Court that it could be satisfied that the ground would be material to proving that APM was solvent (s 459S(2)) as distinct from just leading evidence as to solvency generally. No explanation was provided by APM as to why it did not apply under s 459G of the Corporations Act to set aside the statutory demand. 9 In these circumstances, I am proceeding on the basis that the application by the creditors is an application based upon a failure by APM to comply with a valid statutory demand. No argument was addressed by counsel for APM to suggest there was any irregularity or defect that would prevent the statutory demand from being relied upon in this proceeding. 10 By reason of APM's failure to comply with the statutory demand it is presumed to be insolvent: s 459C(2) of the Corporations Act . APM seeks to establish that it is not insolvent and whether it has discharged the onus of proving that it is not insolvent is the important question before me. The adoption of a cash flow test for solvency does not mean that the extent of the company's assets is irrelevant to the inquiry. 13 I have concluded that APM has failed to demonstrate that it is solvent, it having the burden to the requisite civil standard to prove solvency. I have reached this conclusion for a number of reasons. 14 In order to demonstrate solvency, reliance was finally placed by APM upon a report of James Edward Miller dated 30 August 2007, an expert accountant, who prepared a Balance Sheet and Profit and Loss Statement of APM as at 30 August 2007 and provided a report as to solvency as at 30 August 2007. 15 Mr Miller put a number of important and significant qualifications in his report that would affect his conclusions. The material he relied upon was not audited, he relied upon representations of third parties as to their current intention, and unverified valuations, and he did not have a complete set of the records of APM because they were not available. Mr Miller could not make any proper assessment of assets which were said to arise from intercompany transactions, the amount of $590,638 out of $775,118.19 shown as current assets was said to be "risky", and APM had a number of properties in which a mortgagee had taken possession. It would appear that APM's liabilities are increasing faster than its assets, looking at the course of evidence that has been adduced by APM during this hearing. 19 Assuming all the factors raised by APM in its favour as to its liability to pay the promissory note holders and other loans, as indicated by Mr Miller in his report, I am not satisfied that in view of the qualifications to his report and the material he relies upon, APM has overcome the onus of proving solvency. The factors upon which his conclusion of "marginal" solvency are subject, putting aside the accuracy of the Balance Sheet, depend upon the immediate sale of the properties and net proceeds being not only placed with the Court, but also available to the creditors and the other supporting creditors who APM accepts have valid claims. In addition, Mr Miller recognised that the high interest rates accruing to the loans of APM meant that, putting aside any other calls upon any money in court, these funds would be needed to repay loans in order to minimise ongoing interest charges and that the sale of properties must accordingly be made immediately. The evidence before the Court does not indicate that this will or can occur in any reasonable time frame, or that the moneys from such sales will be available in any event to pay creditors. 20 I have given APM ample opportunity throughout this hearing to demonstrate solvency, and it has already had the benefit of substantial time. Adjournments have been allowed to permit APM to put further material before the Court, and the "best" position has been that put by Mr Miller. 21 I have also allowed some time to observe whether money held in the Supreme Court of Victoria, to which APM says it is entitled, could be paid into the Federal Court to satisfy the claims accepted by APM, including the claims of the creditors. I did this because it was submitted on behalf of APM that the proceedings instituted in the Supreme Court by APM, seeking that it be paid the money in court in priority to other competing claims, would be dealt with quickly and I considered that APM should be given the opportunity to pay out the creditors it accepted had valid claims. However, it appears that whilst expedition has been given to that proceeding, the money in court is in substantial dispute, and I cannot be satisfied that that proceeding will be completed within the reasonable future or that the money held in the Supreme Court of Victoria will be available to the creditors. 22 I am mindful that the Supreme Court proceedings are in the Commercial List, and that the court will be in a position on 17 October 2007 to determine how the matter is to proceed. There is a possibility the matter may be heard in late October 2007, but having regard to statements made by the various participants at the latest directions hearing before the Supreme Court and the content of the statement of claim in the proceedings, I think this is extremely unlikely. The learned judge in the Supreme Court did indicate that if the matter was ready for trial and APM could convince the court on proper affidavit material there was an urgency about the matter, he would endeavour to hear it in the last week of October 2007. However, his Honour did suspect that the matter would not be ready and, in any event, the matter was not set down for a hearing. Therefore, I am not satisfied that the proceedings before the Supreme Court (which do involve a number of competing claims and likely factual disputes) will be resolved within any reasonable time. 23 In any event and perhaps more significantly, even assuming in APM's favour that all the funds in the Supreme Court are in fact the assets of APM, and would be available to pay the creditors and those creditors who APM regard as making valid claims, I would still find that APM has failed to prove its solvency. This is because this was the very assumption in Mr Miller's report, which report in my view did not demonstrate that APM was solvent even on this assumption. Therefore, even if APM is totally successful in the Supreme Court of Victoria, this would not materially affect the position I have now reached as to the future of APM. Therefore, to allow APM any further time, and await the result of the Supreme Court proceedings, would be of no consequence. 24 I should indicate that Mr Miller was not cross-examined upon his report of 30 August 2007 by any of the creditors, supporting creditors or the Australian Securities and Investments Commission ('ASIC') (which was given leave to intervene in these proceedings). APM contended that in these circumstances, because of the rule in Browne v Dunn (1893) 6 R 67, I should ignore the criticisms made of his report, or give APM the opportunity to recall Mr Miller to address the criticisms. This gives the witness an opportunity to respond to the allegations. The reason this is done is as a matter of basic fairness. See Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1 per Hunt J. However, they will usually be related to the central object of the rule which is to secure fairness. It may arise during the trial. Thus, where a party fails to cross-examine a witness at all or on a particular matter, it may be prudent for the trial judge at the time to draw the attention of counsel in an appropriate way to the effect this may have on the later conduct of the trial. It may be that the question arises at a later stage in the trial when counsel seeks to call evidence contradicting the witness or discrediting his evidence, or seeks to address upon the basis that the witness' evidence is untrue. The trial judge may then have to determine what course should be followed. Sometimes the interests of justice may be served by having the witness recalled for cross-examination. Sometimes the circumstances may be such that the only way in which justice can be achieved is by directing that, for example, it is not open to counsel, in address, to make such suggestion. What is to be done will depend, as I have said, upon the circumstances of the case. Another possible consequence will be the exclusion of evidence that challenges the witness' account with respect to those matters upon which there was no cross-examination. A third possible consequence will be to permit the witness to be recalled so that the breach can be remedied. One thing is clear. The rule is not simply to be ignored. Indeed, s 46 of the Evidence Act 1995 (Cth) specifically enables the recall of a witness where there has been a breach of the rule and therefore implies its continued existence. 27 Mr Miller provided an earlier report, providing a Balance Sheet as at 15 June 2007, upon which he was cross-examined. The purpose of that report was to demonstrate the solvency of APM, and was in a similar format to the report of 30 August 2007. Many of the matters raised by the parties (including ASIC) in cross-examination in respect of the earlier report were repeated in his later report of 30 August 2007, although in some respects he had already conceded their inappropriateness in relation to the Balance Sheet included in his report of 15 June 2007. Prior to receipt of Mr Miller's report dated 30 August 2007, both APM and Mr Miller were well aware of the range of matters needed to be considered by them, as canvassed in prior cross-examination and earlier submissions. It could not be said that Mr Miller or APM were not made well aware of the matters that the other parties (including ASIC) were going to put to the Court. There has been no attack upon the credit of Mr Miller at any stage. I accept Mr Miller as a credible expert seeking to assist the Court. The attack made was upon the appropriateness or otherwise of his approach and the material he relied upon. 28 In any event, whilst I accept that the rule in Browne v Dunn may apply to expert testimony, there is no rule of law requiring that evidence not challenged in cross-examination be accepted. In this case, APM has an onus of proof to establish solvency. The legal approach to such a task is well established on the authorities. The real attack in this case was that Mr Miller's evidence as to solvency should not be accepted as it was based upon incomplete records and unsubstantiated source material, a mistaken approach to what needs to be shown to prove solvency, and the fact that the qualifications made to the report were such that the conclusion of "marginal" solvency could not be accepted by this Court. It seems to me that all a cross-examiner would have put to Mr Miller on this basis would be the very qualifications to his report Mr Miller himself acknowledged, which in themselves show his report of 30 August 2007 could not satisfy the Court as to solvency. APM and Mr Miller have not been unfairly treated. APM came to Court bearing the onus of proof as to solvency, but in my view has failed to provide the "fullest and best" evidence of its financial position. (iii) The application for winding up was made on 15 March 2007, over six months ago. It is conceded that there are other further supporting creditors. [APM] will be able to use the funds that it is capable of raising and which it is anticipated of receiving in the near future with which to pay these debts. All the evidence relied upon by APM over recent months simply raised possibilities which have not eventuated. (iv) APM has been involved in disputes and legal proceedings with a number of people in addition to the Supreme Court proceedings mentioned above. The proceedings instituted already do not appear to be capable of resolution in the short term. (v) APM's books and records are incomplete and unsubstantiated. There have been a number of suggestions by APM since this matter was first heard to the effect that the new director Mr Fisher would take steps to put the books of accounts in order --- these suggestions have not been fulfilled and even Mr Miller in his report of 30 August 2007 necessarily relied upon incomplete and unsubstantiated records. (vi) No director can make a declaration of solvency. The then current directors of APM on 9 June 2006 resolved that APM was solvent as at that date, but this is obviously not sufficient to persuade me that the company was solvent at the date of hearing of this application. (vii) No cash flow statement or projections have been provided by APM despite ample opportunity to do so in these proceedings. 31 It was complained that the company has been placed in a position of lack of funds because of the actions of various investors and beneficiaries. It was claimed that there has been a concerted effort by some parties to bring about or contribute to the winding up of APM. In my view, none of these matters needs further enquiry. The question I need to determine is whether APM has shown the Court that it is solvent. The reason for its current position is not directly relevant to that enquiry, other than to show that the reason for its current position could be overcome in the short or reasonably short term so that creditors could be paid. However, as I have said, it has not been demonstrated that the company will be in a position to pay its debts in the foreseeable future. It was also claimed that court orders made in other proceedings would prevent the payment of creditors. I should indicate that any court order which may be seen by APM as preventing it from paying out monies could always have been varied or vacated upon the appropriate application, and I do not see that contention as one which would justify the conclusion that the reason for the non-payment of creditors is the existence of any court order. 32 APM wishes to dispute the claims of some of the supporting creditors, and to dispute the debts that are not bona fide. There were a number of supporting creditors that sought to place material before this Court. In the end, I have not needed to rely upon any material placed before the Court on their behalf, nor have I relied upon any affidavits of Walter Percival Edwards. The affidavit material of Mr Edwards was objected to by APM, and in my view was not relevant to the question for my consideration. The affidavit material of the supporting creditors takes the matter no further in light of my above reasoning, and it is unnecessary for me to determine any questions going to the validity of the supporting creditors' claims further to the position accepted by Mr Miller in his report of 30 August 2007. I rest my conclusion upon the basis of Mr Miller's report and the other matters set out above as indicating that APM has not discharged the burden of proof upon it. 33 APM also contended that APM's financial position must be considered from its position as a "trustee company", APM having a right of indemnity that was equal to the value of the benefits that it provided to the trust estate and that was equivalent to the value of any liabilities that it has incurred, whilst acting as trustee of the trust. It was further contended that the indemnity ranked as a first charge upon the assets of the trust and, if the Court were not satisfied of the solvency of APM, that it should exercise its power to accede to the request of APM to be removed from the office of trustee (a request made during the course of the hearing) upon certain undertakings being made as to certain funds. In effect, APM wanted a receiver to take the place as trustee upon APM's removal as trustee. In addition, APM submitted in reliance upon comments of Young J in Horwath Corporate Pty Ltd v Huie (1999) 32 ACSR 413 (at 416) that the courts have traditionally have been reluctant to wind up a trustee company as difficult questions of rights and entitlements are involved that would need to be determined by litigation, and there would be no useful purpose in winding up the trustee upon its removal from the office of trustee. 34 APM then submitted, in reliance upon the principles enunciated in Ron Kingham Real Estate Pty Ltd v Edgar [1999] 2 Qd R 439 at 443 per McPherson JA, that there would be no benefit to the creditors in the trustee company being wound up, and it was trite law that a creditor can claim to be subrogated to the right of indemnity of the trustee company and directly enforce the debt against the trust assets or even the beneficiaries personally. 35 The way in which these submissions were put seemed to relate both to the question of solvency and the discretion to be exercised by the Court as to whether to order a winding up, assuming I was not satisfied as to solvency. As a matter of procedure, APM moved the Court for its removal as trustee, the appointment of a receiver, and that a winding up not be ordered by the Court. 36 I do not consider that the contentions of APM should be accepted. At the outset, I do not accept that the principles applied by Young J in Horwath 32 ACSR 413, which was a case concerning a trust and not a corporation, apply to APM, as was contended by APM. APM cannot be treated as a "trustee company" simply because it holds assets on trust for certain beneficiaries. In any event, unlike that before Young J, this is a case where it is necessary for a skilled insolvency practitioner to go through the books and records, having regard to their current state as accepted by Mr Miller and APM itself. Further, the liquidator once appointed will be in a good position to deal with competing claims, which may involve no litigation at all. 37 The simple answer to the other contentions of APM is that in this case, accepting a right of indemnity exists, it is a right which has not been shown will result in the foreseeable future in the availability of funds to pay creditors. This is a case where there will be issues to be determined as to whether a right of indemnity can be exercised, assuming it exists in theory, because of the actions of APM. There is the question of whether the trustee (APM) has properly incurred liabilities in acting as trustee: only if it has done so will it be entitled to be indemnified out of the trust assets. 38 As to APM's reliance on Ron Kingham Real Estate 2 Qd R 439, in that case the question of whether the trustee had properly incurred liabilities was not a matter that was or could be in contention. The defendants could not, having authorised the action of the trustee, have complained of a breach of trust. 39 Putting aside the correctness of the decision in Ron Kingham Real Estate 2 Qd R 439 in allowing the trustee's creditor to sue trust beneficiaries directly to enforce the trustee's right of indemnity against the beneficiaries, I do not consider it appropriate where there is an issue or potential issue as to whether the right of indemnity is available in the circumstances of this case to conclude that the creditors should be left to pursue such claims individually. In any event, there is no evidence that there will be sufficient assets to pay the creditors after the secured creditors have been paid. I do not consider that APM's contentions relating to the right of indemnity demonstrate that APM is solvent, assuming that at law there is a right of indemnity in favour of APM, or that such right of indemnity is a factor in favour of exercising my discretion not to wind up the company. If a liquidator is appointed he will be well placed to consider and deal with the question of the right of indemnity, and pursue with priority claims over the beneficiaries. 40 I now turn to other discretionary matters raised by APM and the issue of APM continuing as a trustee and the appointment of a receiver. 41 As I have indicated above, it was contended that if I came to the conclusion that APM had not discharged the burden of proof to show it was solvent, I should not order the winding up of the company but should instead remove it as trustee and appoint a receiver over the trust assets. In support of this approach, evidence was led of a number of creditors who expressed a desire for such a course. It was argued that it would save time and costs if the appropriate person, already familiar with the company, was appointed (in this case Mr Andrew Leonard Dunner). It was further contended that with the number of actions threatened against the company a receiver would be in a better position to defend the company with the aid of the current director, that the principal director (Mr Edwards) who was responsible for the bad state of the books of accounts of the company is no longer involved with APM, and that the current director is taking steps to put the books of accounts in proper order and prepare proper financial statements. 42 In addition, it was argued that because of the operation clause 11 in the Memorandum of Agreement between APM and the developer, Rocco Antonio Calderone, dated 3 August 2005, in the event of the appointment of a liquidator, APM would not be able to rely upon its right of indemnity, as the developer would be released from its duties and obligations under the agreement, and the trust properties would vest in the hands of the beneficiaries. 43 I have come to the view that I should order the winding up of APM despite these contentions. (ii) Whilst the appointment of a receiver familiar with the company already may save some time and costs, this is not the important consideration when balanced against the important public interest of ensuring an insolvent company ceases trading even if only a presumed insolvent company. (iii) Clause 11 does not, in my view, release the developer from any past responsibilities or liabilities it may have had under the agreement --- all it seems to do is to release, upon the appointment of a liquidator, the developer from any further duties and obligations under the agreement from the date of the appointment. In any event, even if clause 11 does have the result as contended for by APM, including the vesting of trust property in the beneficiary, the other factors I have relied upon in these reasons would indicate that it is appropriate for the company to be wind up, the public interest being a paramount consideration where APM is unable to prove its solvency and the books of accounts are incomplete and are unsubstantiated. Upon vesting of the trust property in the beneficiaries, the company will still have a beneficial interest with priority over the beneficiaries if, as trustee, it has a right of indemnity as submitted. If the debts have been incurred in the administration of the trust, the liquidator can call upon the right of indemnity. (iv) I do not consider that there are now better prospects for the creditors as a whole (including the unsecured creditors) if the company, with or without a receiver, were allowed to continue to trade on. The Deputy Registrar ordered that Mr McCann be appointed liquidator. Whilst I must approach the matter as a hearing de novo , the fact is that Mr McCann has done some introductory work as liquidator before the ordering of the stay of the winding up. APM submitted that Mr Dunner should be appointed liquidator as he has already some knowledge of the company, as he was appointed Receiver and Manager of M.K. River Pty Ltd (an associated company of APM), and there would be a saving of costs. Some creditors favoured the appointment of Mr Dunner and others were against it. The attitude of creditors is a factor to take into account, but is obviously not decisive. It was accepted by all parties that the same liquidator should be appointed over APM and any other associated companies that may have a provisional liquidator appointed in proceedings which were heard in conjunction with those proceedings. 45 Whilst Mr Dunner may have done some work concerning the financial affairs of APM to the extent they relate to M.K. River Pty Ltd, he has not been involved in investigating the affairs of APM, an important task ahead. Much further work will need to be done, substantially more than undertaken already, and the fact that Mr Dunner has been involved as a receiver and manager of a company associated with APM does not operate as an important factor in favour of his appointment. I do not consider, in any event, that the evidence shows in the scheme of things that Mr Dunner has done such extensive work that large costs will be wasted if he is not appointed liquidator. Mr McCann, whilst having only undertaken a little work, has at least commenced dealing with the affairs of APM itself. 46 Mr Dunner was appointed receiver to M.K. River Pty Ltd by Mr Fisher, now the sole director of APM. In view of the past history of APM and the state of its books of accounts, it is preferable to appoint a completely independent person as liquidator. It is not that the perception of independence is necessarily decisive (for in many cases administrators are appointed liquidators, notwithstanding that they were initially appointed by the directors of the company) but where APM has a history of not keeping proper books of account and where litigation is anticipated (which may involve Mr Fisher himself), then I consider it preferable not to appoint Mr Dunner. In view of these factors, I propose to appoint Mr McCann as liquidator. 47 In the event that I appointed a liquidator, it was submitted by the creditors that the liquidator be appointed as receiver of certain trust assets. In the appropriate case this could be ordered --- see ASIC v Eastlands Pty Ltd [2006] FCA 1702. 48 In my view, the appropriate approach is to appoint the liquidator who has power to administer any trust assets (at least at the early states) (see Crest Realty Pty Ltd (No 2) (in liquidation) (1977) 1 NSWLR 664 and Wells v Wily [2004] NSWSC 607) , and the liquidator can approach the Court if any problems arise. I would not think it desirable to separate the function of the liquidator and any receiver of the trust assets in this case, and these functions should (at least initially) be fulfilled by the same person. The liquidator may apply to the Court if his appointment needs to be extended to that of receiver of the trust assets or if he needs further assistance. Equally, if any conflict arises because of the appointment of Mr McCann to other companies associated to APM, he can apply to seek directions on how to deal with that conflict: see ASIC v Westpoint Corporation Pty Ltd (2006) 56 ACSR 646 at 652. 49 During the course of the hearing, a number of matters arose for decision, which I disposed of without providing reasons. I now provide the reasons for those decisions. • The firm of Saxbys Lawyers ('Saxbys') (which firm acted for supporting creditors) produce their entire files in relation to the proceeding, including all attendance notes, correspondence, court documents, and all trust ledgers, office ledgers, trust receipts and accounts and to produce their entire files in any other matter in which information pertaining to the proceeding has been obtained. • The firm of Saxbys be restrained from continuing to act in these proceedings. In relation to the exercise of my discretion, the submission was that a fraud had been practised on APM by its former directors actively trying to create a situation where the APM had difficulties paying its debts, and that this was a matter I should take into account in the exercise of my discretion as to whether to order a winding up. 52 These applications were made after I had reserved my judgment in the matter, and APM needed leave to re-open its case. I did grant APM leave to re-open its case on a limited basis, effectively to update the court as to the financial circumstances of APM, but no further leave was granted. I refused the application for the hearing to be aborted. I also heard the application against Saxbys, and dismissed that application. 53 In respect of the other matters which involved the introduction of evidence by APM, I refused those applications and withdrew the leave to issue the subpoenas, or alternatively set them aside. The withdrawal of leave was directed to the subpoenas not actually made returnable before the Court that day but for a future date, although I have no doubt the Court could set those aside in any event even though the return date had not been reached. 54 I deal first with the application to restrain Saxbys. This application was made pursuant to the inherent jurisdiction of the court to restrain legal practitioners from acting in a proceeding and to ensure the integrity of the judicial process. No other basis was contended for --- it was not argued that Saxbys had any confidential information pertaining to APM, only that Saxby's were in a position of potential conflict in relation to various parties before this Court, and because of this the Court should prevent their acting in the proceeding at all. 55 I accept that in the appropriate case a legal practitioner, even if merely in a potential conflict situation, may not appropriately act for a number of clients and the Court could intervene. However, in my view the intervention of the Court in this case was not required. The principles to apply are conveniently summarised below. In answering this question it must be borne in mind that this is an application for a permanent injunction: Yunghanns v Elfic Ltd (unreported, Supreme Court of Victoria, Gillard J, 3 July 1998). It must also be borne in mind that the Court's jurisdiction is an exceptional one; it is to be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the solicitor of its choice without due cause. It is separate from the jurisdiction involved in protection of confidential information and the enforcement of fiduciary duty. This is made clear, in particular, in the extract from the judgment of Whealy J just quoted. The concern is with the due and proper administration of justice in a proceeding before the court. The jurisdiction exists to ensure that the integrity of the proceeding is maintained. Identification of the means needed to maintain that integrity will, of course, depend on the nature of the proceeding and its likely course. 58 The court must be careful not to intervene unless it is absolutely required in the circumstances of the case. Here Saxbys had brought the potential conflict to the attention of their clients and requested they seek independent legal advice, and no client of Saxbys came to court complaining of the conduct of Saxbys. No improper conduct on Saxbys' part was evident, and no basis arose to retrain Saxbys. 59 The application was brought at a late stage in the proceedings, after I had reserved judgment. Even if I considered Saxbys had in some way acted improperly, in the exercise of my discretion, I would not at the stage the proceedings had reached have restrained Saxbys from future participation in the proceeding. The cost, inconvenience and practicalities of requiring lawyers to cease to act are a proper basis to refuse relief --- see Young J in Geelong School Supplies [2006] FCA 1404 at [32] and [51]. Subject to a limited re-opening being permitted to APM after I reserved my judgment, the hearing of the proceedings was otherwise at an end. 60 It was suggested that this Court would need to determine, after a proper hearing, Saxbys' conduct and the effect their conduct had on a fair trial of these proceedings. 61 No proper basis was established for such an enquiry. As I have said, Saxbys have brought the potential conflict to the attention of the relevant persons, and I do not assume that any of their alleged improper conduct has impacted upon a proper and fair trial in these proceedings. No particulars of such impact were provided to the Court even to give cause to make further enquiry. 62 By reason of the views I took on the application to restrain Saxbys, I refused leave to introduce further evidence going to that issue as sought to be introduced by APM, did not permit cross-examination of Mr Lilley on that issue, and withdrew leave to issue, or alternatively, set aside, the subpoenas said to be relevant to that issue. 63 Another issue that remains to provide reasons is the application to adduce evidence relevant to the "fraud" of the previous directors of APM. No explanation was given as to the failure to lead this evidence earlier. It may have been deliberate, or it may have been through inadvertence or ignorance. No explanation has been given as to the failure to cross-examine Mr Lilley on this issue, although he had provided affidavit material and was available for cross-examination if required. No particularisation was attempted as to the nature of the evidence sought to be adduced, other than through the generalised allegation of "fraud" brought at the late stage of the proceeding. The allegation, in any event, going to the reason for the APM's current position, could only impact upon the exercise of my discretion if I otherwise came to the view that APM had not discharged its onus of proof to demonstrate solvency. Even if there had been substance to the allegations, in view of the many factors in favour of the winding up of APM, the allegation itself would have not affected the exercise of my discretion in favour of ordering the winding up of APM. 64 As I indicated above, the enquiry I needed to undertake was in respect of the solvency of APM. The factors leading to its current position may be relevant if they could impact upon APM's ability to pay its creditors in the near or foreseeable near future. The "fraud" allegations would hardly impact upon that issue following upon the evidence that had been presented to me by APM, particularly through the report of Mr Miller of 30 August 2007. There is also the need for finality in litigation and the particular need for prompt resolution of winding up applications --- putting aside the public interest, there is, as this case shows, the possibility of the evidence becoming stale or out of date: see Expile Pty Ltd v Jabb's Excavations Pty Ltd (2002) 194 ALR 138 at [9]. 65 The above considerations were all matters I could take into account in considering whether it was in the interests of justice that the proceeding be re-opened: see Smith v New South Wales Bar Association (No 2) [1992] HCA 36 ; (1992) 176 CLR 256 at 266-267, per Brennan, Dawson, Toohey JJ and Gaudron JJ; Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478-479, per Clarke JA (with whom Mahoney and Meagher JJA agree); Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at 138-139, per Neaves, Bruchett and Ryan JJ; Nikoloski v Ridge Consolidated Pty Ltd (1994) 116 FLR 192, per Higgins J; Boucher v Australian Securities Commission (1996) 71 FCR 122 at 126 at 132, per Spender, Drummond and Merkel JJ; Hindmarsh Medical Clinic v Hindmarsh Family Practice Pty Ltd (1997) 38 IPR 616 at 631-632, per Mansfield J. 66 Whilst I was and am mindful of the importance of allowing a party the full opportunity to put its case, for the reasons set out above, I refused APM to re-open its case other than to update the Court on the financial position of the company. Therefore, I refused leave to introduce further evidence going to the "fraud" issue, did not permit cross-examination of Mr Lilley in this issue, and withdrew leave to issue, or alternatively, set aside the subpoenas said to be relevant to that issue. 67 Two other matters arose after I reserved my judgment upon which I have not already determined. First, there was an application by ASIC to re-open its case. Essentially ASIC sought to introduce new evidence which came into existence since reserving my judgment, which would have indicated that the value of certain assets was less than that relied upon by Mr Miller in his report, and that a liability was greater than indicated in the material relied upon by APM. The application was opposed by APM. 68 The application by ASIC to re-open should be refused. In light of my reasoning above, the evidence sought to be adduced has no material bearing on my conclusions. I appreciate that ASIC desired to keep the Court up to date on the financial position of the company, and in normal circumstances that material would be a basis for re-opening a case. However, in view of the approach I have taken to this proceeding, re-opening the case is unnecessary and would lead to further delay. 69 Secondly, APM sought an adjournment of the proceedings for a month, asking that I not make a decision in this matter pending the further hearing of the Supreme Court proceedings referred to above, so that the moneys in the Supreme Court could be paid into the Federal Court, and the creditors and certain other nominated creditors could be paid. Application was also made by APM under s 459R(2) of the Corporations Act to extend the time for one month in which to make a determination in this matter so as to accommodate the request for further time. For the reasons given above in connection with the Supreme Court proceedings, and on the grounds I have found that a winding up order is appropriate, I refuse those applications brought by APM. Application for review of the decision of Deputy Registrar Mussett made on 23 May 2007 be dismissed. The stay order granted in respect of the winding up be removed. Australvic Property Management Pty Ltd (ACN 113 858 021) be wound up in insolvency by the Court. 4. Michael Wesley McCann be appointed liquidator of Australvic Property Management Pty Ltd (ACN 113 858 021). 5. The notice of motion of Australvic Property Management Pty Ltd (ACN 113 858 021) dated 24 July 2007 be dismissed. 6. The notice of motion of Australvic Property Management Pty Ltd (ACN 113 858 021) dated 5 September 2007 be dismissed. 7. The notice of motion of the Australian Securities and Investments Commission dated 28 September 2007 be dismissed. 8. Each party, each supporting creditor, the Australian Securities and Investments Commission and Saxbys Lawyers file with the court and serve on each other by 5:00pm on 19 October 2007 written submissions as to costs (including any orders sought as to the security for the respondents/plaintiffs' costs provided to the Court pursuant to orders dated 29 May 2007 and 3 July 2007). 9. Leave be granted to the liquidator (if so advised) to file with the Court and serve on each party, each supporting creditor, the Australian Securities and Investments Commission and Saxbys Lawyers, any submissions as to costs on or before 5.00pm on 26 October 2007. | insolvency winding up failure to comply with statutory demands presumption of insolvency appointment of liquidator application to have lawyers restrained from acting principles to be applied application to have proceedings re-opened corporation |
The claims relate to the payment of commissions with respect to loans arranged for the respondent by the applicants as part of a mortgage broking business. 2 The matter came before me for a directions hearing on 9 September 2008. I made directions pursuant to which the parties would file and serve their remaining evidence, with a further directions hearing on 11 November 2008. The parties drew to my attention an outstanding issue raised by Sackville J (when he was the docket judge for the matter) about the possible transfer of the proceedings from this Court to the Federal Magistrates Court. The parties had filed written submissions setting out their position on the issue of transfer but an order had not yet been made. The parties consented to me reading those submissions and making an order in chambers about transfer having regard to their respective positions as identified in the submissions. For the reasons set out below I have decided to order that the proceedings be transferred to the Federal Magistrates Court. 3 Section 32AB of the Federal Court of Australia Act 1976 (Cth) provides for transfer of proceedings from this Court to the Federal Magistrates Court either on application by a party or on the Court's own initiative. Under s 32AB(6) the Court, in so doing, must have regard to a number of factors (being any relevant Rules of Court, whether proceedings in respect of an associated matter are pending in the Federal Magistrates Court, whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding, and the interests of the administration of justice). Under s 32AB(8A) the Federal Magistrates Court has jurisdiction in respect of the transferred matter being jurisdiction "not subject to limits set by another provision". 5 The parties' position is as follows: - (i) neither opposes an order for transfer of the proceedings, and (ii) they agree that the proceedings do not (or, at least, are unlikely to) involve any questions of general importance. The applicants did not know whether the proceedings are more likely to be heard and determined earlier and at less cost in the Federal Magistrates Court and note the present quantum of their claim in the sum of $350,000 plus any amount from their entitlements to trailing commissions. The respondent noted that proceedings are conducted less formally in the Federal Magistrates Court and referred to the decision in Kurniadi v Loh (2002) 193 ALR 253 ; [2002] FCA 1021 at [21] in which Carr J observed that appeals from the Federal Magistrates Court were not automatically allocated to a Full Court but might be dealt with by a single judge (a trend Carr J described in 2002 as one occurring with increased frequency). This capacity involved the potential for savings in judicial resources which Carr J considered a relevant aspect of the interests of the administration of justice. In this regard I note that s 25(1A) of the Federal Court of Australia Act provides that the appellate jurisdiction of the Court in relation to an appeal from a judgment, other than a migration judgment, of the Federal Magistrates Court is to be exercised by a Full Court unless the Chief Justice considers that it is appropriate for the appellate jurisdiction of the Court in relation to the appeal to be exercised by a single Judge. Section 24(1AAA) precludes any appeal to the Court from a judgment of the Court constituted by a single Judge exercising the appellate jurisdiction of the Court in relation to an appeal from the Federal Magistrates Court. 6 I consider that an order for transfer should be made. The parties neither consent to nor oppose an order for transfer. They acknowledge that there is no issue of general importance apparent from the pleadings. The resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding. I agree that it is not clear whether the matter will be heard more quickly and cheaply in the Federal Magistrates Court but there is certainly no basis to conclude that the order would result in a delayed or more expensive resolution of the dispute. The potential for resolution of an appeal by a single judge if appropriate, rather than a Full Court, is also relevant. 7 The proceedings are presently listed for mention before me on 11 November 2008. My Associate has contacted the Registry of the Federal Magistrates Court. The proceedings will be listed in that Court for mention at 9.30am on 11 November 2008 before Cameron FM. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | transfer of proceedings to federal magistrates court practice and procedure |
Although the Derby Street premises have a different address, they are apparently accessible by way of a stairwell from the O'Keefe's Lane premises. The sole shareholder and director of the Fourth Applicant is the Third Applicant, Mr Peter Chang. The present proceeding was commenced by way of an Application filed on 7 September 2009. On 29 September 2009 an Amended Application was filed. On 24 September 2009 the docket judge in the proceeding, Jacobson J, noted undertakings then given (in summary form) not to inspect any of the documents seized, and made further orders. Now before the Court is a contested hearing seeking both: It is considered that interlocutory relief should be granted as there is both a serious question to be tried and the prospect of irremediable prejudice to the Applicants should interlocutory relief be refused. The Applicants contend that for the purposes of the present interlocutory application there is a serious question to be tried in respect to both: the manner in which the warrants were issued pursuant to s 3E of the Crimes Act 1914 (Cth) ('the Crimes Act '), the contention being that the warrants were " bad on their face "; and/or the manner in which the warrants were executed and materials seized pursuant to ss 3F and 3L of the Crimes Act and moved to other premises pursuant to s 3K. A more wide-ranging challenge to the manner in which the warrants were issued pursuant to s 3E was reserved for resolution at a final hearing. What is of particular concern, at least at the interlocutory stage, is the prospect that in executing the warrants documents and things may have been seized in excess of the terms of the warrants. A further issue of concern is the ability of a person whose premises are being searched to be informed in a meaningful manner as to what may be searched and seized pursuant to a search warrant and his ability to confine those executing a warrant to the terms of their authority. Both sections are contained within Pt 1AA of the Crimes Act . That Part was incorporated into the Act by the Crimes (Search Warrants and Powers of Arrest) Amendment Act 1994 (Cth). Those amendments (in turn) had their origins in an interim report now known as the Gibbs Report (Attorney-General's Department, Review of Commonwealth Criminal Law, Fourth Interim Report: Offences Relating to the Administration of Justice, Offences Against the Government Involving Property or Money, Bribery and Corruption and Search Warrants (Attorney-General's Department, Canberra, 1990)). " That report and the pre-existing law form an essential part of the context relevant to the interpretation of Pt 1AA ": Harts Australia Ltd v Commissioner, Australian Federal Police (1997) 75 FCR 145 (' Harts Australia No 1 ') at 148 per Hill, Cooper and Whitlam JJ; Hart v Commissioner of Australian Federal Police [2002] FCAFC 392 (' Hart ') at [17] [2002] FCAFC 392 ; , 124 FCR 384 at 390 per French, Sackville and R D Nicholson JJ. Example: If a warrant is issued at 3 pm on a Monday, the expiry time specified must not be later than midnight on Monday in the following week. It will be further noted that s 3E(5)(a) and (c) require the " issuing officer ... to state in the warrant " both " the offence to which the warrant relates " and " the kinds of evidential material that are to be searched for under the warrant ". In addition to imposing a discipline upon those issuing a warrant to address attention to those matters, ss 3E(5)(a) and (c) also serve as a meaningful reminder to those executing a warrant as to the limitations placed upon their authority. Section 3E, it may be noted, is relevantly in much the same terms as the now repealed s 10 of the Crimes Act . At one time it had been suggested that a " warrant should state the description of the offence in question with a particularity sufficient to enable the person whose premises are being searched to know the exact object of the search ": Parker v Churchill [1986] FCA 88 ; (1986) 9 FCR 334 at 348 per Jackson J; Australian Broadcasting Corporation v Cloran (1984) 4 FCR 151 at 153 per Lockhart J. But there has since been a retreat from such an exacting standard. The " precision required ", it has since been suggested, " may vary with the nature of the offence, the other circumstances revealed, the particularity achieved in other respects, and what is disclosed by the warrant, read as a whole, and taking account of its recitals ": Beneficial Finance Corporation Ltd v Commissioner of Australian Federal Police [1991] FCA 92 ; (1991) 31 FCR 523 at 543 per Burchett J. The objective of the requirement, however, has remained constant. The " requirement to state the offence exists to set bounds to the area of search which the execution of the warrant would involve . ... What is significant ... is that the warrant disclose the nature of the offence in question so as to indicate the area of search ": Harts Australia No 1 (1997) 75 FCR at 152 per Hill, Cooper and Whitlam JJ. Whatever may now be the degree of precision or specificity with which an offence must be stated for the purposes of s 3E(5)(a) , a statement of an offence in terms which impose no practical constraint upon those executing a warrant, and which fails to provide real and meaningful perimeters as to the " area of search ", would be a statement that fails to comply with s 3E(5)(a). For present purposes, however, it is sufficient to consider the terms of s 3E and the terms of the warrants issued thereunder. When considering the ambit of a power to search and seize under a statutory warrant, it is to be recalled that the extent of that power " is that conferred by the statute, no more and no less ": Challenge Plastics Pty Ltd v Collector of Customs [1993] FCA 247 ; (1993) 42 FCR 397 at 408 to 409. Each of the requirements imposed by s 3E(5) and the other provisions in Pt 1AA , it is considered, must be construed according to the terms used and in a context where the purpose of search and seizure provisions is to provide for the gathering of information to determine whether offences have been committed and to facilitate proof of them: Hart [2002] FCAFC 392 at [65] , 124 FCR at 399 to 400 per French, Sackville and R D Nicholson JJ. It was helpfully accepted by Senior Counsel on behalf of the Respondents that the serious questions in respect to whether each of the warrants had been issued in excess of the power conferred by s 3E and whether the authority conferred by each warrant had been exceeded could be tested by reference to the warrant in respect to the O'Keefe's Lane premises. That warrant purported to authorise the search and seizure of things that satisfied all of three conditions, namely: First Condition --- being " [t]hings which are originals or copies of any one or more of the following, including any of them which are stored on a computer, or on a computer storage device, or on any other type of storage medium or storage device ". The " following " description of things identified 35 " things "; Second Condition --- the prefatory terms of which stated: " [a]nd which relate to any one or more of the following ". There thereafter followed 144 entities and premises; and Third Condition --- the prefatory terms of which stated: " [a]nd as to which there are reasonable grounds for suspecting that they will afford evidence as to the commission of the following indictable offence(s) against the laws of the Commonwealth ". Seven offences were thereafter identified. Whether the mathematics of this calculation is correct may be left to one side. One any view of it, there is a large number of " permutations ". The warrants were detailed documents, the conditions extending to nine pages and the warrant in its entirety being some 16 pages in length. The warrants bore on their face a notation that they could be executed between 6.00 am and 9.00 pm and were expressed to expire " midnight at the end of the seventh day after the day on which the warrant is issued ". The ultimate submission on behalf of the Applicants was that " [t]he issuing officer could not have had the necessary reasonable satisfaction in respect of each permutation ". If this submission is accepted, it affects each of the warrants issued and each of the premises searched. It would be unnecessary, if this submission were accepted, to go on to consider any question as to the manner in which each of the warrants was executed or the relevance of the fact that most of the evidence focussed upon the search of the premises at O'Keefe's Lane rather than the other premises. Notwithstanding the attraction of resolving the present application in that manner, it is considered preferable to leave this submission presently unresolved. Given the conclusions reached in respect to the alternative manner in which the Applicants seek to advance their claim to interlocutory relief, it is unnecessary to resolve the submission. This person is entitled to be present during a search: s 3P. Section 3L addresses those circumstances which may arise where there is " electronic equipment " at the premises being searched. Note: An executing officer can obtain an order requiring a person with knowledge of a computer or computer system to provide assistance: see section 3LA. It should finally be noted that s 3K provides that " [a] thing ... may be moved to another place " in the circumstances there mentioned. ... [T]he section involves a distinction between moving things from the warrant premises to another place for examination, on the one hand, and seizure of those things, on the other. Section 3K does not specify any time period for the completion of the examination. However, it is ancillary to s 3F. It confers no free standing power of seizure. The purpose of the examination or processing which it authorises under s 3K(2) is to determine whether the things which have been moved from the premises "may be seized under the warrant". The power to seize still derives from s 3F. It therefore exists only in relation to a "warrant that is in force". The warrant remains in force only for the period specified in it (s 3E(5)). If seizure has not been made of things moved under s 3K within the period stated in the warrant, then the power to seize lapses. If examination has not been completed the power to examine also lapses. Absent any other lawful basis for retaining the things moved, they must be returned. It is a fundamental difficulty in the path of this approach to the construction of s 3K(2) that the language of the subsection is quite specific. It provides that, in certain circumstances, "the things may be moved to another place". The provision only authorises the moving of a thing to another place for the purpose described. The fact that the legislation, by virtue of the definition of "evidential material", contemplates that material in electronic form, may be "seized" (without identifying the manner by which it may be seized) does not demonstrate that material in electronic form can be "moved" in accordance with s 3K(2) of the Crimes Act . One purpose achieved by provisions such as ss 3H and 3P is to ensure that the occupier or other person is fully informed as to the extent of the authority conferred by a warrant. He is thereby placed in a position whereby he can observe that the terms of a warrant are not being exceeded. The statement in the warrant of those matters required by s 3E(5)(a) and (c), and the requirement that a copy of the warrant be made available, ensure that the occupier or other person is not reduced to a mere bystander. Just as the issue of a warrant may be challenged in an appropriate Court upon the basis (for example) that the issuing officer erred when reaching the state of " satisfaction " required by s 3E(1) , the manner in which a warrant is executed may also be challenged upon the basis (for example) that there did not exist " reasonable grounds " for seizing materials as required by s 3F(1)(d). Section 3L imposes its own further constraints upon the power that may be exercised, including the limitations in s 3L(3) , the requirement for notice in s 3L(5) and the limitation as to the period of time that " equipment " may be " secured " in s 3L(6). Each of the limitations upon the power conferred by these provisions only assumes additional importance when it is recalled that a search warrant may be issued and executed in respect to premises occupied by persons other than those involved or suspected of being involved in criminal activity. Where the terms of s 3E are satisfied, a warrant may thus be issued in respect to premises occupied by persons unconnected with any crime. The fundamental interference with privacy which is authorised by a search warrant must be constantly borne in mind. Search warrants are " ... intrusions into the sanctity of a person's domain and concomitantly an interference with his privacy ... ": Different Solutions Pty Ltd v Australian Federal Police (No 2) [2008] FCA 1686 at [106] per Graham J (applying: Cloran (1984) 4 FCR at 154 per Lockhart J). It necessarily involves an interference with the rights of an individual and affects his liberty. Although effect must be given to the terms employed in s 3E , it is also legitimate to bear in mind that the common law has long been " jealous of the prima facie immunity from seizure of papers and possessions ": George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 110 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. That would be both unnecessary and undesirable. What should be done must vary according to the circumstances of each case. But I shall endeavour to give some general guidance. It must not be used for some ulterior purpose. If, for example, it is used to punish the person whose premises are to be entered and searched, plainly that is an ulterior purpose. I shall return to this later. The same principles, it is considered, are equally applicable to a warrant issued under s 3E and executed under s 3F. For the purposes of the present interlocutory application, it is unnecessary to do more than refer to the breadth of the authority conferred by s 3F and to the constraints imposed upon that authority. The authority conferred is that conferred upon the " executing officer or a constable assisting ". It is not an authority to seize only that which a Court subsequently concludes falls within the terms of the warrant. No authority has been conferred by the legislature or by the warrants to enter a person's premises and to seize at random documents or things which may be believed to be of interest. There must always remain " reasonable grounds " for the belief set forth in s 3F(1)(d). Authority to seize things other than those described in the warrant (cf Chic Fashions (West Wales) Ltd v Jones [1968] 2 QB 299 at 313) is now expressly addressed in s 3F(1)(d)(ii). But that authority also remains confined by the requirement that there be " reasonable grounds " for the belief that is formed and by the requirement that the thing seized be " in relation to another offence that is an indictable offence ". The notion of reasonable grounds for a suspicion imports an objective test, but "reasonable" involves a value or normative judgment ( Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 at 167), and there may well be legitimate differences of opinion as to what falls within the term, particularly when it is used in relation to a nebulous expression such as "suspicion". A court is not entitled to substitute its own opinion on that question for the opinion of the executing officer or constable assisting. It was perhaps in recognition of the complexity presented by the warrants that a briefing session was held prior to 15 April 2009 with a view to better informing those persons who would be involved in the events of the following day in executing the warrants issued. On 14 April 2009 Mr Alan Crowe thus conducted a detailed briefing for those who would be responsible for executing the warrants that had been issued. Mr Crowe is a Senior Investigator in what is described as " the Serious Non Compliance ... business line of the Australian Taxation Office ... ". He is the Eighth Respondent. I presented the Operational Order at a briefing to the ATO team leaders, investigators and forensic officers who would attend the warrant action, as well as F/A Johnstone. In addition to the Operational Order, at the briefing, to the best of my recollection I also discussed the period of the alleged fraud and the types of material that would be relevant to the investigation. The terms and conditions of the warrants were also discussed at the briefing. After the briefing, I observed the ATO team leaders met with and addressed their search teams. The ATO officers designated as searchers were instructed, as per the AFP assignment sheet and the Operational Order, to act as searchers. Other ATO officers were designated as searchers/advisors, in that, because of their knowledge of the investigation, they could be called upon to advise other searchers during the warrants. These searchers/advisors work with me and have a good knowledge of the investigation as they are personally involved in the investigation. The remaining ATO officers, to the best of my knowledge were mostly experienced investigators who had been engaged in the execution of warrants for similar matters in the past. Mr Crowe suspected that the amount of money which had been defrauded by the Applicants was approximately $75 million. Another estimate put the figure at $76 million. The suspicion was that suppliers had grossly inflated invoices provided to a property developer for the supply of goods and services or, alternatively, did not in fact supply any goods or services. The suspicion was that the developer had then claimed GST input tax credits in relation to the falsified supplies through the preparation and submission to the Australian Taxation Office of Business Activity Statements. There were over 100 companies suspected of being involved and, of these, it was suspected that almost 40 were involved in the alleged offences. The detailed steps being taken prior to the execution of the warrants to fully inform those who would be responsible for making decisions the following day to search and to seize were to be expected and, perhaps, inevitable. The matters discussed at that briefing were all relevant to the responsibilities to be discharged and the many individual decisions that would have to be made before each and every document or thing was searched or seized. Whatever other information was conveyed to those attending the briefing, it is to be expected that the terms and conditions of the warrant assumed appropriate prominence. When Mr Crowe states that " [t]he terms and conditions of the warrants were also discussed ... ", it has presently been assumed that the central importance of those warrants was appropriately communicated to those attending. The warrants, after all, made lawful that which would otherwise have been unlawful. That assumption, however, may not be well-founded. The Director of the Serious Non Compliance business line (Mr Paul Anderson), being the person whom Mr Crowe approached on 9 April 2009 with a view to obtaining approval to have warrants issued, attended the briefing presented by Mr Crowe on 14 April 2009. Mr Anderson is the Ninth Respondent. Federal Agent Needham of the Australian Federal Police put the matter no higher in his Affidavit than saying that, in executing the warrants at what he described as the " Kogarah Premises ", he " observed that ... the officers had with them a piece of paper with what looked to be a list of the warrant conditions. I observed them referring to the piece of paper when searching and locating items of evidential material ". Present concern arises on two fronts --- one being whether the detailed briefing that was undertaken on 14 April 2009 became a substitute for a detailed consideration of the limitations imposed by the terms of the warrants issued; and, secondly, the utility of such a detailed warrant being presented to the person whose premises were being searched. Complexity in an investigation can be no reason for not seeking a warrant in detailed terms in order to search and seize materials of relevance to alleged serious wrongdoing. Complexity may be inevitable. The more complex a fraud that is suspected of having been perpetrated, the more complex a warrant may necessarily have to be. Complexity in alleged wrongdoing cannot be a reason to confine those seeking the issue of a warrant to a less extensive warrant than may be appropriate to secure documents or other things of relevance to an investigation. But obtaining a detailed warrant has the potential to reduce a person whose premises are being searched to a mere bystander little informed by the terms of a warrant as to that which may be searched or seized. In the present proceeding, however, it should (perhaps) be noted that considerable detail as to the concerns of the Australian Taxation Office had been communicated to the Applicants well prior to the execution of the warrant in April 2009. Reference was thus made by Senior Counsel on behalf of the Respondents to a document dated 4 June 2008 recording the results of a completed audit. The detail contained in that explanation, not surprisingly, overlaps to some extent with the conditions imposed in each of the warrants. What may appear to the uninformed as an impenetrable mass of detailed conditions may well have been readily understandable to the Applicants on 15 April 2009. It is unnecessary to resolve whether or not the representatives of the occupiers of each of the premises being searched on 15 April 2009 knew the subject matter of the search that was authorised and the extent of the authority conferred by each of the warrants. Neither of these two concerns need be further addressed. There is sufficient detail provided in the evidence now available to the Court as to the manner in which the warrants were executed on 15 April 2009 to give rise to a serious question to be tried. THE WARRANTS AS EXECUTED --- A SERIOUS QUESTION TO BE TRIED? His car was also searched. That search commenced at 6.00 am or 7.00 am on that day. The next warrant executed was that in respect to the premises at O'Keefe's Lane. The execution of that warrant commenced at about 9.00 or 9.30 am. The execution of the warrant in respect to the Derby Street premises commenced at approximately 2.00 pm. An Affidavit filed in support of the application for interlocutory relief by a solicitor acting for the Applicants who attended at the premises being searched (Mr Caplice) set forth the process followed during the course of 15 April 2009 in respect to the execution of the warrant at the O'Keefe's Lane premises. Prior to his attendance at those premises, Mr Caplice had a telephone conversation with the Eighth Respondent, Mr Alan Crowe. Mr Caplice requested an opportunity to " review any materials seized under the search warrants so that they can assert any claims they may have for legal professional privilege ". A request that " the search be suspended for a short period of time so that we can properly advise our clients and get instructions " was denied. A search undertaken with a view to precluding meaningful access to legal advice and the opportunity to claim legal professional privilege may render unlawful a search undertaken: Citibank Ltd v Commissioner of Taxation (1988) 83 ALR 144 ; Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403. But such is not the present case. Upon arrival there was a further conversation with Federal Agent Joanne Piggott and Federal Agent Luke Needham. They are the Third and Fourth Respondents respectively. Federal Agent Piggott was apparently " the AFP officer responsible for executing the search warrant " at the O'Keefe's Lane premises. Other parties to that conversation were two other solicitors acting for the Applicants, Mr Keith Swan and Mr Tim Dalton. At least two concerns were raised by Mr Caplice during the course of that discussion --- one focussed upon how the warrant was to be executed in respect to the computers on site; the second was in respect to possible claims for legal professional privilege. Arrangements were made so that claims for privilege could be made. In respect to the search of computers, the manner in which the warrant was being executed is potentially more troubling. Part of the discussion is set forth by Mr Caplice in his Affidavit as follows: TD "How is the ATO going to determine whether the computer and other electronic material contains information which is caught by the search warrant? " AC "You will see that the second condition of the search warrant for these premises contains a list of companies, individuals and addresses. The ATO computer forensic teams will log on to each computer and each hard drive in the premises and conduct a search using all of the companies, names and other entries in the second condition as 'key words'. If any of the 'key words' are found on the computer or hard drive, then an image of the hard drive will be taken. " MC "Am I correct in understanding that as soon as any one of the 'key word' terms in the second condition are found on a hard drive, the whole of the hard drives are imaged? " AC "Yes. " LN "The ATO are fully entitled to do that in accordance with the terms of the search warrant and the Crimes Act . " TD "That gives the ATO a very big net. We will want to get instructions on that. The concern is whether or not those executing the warrant were directing their attention to and forming the requisite belief as to whether or not that which was being seized was " evidential material in relation to [the] offence to which the warrant " related. A search simply by reference to " key words " may simply identify a pool of information to be searched, but it may fall short of providing " reasonable grounds " for believing that that which is searched may constitute " evidential material ". An initial search by reference to " key words " may be a useful starting point; indeed, there may in some circumstances be little choice but to start a search in such a manner. And such a search may be sufficient to identify documents falling within the second condition of the warrant --- but it may say little as to whether the third condition is satisfied. It is, however, unnecessary to pursue this issue further. Although considerable reservation is expressed as to whether a search for " key words " is sufficient in itself to thereafter authorise the " imaging " of " the whole of the hard drive ", it is enough for the purposes of an interlocutory hearing to conclude that there is a serious question to be tried as to whether such a course was authorised either by the terms of the warrant or ss 3F or 3L . A further concern in respect to the manner in which the warrant was being executed at the O'Keefe's Lane premises emerges from a separate Affidavit filed on behalf of the Applicants. We agree to provide your lawyers with copies of the images once they have been imaged and we will also return the computers to you at that time. Accepted literally, it is also the expression of an intent to " take all of the servers " irrespective of whether or not there has been any attempt at " operating " the equipment as required by s 3L(2) with a view to determining what may be found upon the " hard drives ". Again, at a final hearing that part of the conversation deposed to by Mr Mazzoni may be put in a broader context. And s 3L(1A) may not clothe the Respondents with sufficient authority to copy the data on the disks in the manner in which they did. Irrespective of whether " data " is to be construed in the manner as concluded by Branson J in Kennedy v Baker [2004] FCA 562 at [60] , 135 FCR 530 at 537 to 538, the issue which gives rise to the serious question to be tried remains a question as to whether the manner of execution of the warrants was such as to provide " reasonable grounds " for the belief referred to in s 3L(1A). Nor is it considered that s 3K necessarily provides the authority to remove " the servers and some of the hard drives ". Such evidence as there presently is available provides little basis for any conclusion to be reached that it was " significantly more practicable " to move equipment for the purposes of s 3K(2)(a)(i). Forensic experts were assisting in the search. And, even if s 3K(2)(a)(i) was satisfied, there remains concern as to whether s 3K(2)(a)(ii) had been satisfied. On either view, it is considered that at this stage a serious question arises in respect to whether the manner in which the warrant was executed on the O'Keefe's Lane premises in respect to the computers found on those premises has exceeded the authority conferred by the legislation and by the terms of the warrant as issued. A serious question of the same kind also arises in respect to the manner in which the warrant was being executed in respect to documents being searched and seized. Manpower on the part of those executing the warrant, it would appear, presented no difficulty. Mr Mazzoni observed " approximately 22 ATO officers searching through the offices located in the Kogarah business centre ". Many documents were seized and Mr Caplice stated that by 4.00 pm it had become apparent to him that " the ATO officers had seized a significant volume of documents and other materials " from the O'Keefe's Lane premises. His concern was that he would not be able to review the entirety of the documents prior to them being taken away. It was in that context that an agreement was reached that he would be allowed 60 days within which to conduct his review. By 5.30 pm Mr Caplice further states that he " observed that some of the ATO officers were working at a faster pace than when I had observed them earlier during the day ". " MC "How does the ATO know those documents are caught by the search warrants? " LN "What we propose is that your clients be given an opportunity to first determine the relevance of those seized documents to the search warrants as part of the 60 day review period we discussed earlier. " MC "I will have to get instructions in relation to this request. " LN "This will also be a matter which needs to be mentioned on the record when we adopt the completed property seizure records later. Rather than answering that question, the response was to extend an opportunity subsequent to the execution of the warrant " to determine the relevance of those seized documents to the search warrant ". But the responsibility, it is considered, is the other way around --- it was up to those executing the warrant to seize only that which was authorised by law. The " boxes " to which reference was made turned out to be 44 separate boxes containing documents. Mr Crowe's Affidavit annexed photographs of six of these 44 boxes. The photographs exposed on each box a completed document called an " Evidence Location Slip ". Each such " Slip " had room for there to be completed information as to the " Item No ", " Officer ", " Time Located ", " Date " and " Specific Location Found ". That information was to be completed by those officers seizing the boxes. Some, but not all, of the photographs also exposed a typed list as to the contents of what was said to be in the individual boxes --- for example " Financial Reports " and named companies. Such typed lists had been prepared by the Applicants presumably at some time prior to 15 April 2009. Some boxes, however, had no such indication as to their contents other than what appeared adjacent to " Specific Location Found ", as labelled by the Australian Federal Police or the Australian Taxation Office during the operation. Mr Mazzoni's Affidavit states that at approximately 4.00 pm on 15 April 2009 he saw two officers of the Australian Taxation Office reviewing lever-arch folders and overheard the following conversation: ATO officer 1 "What are we looking for in this room? " ATO officer 2 "Just open the folders and if anything in the folder relates to the search warrant grab the whole folder. At present, however, it permits a finding that those searching the premises were doing so not by reference to the conditions imposed by the warrant itself, but simply by reference to whether a folder " relates to the search warrant ". And, if it did, there was no further review to see whether anything within the folder may possibly have satisfied the conditions of the warrant. The mere relationship of " anything " in the folder to the warrant was considered to be sufficient authority to " grab the whole folder ". Upon the basis of this evidence, a serious question exists as to whether documents may have been seized without proper regard to the terms of the warrants themselves. It may be expected that such evidence as is presently before the Court may well be supplemented by further evidence provided on behalf of the Respondents at a final hearing. The events as they unfolded on 15 April 2009 may be better explained when further evidence is available. Even the evidence as presently filed on behalf of the Respondents exposes a series of checks and balances put in place during the course of the 15 April 2009 operation with an intent to ensure that documents and things were only seized in accordance with the terms of the warrants. Mr Crowe deposes that some officers of the Australian Taxation Office and officers of the Australian Federal Police were designated " to act as searchers "; other officers were designated to act as " searchers/advisors ". Those designated as " searchers/advisors " had " a good knowledge of the investigation as they are personally involved in the investigation ". But whether those checks and balances ensured compliance with the terms of the warrants may be further pursued at a final hearing. For the purposes of an interlocutory hearing it is inappropriate to express any more concluded view as to the manner in which the warrants were executed. It is sufficient to conclude that a serious question arises as to whether they have been executed in accordance with their terms. Also left unexplained by the Respondents was the need to complete the search and seizure of documents on 15 April 2009. The warrant in respect to the O'Keefe's Lane premises, and presumably the other warrants as well, were issued on 14 April 2009 and did not " expire " until 7 days thereafter. Admittedly the warrant only authorised access until 9.00 pm on each day of operation. But that time had been extended by agreement with the Applicants. In some circumstances it may be permissible to speculate as to the risk of documents being secluded in undisclosed locations if those executing the warrants were to leave premises unattended and resume a search on the following day or some other day. But there was no such evidence in the present case and no evidence as to any attempt being made to reach further agreement with the Applicants to secure the premises in a manner satisfactory to all of those involved with a view to resuming the search on 16 April 2009. It may presently be noted, however, that as the evidence stands at present an available inference is that those executing the warrants --- at least at the O'Keefe's Lane premises --- were, on one view of the evidence, seizing documents without proper or adequate regard to the constraints imposed by the warrant itself. In such circumstances, that inference and that alone may be sufficient to form a conclusion that the balance of convenience rests heavily in favour of the Applicants. If interlocutory relief were to be refused, any success that the Applicants may have at a final hearing would be largely rendered nugatory: cf Price v Elder [2000] FCA 166 per Emmett J. The rights of individuals are not to be whittled away by conferring greater power upon those executing warrants than the already extensive power they presently possess. Damages, in such a context, may not be an adequate remedy. Such factors, however, must necessarily be taken into account together with other considerations. Also to be taken into account is the effect that the seizure of documents is having upon the business of the Applicants. That effect is not insignificant. Some significance is also to be attached to the estimated cost of about $240,000 that would be incurred by the Applicants in further reviewing the materials seized. Whether the task is as complex as is asserted and whether the costs are as high as may presently be believed may be queried. And, whatever may be the extent of those costs and whatever may be the explanation as may finally emerge, the Applicants have made decisions since April 2009 to not challenge the validity of the warrants or the manner of their execution until now. To now raise the question of costs is a very much belated consideration that should be given less weight than had such matters been raised at the outset. But some additional costs will unquestionably be incurred and some weight can be given to that consideration when assessing the balance of convenience. These considerations, together with those also relevant to the granting of an extension of time pursuant to s 11(1)(c) of the Judicial Review Act , it is considered, weigh in favour of granting interlocutory relief. Although such evidence as is presently available focuses attention primarily upon the events as they unfolded at the O'Keefe's Lane premises, and not so much the other premises at which other warrants were also executed on 15 April 2009, such evidence as exists is not such as to warrant any different approach to the material seized at different locations. Persons executing warrants such as those presently in issue have to do so with a fully informed sense of the responsibilities imposed upon those authorised by law to access, perhaps forcibly, homes and premises. A search warrant remains a serious intrusion upon the rights of individuals. Such powers as are conferred may be exercised in accordance with the authority conferred --- but no more. The powers conferred are already extensive and intrusive. Although the manner in which the warrants were executed was directed to the events as they unfolded at the O'Keefe's Lane premises, there is no reason to believe that any different approach was adopted in respect to the execution of the warrants at the other premises. And, although it may be possible to isolate those documents seized from premises other than O'Keefe's Lane, or to isolate at least some of those documents seized at those premises after a particular point of time on 15 April 2009, it is not considered appropriate to now attempt to do so. Nor is it possible to do so now given the fact that there is no time recorded at which some documents or things were in fact seized. Such a task, however, may be appropriate when considering the form of any final relief. There is considered to be a sufficiently serious question that arises as to the manner in which the warrants were exercised as to warrant interlocutory relief extending to all of the documents and things seized at all of the premises. The Applicants accept, however, that a different conclusion should be reached in respect to a limited category of documents that have already been reviewed on behalf of the Applicants. To the extent that documents have been reviewed, the Applicants accept that the balance of convenience favours granting access to that material insofar as that material is not privileged. It is ss 5, 6 and 7 of that Act that confer jurisdiction upon this Court pursuant to the terms of that Act. If the jurisdiction of this Court which is sought to be invoked is to include that conferred by the Judicial Review Act , it may be that the Amended Application fails to comply with O 4 r 3(1)(b) of the Federal Court Rules : cf Kennedy [2004] FCA 562 at [5] , 135 FCR at 523 per Branson J. Whether any further amendment is sought to be made to the existing Amended Application , however, remains a matter for the Applicants to address and for the docket judge who has this proceeding assigned to him to resolve. Section 11(1)(c) assumes present relevance because the events now the subject of the present proceeding took place on 15 April 2009 and the initial Application was not lodged until 7 September 2009 --- a period some four months out of time. Reliance upon s 39B of the Judiciary Act 1903 (Cth) ('the Judiciary Act ') may not present such a problem for the Applicants --- but reliance upon s 39B could not permit review of the decision of the " issuing officer " to issue the warrants, that officer not being an " an officer ... of the Commonwealth ". If an extension of time were granted, the decisions to issue the warrants would also be susceptible to review pursuant to the Judicial Review Act . Decisions to issue warrants, it may be accepted, are decisions of an " administrative character " ( Harts Australia Ltd v Commissioner, Australian Federal Police [2001] FCA 175 at [26] , 65 ALD 463 at 470 per Drummond J) and decisions made " under an enactment " ( Kennedy [2004] FCA 562 at [7] , 135 FCR at 524 per Branson J). An extension of time pursuant to s 11(1)(c) is thus now sought. Indeed, if an extension of time is not granted, no interlocutory relief founded upon this Court having jurisdiction pursuant to the Judicial Review Act would be possible. Included amongst those matters relevant to the exercise of the discretion are " the merits of the substantial application " and prejudice to the respondent, although it is recognised that " the mere absence of prejudice is not enough to justify the grant of an extension ". It is considered that the merits of the case as sought to be advanced by the Applicants are such that an extension of time should be granted. The discretion to extend time in the present proceeding has been exercised by reference to the merits of the case together with those other matters referred to by Wilcox J. Two submissions advanced on behalf of the Respondents, however, warrant specific attention. First, Senior Counsel on behalf of the Respondents quite properly relied upon the public interest in permitting those responsible for enforcement of the criminal law to continue their investigations. This consideration was rightly advanced as of relevance to both the discretion to grant interlocutory relief and to the discretion to grant an extension of time pursuant to s 11(1)(c) of the Judicial Review Act . In Coward v Allen [1984] FCA 53 ; (1984) 52 ALR 320 Northrop J had concluded in respect to a warrant issued under the now-repealed s 10 of the Crimes Act that there was a serious question to be tried in relation " to the manner in which the warrants were executed and whether the seizure of things was valid ": (1984) 52 ALR at 336. His Honour nevertheless declined relief. The balance of convenience weighs in favour of the respondents. In the public interest, they should have a reasonable time to examine the things seized, to decide whether to prosecute or not, and to retain the things needed as evidence in support of any prosecutions. The other things should be returned to the applicants. The court hearing those criminal proceedings may have to determine, on the principles expressed in Bunning v Cross , whether evidence obtained by means of the search warrants is admissible or not. Any civil action arising from the seizure could be continued at the conclusion of those criminal proceedings. If no prosecutions are commenced, the applicants would be free to continue with their actions based on the unlawful execution of the warrants. In the meantime, the public interest requires that the respondents to the actions should be able to continue their investigations. Accordingly, the motions for interlocutory injunctions are refused. While the court would not wish to be seen to be rewarding members of the police who obtain possession of material without lawful authority, there is to be weighed against that a public interest in the administration of and non-interference with justice. Should the court order that material, albeit invalidly obtained, to be used in evidence in a pending prosecution be delivered up to those from whom it was taken the prosecution, which might otherwise succeed, could be frustrated. The existence of this discretion suggests to me that I should not interfere with the pending prosecution by requiring the documents seized to be returned but leave instead to the judicial officer presiding on that prosecution the question whether the material illegally obtained should be admitted into evidence in the prosecution. It is self-evidently in the public interest that those who commit criminal offences should be brought to account. Those who commit fraud, including a fraud upon the public revenue, should be brought to account. It is equally of importance that those investigating suspected criminal conduct be able to exercise all powers as are conferred upon them by the legislature to access materials and to secure the availability of all materials lawfully seized for the purposes of any subsequent proceeding. But it is not considered that either Northrop J or Hill J was attempting to do anything other than to recognise that aspect of the public interest and apply it to the facts before them. Albeit very conscious of the importance in " not interfer[ing] " with an investigation such as the present, it is not considered that that interest either alone or in combination with other considerations warrants the refusal of either an extension of time in which to commence the present proceeding or the refusal of interlocutory relief. There is one additional factor relevant to the extension of time, albeit not a factor conclusive as to the manner in which that discretion is to be exercised. In circumstances where it has been concluded that there is a serious question to be tried, a refusal of an extension of time necessarily has the consequence that an applicant is denied access to this Court to vindicate his rights pursuant to the Judicial Review Act . Such rights, it may be presently accepted, may be pursued, at least in part, by reliance upon s 39B of the Judiciary Act . Notwithstanding the importance of the public interest in the enforcement of the criminal law, there is also a very important public interest in people having access to this Court --- even in circumstances where an Application has not been filed within the time prescribed. The second matter raised by Senior Counsel on behalf of the Respondents which warrants specific attention is the failure on the part of the Applicants to raise at the outset any intention to challenge the validity of the warrants or the manner in which those warrants were executed. Senior Counsel on behalf of the Applicants frankly accepts that an intention to challenge the validity of the warrants was not raised prior to the commencement of the present proceeding in September 2009 but maintains that the manner in which the warrants were executed had been raised at a far earlier point of time. If the manner of execution of the warrants was raised, it was certainly not raised unambiguously with the Respondents. A review of the correspondence and other communications which passed between the legal representatives of the Applicants and the Respondents commencing on 15 April 2009 exposes detailed consideration being given to the means whereby the Applicants could access and review the materials seized. Notwithstanding the numerous exchanges of correspondence, there nowhere appears in that correspondence reservation on the part of the Applicants of any intention to challenge either the validity or manner of execution of the warrants. The Respondents were at no point of time unequivocally informed that the very basis upon which the documents or other things were seized may be put in issue. All that the Respondents were aware of was the commitment to putting in place a regime whereby access to the seized documents and things could be facilitated and quickly resolved. Had such reservations been expressed at the outset to those representing the Respondents, the Respondents would then have been put in a position where they could have formed a view as to whether the validity of the warrants or their manner of execution should be resolved at a far earlier point of time. To raise such matters some five months after the warrants were issued and executed has denied the Respondents that opportunity. Inferences are thus available that the Applicants by finally commencing their proceeding in this Court in September 2009 have either deliberately delayed seeking relief or are now doing so for the purpose of further delaying or frustrating the Respondents' access to the materials seized on 15 April 2009. Although such inferences would be relevant to the exercise of the discretion conferred by s 11(1)(c) (and the grant of interlocutory relief), the course which it is considered is more appropriate is to presently leave unresolved whether such inferences should be made. Even if inferences were drawn, they would not have led to an adverse exercise of the discretion to extend time or the grant of interlocutory relief. The Respondents suffer little additional prejudice by granting an extension of time or the grant of interlocutory relief. Such interlocutory relief as is now granted is for a limited period --- it is for a period slightly in excess of 2 months until the final hearing which is due to commence on 15 December 2009. When the final hearing is imminent, it would be a wrong exercise of the discretion to refuse the extension of time and to preclude the matter being fully resolved when all of the relevant facts can be fully explored. A final observation should be made in respect to s 16 of the Judicial Review Act and the express reference to it in the Amended Application . Section 16(1)(d) does not set the Court on an uncharted course without legal reference points by which to steer. That means justice according to law. It may be that a person who acquires information knowing that the information is imparted to him in breach of a statutory duty is in the same position as he would have been if the duty were an equitable obligation of confidence. Whatever further amendments to the existing Amended Application may be considered appropriate on the part of the Applicants should not stand in the way of the Applicants presently obtaining interlocutory relief. The jurisdiction of the Court was not put in issue, nor was its power to grant interlocutory relief if a proper basis emerged upon which it should do so. Such defects as may presently appear in the form of the Amended Application can readily be addressed, if necessary, by further amendment. For present purposes it is unnecessary to express any view as to the validity of the warrants as issued on 14 April 2009. Their validity has for present purposes been assumed. It is the manner in which those warrants were executed which gives rise to a serious question to be tried. Upon the Applicants giving the usual undertaking as to damages, the balance of convenience favours the grant of interlocutory relief. Costs, it is considered, should be reserved. Upon the Applicants giving the usual undertaking as to damages, the First and Second Respondents are prohibited, until further order, from: Liberty is reserved to the parties to apply to have Order 2 varied to the extent that it is necessary to accommodate any agreement as to the documents or things which may be accessed by the Respondents prior to the final hearing. Costs reserved. I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | need for warrant to state the offence to which it relates statement of the kinds of evidential material that are to be searched for belief on reasonable grounds when materials being seized documents seized in excess of terms of warrants decision to issue a search warrant a decision of an " administrative character " decision made " under an enactment " extension of time the issuing officer not an officer of the commonwealth unavailability of review under judiciary act search warrants administrative law |
His Honour, at a show cause hearing, dismissed the applicant's application for review of the decision of the Refugee Review Tribunal ('the Tribunal') to affirm a decision refusing him a Protection (Class XA) Visa ('a Protection Visa'). He lodged an application for a Protection Visa on 1 December 2005 with the Department of Immigration and Multicultural Affairs. 4 The application for a Protection Visa was refused by a delegate of the Minister on 20 December 2005. On 19 January 2006 the applicant applied to the Tribunal for review of that decision. The applicant claimed in his Protection Visa application and before the Tribunal that he had a well-founded fear of persecution from the authorities in China because he is a Christian. 5 In a decision handed down on 6 April 2006, the Tribunal affirmed the decision of the delegate of the Minister. The Tribunal is not satisfied that he ever left this church to become a member of an illegal house church. The Tribunal is not satisfied that the Applicant has ever suffered harm at the hands of the Chinese authorities for any reason or that there is a real chance that he will do so if he returns. The Tribunal is not satisfied that the Applicant has a well-founded fear of persecution for reason of his religion, his imputed political opinion or any other Convention reason should he return to China now or in the reasonably foreseeable future and is not satisfied that he is a refugee. The basis for the adverse credibility findings is comprehensively revealed in the Tribunal's reasons. In particular the Tribunal was concerned about the extent of the claimed involvement by the applicant with the Padstow Congregational Church. He said that as well as his real name he had also used the name Yao Ling at the church, which he claimed was because his own name was difficult for non-Chinese to pronounce. He said Yao Ling was the equivalent of 'Alan'. The Tribunal spoke by telephone to Chu Gou Fan, a preacher at Padstow Chinese Congregational Church and asked if he knew anyone by the two names used by the applicant. Chu said he did not recognise the names but there were normally many people in the church on Sundays and it was difficult to him to speak to everyone. He said many people from China asked for identification letters and the church had passed a resolution to the effect that such letters would only be issued where members had been regular attendees for six months and had taken part in small group activities. In the past there had been cases of individuals going to other churches as soon as letters were written for them. He said he recognised that this system could be a little unfair not [sic] to people who have started coming to the church and suggested that another option would be to find someone else in the church who knew the Applicant. Following the conclusion of the telephone call the Applicant offered a description of the facial features of Chu and another minister in the church. On 31 May 2006 Smith FM gave leave for the applicant to file an amended application and listed the matter for a show cause hearing under r 44.12 of the Federal Magistrates Court Rules 2001 (Cth) ('the Rules'). In a judgment delivered on 1 August 2006, his Honour concluded that he was not satisfied that the application had raised an arguable case for the relief claimed and dismissed the application under r 44.12(1)(a) of the Rules. As a result of the adverse finding, the Tribunal said it was not satisfied that the applicant had ever suffered any harm by reason of being a member of a house church in China, and rejected his claims of persecution and his claim that he had been accused of collusion in anti-Chinese propaganda while held in detention. The applicant asserts that his Honour erred in law; he erred in finding that the Tribunal acted properly in its findings. The Tribunal failed to comply with its obligations under s424A(1) of the Act. The Tribunal failed to comply with its obligations under s425 of the Act. The learned Federal Magistrate failed to consider a letter from Padstow Chinese Congregational Church as evidence that I am a genuine Christian. Therefore, it must be unfair if my appeal application has been dismissed. This is submitted that I may have to accept that the Refugee Review Tribunal ("the Tribunal") has made an adverse credibility finding against me. However, the Tribunal failed to provide me any chances; and therefore, I have to say that the Tribunal failed to give me an opportunity to comment on issues regarding to my credibility. However, in determining my application, the Tribunal has mainly relied on some of information obtained from the Tribunal's hearing. However, the Tribunal failed to indicate me clearly particulars of those pieces of information which have been used as the reason, or part of reason, in deciding my application; and the Tribunal, especially, failed to ensure me to understand that those pieces of information would be directly in relation to my review application; and he failed to invite me to comment on those pieces of information. The applicant submitted that the decision in his case should be based on accurate information and not on false information. Further, as his written submissions indicate, the applicant claims that he should have been told what issues from his hearing the Tribunal was considering to find adverse to him, and that he should have had a right to present arguments to the contrary of that foreshadowed decision. 13 The difficulty with the applicant's application for leave is that merits review is an impermissible basis for the relief which he sought. Put simply, it is not an error of law and, in particular, a jurisdictional error, for the Tribunal to make a wrong finding of fact. Further, while the Tribunal has to give reasons for its finding, there is no obligation in a Tribunal to give reasons for its reasons. 14 The reasons for the Tribunal's conclusions were based on its findings as to the believability of the applicant's claims. The Tribunal does not have to give reasons for its adverse credibility finding, although in this case it did. Even if, as the applicant asserts, the findings by the Tribunal are demonstrably wrong, that does not illustrate jurisdictional error. That is what the applicant essentially is seeking to demonstrate. 15 Finally, there is no obligation in the Tribunal to give advance notice of its proposed adverse findings. The Tribunal is obliged to hear the applicant and the case he wishes to present. Its obligations to inform the applicant concerning matters are exhaustively set out in s 424A of the Migration Act 1958 (Cth) ('the Act'). 16 There is no reason to doubt the correctness of the decision of Smith FM because there was no error in relation to the obligations imposed on the Tribunal by s 424A of the Act or the requirements of s 425 of the Act. 17 No basis has been shown why leave should be granted. 18 The application is dismissed with costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | application for leave to appeal status of findings of fact of the refugee review tribunal whether obligation on tribunal to give reasons for its reasons impermissible merits review no obligation in the tribunal to give advance notice of its proposed adverse findings migration |
The tender of pars 5.129-5.178 and section 6 of Mr Kinsella's report dated 2 December 2004 ('the Report') be rejected. The parties consider the application of this ruling to other parts of the Report and to Mr Kinsella's report in reply dated 25 July 2005 and his supplementary statement dated 5 October 2005, with a view to handing up agreed short minutes of order. He has prepared three reports: the first report, a report in reply (25 July 2005) and a 'supplementary statement' (5 October 2005). The first report comprises 143 pages (excluding appendices); the report in reply is 89 pages in length; and the supplementary statement adds a further 73 pages to the mountain of material tendered in this case. 3 It seems that neither money nor length of exposition is any object in these proceedings. Neither, however, necessarily produces optimum forensic outcomes. Judges have repeatedly warned about the potential waste of resources involved in the preparation of elaborate expert reports that may turn out to be of little or no assistance in resolving the issues before the court. These warnings appear not always to have been heeded in the present case. 4 News objects to the entirety of Mr Kinsella's report. However, its principal concern appears to be with Mr Kinsella's opinions relating to so-called 'marquee sports'. The value of such sports rights in building the network and a subscriber base goes beyond the directly attributable cash flows. ' (Emphasis added. He considers that the pursuit by the Seven Network of an IMS 'was a practical, proven and generally accepted option' (par 4.4(c)). The launch of a "stand-alone" retail pay television service would not have been feasible without such content' (par 4.4(e)). He describes Sky as the leading pay television company in the United Kingdom. 8 In 2000, Mr Kinsella joined The News Corporation Ltd ('TNCL'). Between February 2000 and March 2002, Mr Kinsella held the position of Senior Vice President, News Corporation Europe, for 'media, new media and telecommunications activities' in the United Kingdom and Western Europe. 9 Since March 2002, Mr Kinsella has provided independent strategic, financial and economic advice to various media clients. His activities do not appear to have included advice to Australian media companies. 10 Mr Kinsella's curriculum vitae suggests that he has only limited familiarity with the pay television industry in Australia. In 1994, he was seconded to TNCL to review and assist in the development of TNCL's financial and operating plans for its entry into the Australian pay television market. Mr Kinsella also developed plans for other interested parties, including the ABC. (Pay television commenced in Australia in 1995. ) In addition, from 1997 until 2001 Mr Kinsella was a non-executive director of NGC Network (Australia) Pty Ltd, the holding company for Sky News Australia. Mr Kinsella does not suggest that his role as a non-executive director of that company required him to become familiar with the Australian pay television industry as it operated at that time. Mr Kinsella refers to 'the genre specific formats adopted in Australia' (par 5.67). He states, on the basis of assumptions provided to him, that the cost of movies and sports rights to Australian pay television operators is demonstrated by the prices paid by Foxtel for Fox Sports and by Optus for C7 (par 5.72). As an illustration of the importance of loyalty to sporting teams, Mr Kinsella says that 'there is only one Collingwood Football Club [in the AFL] and only one Manchester United soccer team' (par 5.100). 13 Mr Kinsella also refers, in general terms, to the Australian anti-siphoning regime which he says attempts 'to ensure that certain events continue to be broadcast on free-to-air television' (par 5.114). Later, he records that from 2002 the free-to-air channels broadcast five AFL matches in each round, while pay television had the right to the three matches not selected by the free-to-air networks (pars 6.11, 6.81). He also says that pay television's ability to broadcast the AFL is adversely affected by the inclusion in the anti-siphoning list of all matches in the AFL Premiership competition and Finals Series (par 6.80). He expresses the view (at par 6.81) that the worth of the AFL matches, in terms of driving subscriptions, is apparent from the historic prices paid for the pay television rights (which prices have been made available to him by way of assumption). These include the absolute amounts paid in 2001 and 2003 for television sports rights in Australia (par 6.8). This information includes crowd attendances for various sporting fixtures, the proportion of the population attending such fixtures over a period of time and the proportion of the population which watches particular sports on television. Mr Kinsella concludes that this material corroborates the results of the price comparison in that cricket, the AFL, the NRL and rugby union are all potentially 'marquee' sports (par 6.54(a)). 17 Mr Kinsella then examines each potential marquee sport to determine its utility to television. The technique he adopts is to assess the extent to which each sport satisfies thirteen criteria or characteristics. He gives each sport a grade, represented by a pie or fraction of a pie, for each characteristic. The classification of a sport as a marquee sport depends on its success in accumulating high 'pie gradings'. If a sport has 'sufficiently robust and widespread' appeal it will 'lock in television as a source of revenue'. According to Mr Kinsella, this warrants a greater weighting than the other characteristics. (ii) Volume/quantity of live, high quality contests (par 11.3). (iii) Frequency/rhythm/routine. Mr Kinsella says that regularity of programming is an attribute (par 11.4). (iv) Guaranteed participation by a favoured team in the competition (par 11.5). (v) Cultural and social significance of a sport or event (par 11.6). (vi) Domestic venues/time zones, which help establish a domestic fan base (par 11.7). (vii) 'Appointments to view', meaning the ability to provide live coverage at predictable and regular times (par 11.8). (viii) No regional disparities in the appeal of a sport (par 11.9). (ix) Ethos/values for which a sport or event (such as the Olympics) stands (par 11.10). (x) Interactive benefits, such as betting opportunities (par 11.11). (xi) One stop shop/competitive balance, whereby a competition provides broadcasters with a volume of competitive contests (par 11.12). (xii) Local/tribal/heritage, being a measure of customer loyalty (par 11.13). (xiii) No anti-siphoning impact, being the ability of pay television to broadcast live events in the light of anti-siphoning regimes or other constraints (par 11.14). This is presumably because each accumulates 10.75 'pies', while international cricket can manage only 8.5 and international rugby union 7.5. International cricket scores more highly on 'fan equity', which, according to Mr Kinsella, is to receive an additional, but unquantified weighting. However the weighting is apparently insufficient to make up the difference in scores between international cricket and the two local football codes. He seems to formulate these criteria on the basis of his experience as an executive or consultant in the United Kingdom and, to some extent, in other European countries. (ii) He seeks to utilise these criteria for the purpose of assessing the importance to Australian pay television platforms of the broadcasting rights to the most popular Australian sports. In doing so, Mr Kinsella relies on a limited amount of information about the Australian television industry. That information, almost exclusively, has either been given to him by way of assumptions, or has been derived by him from published sources. (iii) He exercises a judgment, in the light of the information available to him, as to the extent each sport satisfies the thirteen criteria. Although this process seems to involve the exercise of subjective judgment, Mr Kinsella presents the results in a quantitative form as the marquee sports assessment matrix (presented in the collection of pie charts in Exhibit 6). (iv) On the basis of this apparently quantitative assessment, Mr Kinsella expresses the opinion that the only two truly 'marquee sports' in Australia are AFL and NRL. (v) This opinion underpins his conclusion that the 'impact of the loss of the AFL rights and the failure to obtain the NRL rights on the [IMS] was profound. It is not obvious, for example, why each of the thirteen criteria he identifies is to be given equal weight (other than the extra weighting to be accorded to 'fan equity / commercial appeal') for the purpose of evaluating the marquee quality of particular sports. This is despite the apparent overlap between some of the criteria, for example 'cultural and social factors' and 'ethos/values', or 'frequency/rhythm/routine' and 'appointment to view'. Similarly it is often unclear why Mr Kinsella allocates particular 'scores' for various sports, as recorded in Exhibit 6. Why does cricket score lower than AFL for interactive benefits? Why is cricket's value in terms of 'volume/quantity' one half that of the NRL? 23 It might be said that these matters can be explored in cross-examination. The difficulty, however, is that Mr Kinsella's report does not suggest that he has extensive experience in the Australian television industry or specialised knowledge about Australian pay television or the significance of sports rights to Australian pay television retailers. Indeed Seven's written submissions appear to concede that Mr Kinsella has little knowledge of the Australian pay television industry. 24 The assumption underlying his analysis seems to be that the thirteen criteria can be applied to the Australian pay television industry by a person with experience in or knowledge of pay television in another country. Seven appears to accept that this is so. Rather ... he has identified from his extensive knowledge of the pay TV industry factors relevant to the identification of subscription drivers and, in particular, "must have" or "marquee" sport for the purposes of pay TV and then applied those factors in section 6 to specific data and assumptions he has been given about Australian sports and has general knowledge of the value of sports rights derived from his training, study and experience'. 25 The apparent absence of substantial experience in or knowledge of Australian pay television is not a trivial matter. Mr Kinsella's analysis rests on fine judgments about the value of Australian sports rights to pay television retailers. Those judgments underpin the distinction he draws between the two essential subscription drivers, (the NRL and AFL broadcasting rights) and the other sports broadcasting rights. That distinction in turn underpins Mr Kinsella's assessment of the impact of Seven's loss of the AFL rights for the 2002---2006 seasons and its failure to acquire the NRL rights for the 2001 to 2006 seasons. 26 The difficulty with the assumption underlying Mr Kinsella's analysis can be illustrated by reference to the anti-siphoning regime in force in Australia. Mr Kinsella records accurately (so far as I can tell) the basic elements of the regime, which were provided to him as assumptions. He also refers to the regime when making his assessment of truly 'marquee' sports in Australia. He distinguishes, for example, between the effect of the anti-siphoning regime on broadcasting rights for international cricket and those for the AFL and the NRL. 27 I have, however, heard a great deal of evidence in this case about the way the Australian anti-siphoning regime has operated in practice in relation to sports broadcasting rights. In particular, I have heard much evidence about the factors that determine, within the framework of the statutory anti-siphoning regime, how matches are allocated between free-to-air television operators and pay television platforms. That evidence bears on the 'quality' of the AFL and NRL matches that, in practice, are likely to be available on pay television in Australia. It has been foreshadowed that I will receive a good deal more evidence about the acquisition by Seven and Network Ten Pty Ltd of the AFL television rights for 2007-2011 (including the pay television rights). 28 There is nothing to indicate that Mr Kinsella is versed in the detail and nuances of the practical operation of the anti-siphoning regime in Australia. It is difficult to follow how someone in that position can make an informed and accurate assessment as to whether sporting rights affected by the regime, in so far as they are available for pay television, can be said to be essential to the survival of a retail pay television operator. To put the matter another way, it is difficult to see what assistance Mr Kinsella's views can be in relation to sports broadcasting rights and their importance to the Australian pay television industry, when he appears not to have the expertise required to make a fully informed judgment. 29 That does not necessarily mean that Mr Kinsella's views are wrong. A number of lay witnesses were asked about the significance to pay television of the AFL and NRL broadcasting rights. The views expressed by some of them may not, in the end, be very different from those expressed by Mr Kinsella. There is certainly a substantial body of evidence to support the proposition that the AFL and NRL pay television rights have always been very important to pay television in Australia. The significant point for present purposes, however, is that Mr Kinsella has not been shown to have the experience or expertise required to evaluate the significance of the Australian anti-siphoning regime on the issues he addresses. The same difficulty applies to other aspects of his analysis. However, News' objection can be dealt with by concluding, as I do, that Mr Kinsella's reasoning process, as disclosed in his report, does not enable me to determine whether he has the necessary specialised knowledge, based on his training, study or experience, to express the opinions he has on those issues. This conclusion is sufficient to uphold the objection: HG v The Queen, at [39] per Gleeson CJ. 32 I therefore reject the tender of the parts of the report identified by Mr Whitford (see [6], above), other than appendix 3. Appendix 3 may be in a different category because, on one reading, it simply sets out criteria which in Mr Kinsella's opinion should be taken into account in assessing the significance of sports broadcasting rights for pay television in any country, including Australia. Whether that opinion is relevant or helpful may be a different question. 33 Mr Sheahan SC, who appeared with Mr Halley for Seven, put as a fallback position that the portions of Mr Kinsella's reports that are objected to should be treated as submissions. There also may be some other parts of Mr Kinsella's report that are not affected by my ruling. I therefore propose to give the parties an opportunity to consider these reasons before determining whether the whole or only parts of the report should be rejected. The parties should also consider the effect of the ruling in relation to Mr Kinsella's report in reply and supplementary statement. | admissibility of expert report whether expert has necessary specialised knowledge to assess the importance of australian sports broadcasting rights to australian pay television operators expert evidence |
The principal contractor on the site is Bovis Lend Lease Pty Ltd ("Bovis"). Bovis complains that work has been interrupted because elected officials and members of the Construction Forestry, Mining and Energy Union ("the CFMEU") have impeded access to the site by placing vehicles and other objects on the driveway leading to the entrance gate. As a result vehicular access to the site from the adjacent Flemington Road was restricted. On 19 February 2009 Bovis sought and obtained interlocutory orders from Marshall J so that vehicular and other traffic could move on and off the site. The [CFMEU] (whether by itself, their officers, servants, agents or howsoever otherwise) until the hearing and determination of this proceeding or further order, be restrained from doing any act or directing, advising or authorising, or doing or continuing any act to aid, abet, counsel, procure, encourage or induce any person to obstruct or interfere with the passage of any person, whether on foot or in a vehicle proceeding into or from the New Royal Children's Hospital situate at 52 Flemington Road, Parkville. The [CFMEU] forthwith remove any vehicles that are within its control including those vehicles with the registration numbers WML264, TWF017, TXG354, WML266, WOH295, UMO774 and TXL354 that interfere with or impede access to the New Royal Children's Hospital, situate at 52 Flemington Road, Parkville. Marshall J pronounced the orders at approximately 4.30 pm on 19 February 2009. Sealed copies of the orders were served on the CFMEU at about 5.30 pm on that day. At about the same time copies of the orders were served on certain CFMEU officials who were present at the entrance to the site. On 18 February 2009 Caelli Constructions (Vic) Pty Ltd ("Caelli"), one of Bovis' major sub-contractors, had applied to the Australian Industrial Relations Commission ("the Commission") for orders, under s 496(1) of the Workplace Relations Act 1996 ("the Act"), that the CFMEU stop and/or prevent the organisation of industrial action by its members engaged by Caelli to work on the site. The application came on for hearing before Watson SDP on 19 February 2009. Caelli and the CFMEU were both legally represented at the hearing. The application was, ultimately, unsuccessful for reasons which have no bearing on the present proceeding. The only present relevance of the proceeding is that, in the course of argument on 19 February 2009, counsel for the CFMEU made statements which Bovis contends make it clear that the CFMEU was aware of the orders made by Marshall J and was so aware no later than about 5.30 pm on that day. Bovis complains that his Honour's orders were not complied with and that officials and members of the CFMEU have continued to impede vehicular access to the site. This has been done by positioning vehicles on the driveway and by erecting gazebo tents in front of the entrance gate. By notices of motion dated 20 February 2009 and 24 February 2009 Bovis seeks orders that the CFMEU be adjudged guilty of contempt, that it be punished for that contempt and that it be ordered to pay the costs of the motions. Senior Counsel for the CFMEU objected that the ABC Commissioner did not have the right to intervene in the proceeding. When challenged, Mr Green advised the Court that the ABC Commissioner asserted a right of intervention under s 71 of the Building and Construction Industry Improvement Act 2005 (Cth) ("BCII Act"). The CFMEU submitted that the present proceeding, in which allegations of contempt of court were made, was a separate and distinct proceeding which was not comprehended by the terms of s 71 of the BCII Act. Reliance was placed on the decision of the Full Court in the National Union of Workers v Davids Distribution Pty Ltd [1999] FCA 1109 ; (1999) 91 FCR 513 where the Court (at 522) quoted with approval the statement of Lehane J, in Real Tech Systems Integration Pty Ltd v Meuross (1998) 82 FCR 150 at 151 that "a proceeding in which contempt is charged, though commenced by motion in an existing proceeding, is nevertheless dealt with in a proceeding which is to be regarded as separate and distinct from the existing proceeding. " Reference was also made to my decision in Textile Clothing and Footwear Union of Australia v Morrison Country Clothing Australia Pty Ltd (No 2) [2008] FCA 1965. It was contended that the applications relating to contempt did not arise under the BCII Act and that, accordingly, no right of intervention was conferred on the ABC Commissioner by s 71 of the BCII Act. I deferred ruling on this objection. In the event the ABC Commissioner played an extremely limited role in the proceeding before me. He did not call any evidence. He adopted the submissions made by Bovis and he referred the Court to certain authorities relating to contempt of court. In these circumstances it is not necessary that I come to a concluded view on the question of whether the ABC Commissioner had a right to intervene in the proceeding under s 71 of the BCII Act. There is, I think, force in the CFMEU's objection that, although Bovis' notices of motion were filed in the proceeding commenced before Marshall J, the contempt proceeding is not a proceeding arising under the BCII Act. It is, rather, a separate and distinct proceeding, one which does not arise under that Act. On the other hand it is arguable that contempt proceedings are civil proceedings which may arise, at least indirectly, from a proceeding under the BCII Act in which injunctions are sought and are made and it is subsequently alleged that they have not been complied with. In the circumstances I consider that it was appropriate to hear the ABC Commissioner as amicus curiae . The ABC Commissioner is a statutory office holder who, in exercising his statutory functions, can be expected to have a developed appreciation of the conduct of industrial relations in the building industry. As the injunctive relief had been sought, at least in part, in reliance on provisions of the BCII Act, there was reason to expect that the ABC Commissioner might have provided significant assistance to the Court on matters of which Bovis may not have been aware. The assistance was provided by way of short submissions which did not add to the cost of the proceeding or cause any delay in dealing with Bovis' application: see Levy v State of Victoria (1997) 189 CLR 579 at 604-5. At the outset of the hearing Counsel for Bovis invited me to make a direction, under s 53(1) of the Evidence Act 1995 (Cth), that an inspection of the site be conducted. The application was opposed by the CFMEU. I deferred ruling on the application until the evidence, including video footage of the entrance gate to the site and of the surrounding area had been placed before the Court. I did so because I wished to decide whether the proposed inspection would assist me in understanding the evidence, both written and visual, on which Bovis relied. Having done so, I concluded that I would not be so assisted and declined to order that an inspection occur. (b) In so far as Matt Hudson, Ralph Edwards, Derek Christopher, Brendan Murphy, Gerard Benstead, Elias Spernovasilis and Shaun Reardon were present at the CFMEU controlled blockade on or after 5.30pm on 19 February 2009, that the said blockade was implicitly authorised by the CFMEU through their inactivity or indifference to the continuing blockade of the RCH Site. The affidavits were those of: Stephen Mark Broadhead (an Industrial Relations Manager employed by Bovis) sworn on 20 February 2009; Craig Ashley Peterson (Site Manager for Bovis on the site) sworn on 20 February 2009; Craig Ashley Peterson sworn on 23 February 2009; Glen Souter (Investigator) sworn on 23 February 2009; Justin Lloyd Trickey (Security Guard) sworn on 23 February 2009; and Kate Sanderson (Investigator) sworn on 24 February 2009. Documentary evidence was also tendered. Records maintained by the Roads Corporation of Victoria disclosed the registered owners of various vehicles which had been observed to have been parked on the driveway leading to the site entrance gate. A copy of part of the transcript of the hearing before Watson SDP in the Commission on 19 February 2009 was tendered. Bovis relied on passages in the transcript which indicated that counsel there appearing for the CFMEU was aware of the substance of Marshall J's orders and the time at which she disclosed this knowledge to the Commission. This material was relied on in support of both notices of motion. Five cars were parked across the driveway which led to the main vehicle entrance gate on Flemington Road. The registration numbers of those cars were not recorded. Eight people were next to the cars, four or five of whom were sitting on chairs and the remainder were standing close by. Included in the eight were Ralph Edwards, President of the Victorian branch of the CFMEU, Matt Hudson, Vice-President of the Victorian branch of the CFMEU, and Derek Christopher, Gerard Benstead and Brendan Murphy each of whom are CFMEU officers or organisers. Mr Peterson told Mr Hudson, Mr Christopher and Mr Edwards that he had just been to Court, that the Court had made orders and that they needed to remove the cars from the driveway. Mr Hudson said that he hadn't received any orders and that he would wait for instructions from his office. Mr Peterson attempted to give Mr Edwards a copy of the sealed Orders, but he would not accept them. Mr Peterson then attempted to give a copy of the Orders to Mr Hudson but, like Mr Edwards, Mr Hudson would not take the Orders. Following this, Mr Broadhead attempted to give Mr Christopher a copy of the Orders. When he would not accept them, Mr Broadhead dropped a copy of the Orders on Mr Christopher's legs. Mr Christopher let it fall to the ground. Mr Broadhead then put a copy of the Orders on Mr Hudson's lap. Mr Hudson also let the copy of the Orders fall to the ground. Mr Peterson indicated to Mr Hudson that Mr Hudson needed to call the CFMEU's lawyers and that he would be given half an hour to do so, following which the police would be called and he would return to Court to get the people and vehicles moved. Mr Hudson replied with words to the effect "It's do or die for us, you do what you have to do. " Again Mr Broadhead tried to give Mr Hudson a copy of the Orders, but Mr Hudson refused and said he would wait to hear from his office. At approximately 6.20 pm, the same five cars were still obstructing the vehicle entrance to the site. Mr Peterson recognised these cars as new model Commodore cars driven by CFMEU officials. Again, the registration numbers were not noted. Mr Broadhead asked Mr Hudson whether he (Mr Hudson) had contacted the CFMEU's legal people. Mr Hudson said "No, but we're not going anywhere. " Mr Peterson gave Mr Hudson a copy of the Orders and said he should read them. Mr Broadhead asked whether they were going to move the cars. Mr Hudson asked for half an hour to respond. At approximately 7.00 pm, Mr Peterson received a phone call from the driver of a waste truck who was scheduled to drop off bins on the site. The driver told Mr Peterson that he would be at the site in ten minutes. At this time, the entrance of the site was still obstructed by five or six parked Commodore vehicles. Some but not all of the cars were cars which had been observed earlier. Mr Peterson approached Mr Edwards and asked for Mr Hudson. He told Mr Edwards that Bovis had a delivery coming and that he needed Mr Edwards to move the cars. Mr Broadhead then asked Mr Edwards whether he had heard anything from his office and whether he was going to move the cars. Mr Edwards said words to the effect "No, we are not moving them. " When it arrived, the waste truck was unable, because of the parked cars, to drive through the vehicle entrance gate to the site. It left. Whilst some of these events were occurring at the site the proceeding before Watson SDP was continuing in the Industrial Relations Commission. At some time between 5.12 pm and 6.17 pm the legal representative of the CFMEU appearing in the Commission, advised His Honour "that recently the Federal Court has made orders in relation to --- that affect the Royal Children's Hospital site. Under what provision? I have not seen the orders and [have] no understanding as to their exact terms. The orders have been made and the orders --- they haven't been served, as I understand it, your Honour, and am instructed. A gazebo or tent was set up in the driveway and CFMEU flags were erected on either side of the driveway. Eight of the cars were cars which Mr Peterson had observed to be driven by CFMEU officials, including a grey Commodore driven by Shaun Reardon. Mr Peterson recorded some, but not all, of the registration numbers. Mr Peterson asked Elias Spernovasilis and Mr Reardon, both Vice Presidents of the CFMEU, whether the CFMEU was going to clear the vehicles away from the gates that day. Mr Reardon told Mr Peterson to "Fuck off". Mr Spernovasilis said "just ignore them. " At approximately 7.20 am, Mr Peterson and Mr Broadhead walked to the entrance of the site where around 15 or 20 people were standing, including Mr Edwards, Mr Reardon, Mr Christopher and two Multiplex Shop Stewards. Mr Hudson, John Setka, Assistant Secretary of the CFMEU, and Noel Washington, Senior Vice President of the CFMEU, got into one of the vehicles that was parked in the driveway. Mr Broadhead asked Mr Reardon and Mr Edwards what was going on and whether the cars were going to be removed. Mr Reardon avoided the question and said repeatedly "Fuck off, fuck off, fuck off. " Between 7.20 am and 9.20 am, various cars were parked at the entrance at different times. These included cars with the following registration numbers which are registered in the name of the CFMEU: UMO774, WQM701, UOI603, WML264 and TXG354. At approximately 9.30 am, Mr Peterson took photographs of the entrance to the site, one of which shows a vehicle with the registration number UMO774 parked left of centre in the driveway, facing the gate, less than one metre from the gate. Two other cars are parked side by side in the driveway, parallel to the gate, close to the road and about four metres from the gate. He observed approximately 20-30 males at the main gate, vehicles parked at the main gate, two temporary shelters, tables and chairs, a fire lit in a 44 gallon drum and a pile of firewood. His surveillance was interrupted at approximately 12.00 noon by men who rocked the van, verbally abused him, and deflated the tyres of his van. One man smashed the front left hand driver's window of the van. Mr Souter's surveillance tape was taken as were his written notes. Mr Souter filed a police report. Mr Justin Trickey, a security guard employed by Monjon (Australia) Pty Ltd, was stationed at gate 1, the main vehicle entrance gate, from 6.00 am until 6.00 pm on 21 February 2009. Numerous vehicles were parked in front of gate 1 during that period. Mr Trickey recorded the registration details, the times the vehicles came onto the driveway and the times they left the driveway, in a Security Activity Report. Those registration numbers included WQN701 and WML266, which are both registered in the name of the CFMEU. Vehicle number WQN701 was parked in front of gate 1 from 7.50 am until 1.21 pm. The Security Activity Report recorded that a car with the registration number WML266 arrived outside gate 1 at 11.10 am. There is, however, no record of when this car left (if it did). In the Security Activity Report, Mr Trickey also identified various CFMEU officials who had become known to Mr Trickey during his six months on the site. Those individuals included Shaun Reardon and Matt Hudson, who Mr Trickey observed arriving in the vehicle with registration number WML266. Mr Reardon was observed placing numerous stickers on the outside of gate 1. A second gazebo tent was erected during the morning and additional CFMEU flags were erected. Again Mr Trickey recorded the registration details, the times vehicles came onto the driveway and the times they left the driveway in a Security Activity Report. The registration numbers recorded in the Security Activity Report included WML266 and TWF017 each of which are registered in the name of the CFMEU. WML266 was parked on the driveway at 9.43 am. TWF017 arrived on the driveway at 12.32 pm. There is no record of when, if at all, these cars left the driveway. Mr Trickey also observed two CFMEU officials at the entrance of the site: Mr Hudson who arrived in the vehicle with the registration number WML266 and Mr Setka who arrived in the vehicle with the registration number TWF017. Ms Sanderson undertook surveillance at the site between 7.00 am and 8.00 pm on 22 February 2009 and recorded video footage. The footage ran for approximately 15 minutes and was taken over the course of the day. Throughout the day, two gazebo tents were located side by side at the entrance of the site. The rear poles of the gazebo tents were within about a half a metre of the gate, on the left hand side of the driveway. The tents covered approximately one fifth of the driveway. By the end of the day, nine CFMEU flags flew near the entrance to the site: one was attached to the gazebo tents and three were located in the centre of the driveway; one of which appeared to be attached to the gate itself. The number of men and women milling in and around the entrance varied throughout the day --- initially there were approximately six men but at lunch time there were as many as twenty people on the driveway. At 9.18 am a silver vehicle with the numberplate TSK934 was parked in the centre of the driveway, to the right of the gazebos. The rear of this car was about half a metre from the gate. This car was still there at 10.26 am, along with another vehicle which was parked on the driveway close to the road, but was gone by 11.25 am. An hour later, a different vehicle (a black vehicle) was parked in the centre of driveway, facing the gate. The front of this vehicle was within about four metres of the gate. The number plate of this vehicle was not clear. Another vehicle (a green vehicle) was parked on the street at the start of the driveway in a position that seemed to block in the black vehicle. The number plate of this vehicle was not clear on the film. At 1.41 pm four cars were parked on the right hand side of the driveway. One car was facing the gate within about two metres of the gate, and the other three were parked closer to the road. The fronts of these three vehicles pointed towards the bottom right hand corner of the driveway. All of these vehicles were light coloured. None of their registration numbers is apparent from the video footage. A motorbike was also parked in the centre of the driveway at this time. At 3.38 pm a silver car was parked in the centre of the driveway, facing the gate. Again the number plate of this car is not shown in the footage. It is also unclear from the video footage whether the four cars that were on the driveway at 1.41 pm were still on the driveway at this time. By 3. 43 pm the car that was in the driveway at 3.38 pm and the four cars that were in the driveway at 1.41 pm were certainly not all in the driveway. Three cars were parked in the driveway at this time. One was parked to the left of the centre, at a 45 degree angle pointing towards the centre of the driveway, about three metres back from the gate. The other two vehicles were parked on the driveway parallel to the gate, just off the road. Two motor bikes were also parked on the lower right hand side of the driveway, close to the road. None of the registration numbers of these vehicles is clear on the film. At 4.39 pm only one silver vehicle was parked in the driveway. This vehicle was directly in the centre of the driveway, about three metres away from the gate. The number plate of this vehicle was TVR [obstructed] 64. By 4. 44 pm this vehicle had been moved. At that time there was one silver car parked in the driveway between the gazebo tents and the road, pointing towards the centre of the gazebo tent, and a second vehicle was parked parallel to the gate just off the road. At 7.30 pm there were three cars on the driveway. One black vehicle was parked facing the gate, within about two metres of the gate, on the left hand side of the driveway. The second vehicle was parked parallel to the gate in the centre of the driveway, and the third vehicle was parked between the second car and the road, also parallel to the gate. A One Steel delivery truck was due to enter the site at approximately 8.40 am. At approximately 8.45 am Mr Peterson went to the vehicle entrance gate and asked Mr Hudson and Mr Washington whether the truck was going to be able to get in. Mr Hudson said words to the effect "it's not us [the CFMEU] locking the gates it's you blokes [Bovis]". Mr Peterson said that if they moved the marquee, and the tables and chairs, Bovis would open the gates. Frank O'Grady, a Vice President of the CFMEU, and Alex Tadic, a CFMEU organiser were at the vehicle entrance gate at this time. Mr Trickey came to the vehicle entrance gate and opened the gate. Mr Peterson then said to Mr Hudson that the gate was still blocked by the cars and the marquee. Mr Hudson did not respond. There was no way of getting the truck through the entrance without injuring someone. The One Steel truck remained outside the entrance for approximately 30 minutes and then left. However, the disobedience will amount to a criminal contempt if it involves "deliberate defiance or, as it is sometimes said, if it is contumacious": see Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 530 ... However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534. In Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 Gillard J identified the elements which it is necessary for a complainant to establish in order to make good a charge of civil contempt of court. In accordance with the principles of the criminal law, in proving element (v) it must be proven that the act or omission which constituted the breach of the order was deliberate and voluntary. It is also contended that the statements of charge fail to provide sufficient detail of the alleged contravening conduct. They contended that orders 1 and 2 prohibited actual obstruction which denied access to a particular person or persons, and did not deal with a denial of access where no access had been sought, that is to say, the orders did not prescribe a threatened or potential impediment. This construction was to be favoured because of the use of the definite article, "the passage", reinforced by the words "preceding into or from" which spoke of an actual obstruction to the passage, not a threatened obstruction in the sense of a hypothetical obstruction. In order 2, the use of the word "access" was shorthand for the words "with the passage of any person, whether on foot". The word "access", when read in context, was dealing specifically with a particular vehicle. A construction of the orders which favoured actual obstruction was further supported by the use of the word "that" in the phrase "that interfere with or impede", which was not directed to vehicles which "may" interfere. Dictionary definitions of "obstruct", "impede" and "interfere" were offered in support of this submission. It is trite law that injunctive orders of the Court "should be granted in clear and unambiguous terms which leave no room for the persons to whom they are directed to wonder whether or not their future conduct falls within the scope or boundaries of the injunction: see ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 259 per Lockhart J, with whom Gummow and French JJ agreed. What is not as clear is what is comprehended, in the context, by the word "unambiguous" and what consequences flow from a finding of ambiguity if it is sought to enforce an order in proceedings for contempt. In Australian Consolidated Press Ltd v Morgan [1965] HCA 21 ; (1965) 112 CLR 483 the appellant contended that, unless the language of an undertaking was unambiguous and certain, it should not be enforced by contempt proceedings. This submission was rejected by the Court. But, if it bears a meaning which the Court is satisfied is one which ought fairly to have been in the contemplation of the person to whom the order was directed or who gave the undertaking as a possible meaning, the fact that that meaning results from a process of construction and involves a choice of possible meanings does not, in my opinion, preclude the Court from enforcing the order or undertaking in the sense in which the Court assigns to it. If the Court is satisfied that the party said to be in contempt bona fide believed himself bound only by a construction which the Court thinks to be erroneous, it may for that reason, in its discretion, refuse to make an order or, if it makes an order, refuse to make an order for costs against that party. But, even in such a case, the enforcement of the plaintiff's rights must not be left out of account. A party who has bona fide acted on erroneous view of an order or undertaking may, according to the circumstances, nonetheless be justly adjudged guilty of contempt in procedure. In my opinion, this is equally so where, because of its terms or circumstances, the order or undertaking requires construction in order to determine its meaning and remove ambiguities patent or latent. " (Emphasis in original). If that were so, I would agree that a mistake in construction could not excuse disobedience, although it might perhaps mitigate its consequences ... If its true meaning, although not immediately plain, can be ascertained according to ordinary rules of construction, then the person giving the undertaking is bound by it in that sense. But the uncertainties that lurk in the words of this undertaking, and which were exposed during the argument, cannot be resolved in that way, for they do not arise from a debatable construction but from an uncertain denotation. At least where the true construction of the order is one which ought fairly to have been in the contemplation of the person to whom the order was directed ... the Court which entertains the charge of contempt will be required to determine that construction. Of course, it may be highly relevant to the question of punishment that a respondent failed to comply with the order because he, she or it placed a construction on the order that was not its true construction. Access was being impeded because vehicles and other items had been placed on the driveway which led from Flemington Road to the gate. The registration numbers of particular vehicles which, it was said, were parked on the driveway from time to time, were identified. It was in this context that his Honour's orders were made. Order 1, in my view, left the CFMEU with no scope for uncertainty as to whether particular conduct fell within its terms. The order clearly restrains the CFMEU, whether acting by itself or through its officers, from doing any act which obstructed or interfered with the passage of persons (including those travelling in vehicles) entering or leaving the site. Order 2 was in mandatory terms. It required the removal of any vehicles that were within the CFMEU's control including vehicles bearing certain registration numbers that interfered with or impeded access to the site. The vehicles were to be removed "forthwith". Again, the CFMEU could have not entertained any reasonable doubt about what the order required. It required the immediate removal of those vehicles over which the CFMEU had control and which were interfering with vehicular access to the site. The first charge alleges a failure by the CFMEU to comply with Marshall J's second order which required the removal of vehicles which were impeding access to the site. The second charge alleges that the CFMEU has contravened the first order made by his Honour by interfering with the passage of persons into and from the site on the 3 days immediately after the order was made. In each case the charge seeks to paraphrase the terms of the relevant order and then alleges what it is that the CFMEU failed to do or did in contravention of the relevant order made by Marshall J. Particulars follow. In Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees' Union (No 2) (1987) 15 FCR 64 Wilcox J dealt with a complaint that a statement of charge was deficient. I think that they do. In each case the charge sets out the relevant orders and then alleges, in positive terms, that the respondent did the enjoined act. In essence, the complaint is that, the respondent being told to refrain from particular conduct, the respondent in fact committed that conduct. This is a clear enough allegation. It is true that, without more, the respondent would not know whether it is the case of the applicant that it carried out some positive act amounting to breach, and if so what act, or whether it is said that there was a contravention by the failure of the respondent to take a positive step necessary to bring to an end the condition of maintaining the ban. But that is the function of particulars; and in each of these cases particulars were included in the charge. In relation to omissions it is difficult to do more than to say that no action was taken. But this is sufficient. The respondent then knows the case it has to meet and that it will be an answer to that part of the case to show, if it can, either that no positive action was, under the circumstances, required or that it did take the relevant step ... In the case of allegations of positive actions in contravention of an order particulars of a charge should inform the recipient of the substance of the case sought to be made. It is not necessary to set out the evidence which will establish that case; that will normally be contained in the affidavits. While the particulars in paragraph (a) sufficiently identified certain vehicles, no details of the other vehicles comprehended by the charge were provided. The substance of the first charge is that the CFMEU failed to comply with Marshall J's order that it remove any vehicles over which it had control which were impeding access to the site. In substance it was alleged that no action was taken to disturb the status quo. This, as Wilcox J held in Concrete Constructions , is sufficient for the purposes of a charge. Although it was not strictly necessary for it to do so Bovis provided particulars of some of the vehicles which were impeding access to the site and identified various officials of the CFMEU who were present. It was not obliged, in my view, to go further. The CFMEU's principal complaint in relation to the second charge, which was based on order 1, was that it was not clear whether the charge was dealing with acts performed directly by the CFMEU, by their officers, servants or agents performing the prohibited acts, or whether it was dealing with acts of the CFMEU to procure, encourage or induce another person to obstruct or interfere. The construction to be preferred depended on whether one read the prohibition on obstruction ("to obstruct or interfere with the passage of any person") as being part of the restraint imposed on the CFMEU ("be restrained from doing any act"), or whether the restraint on the CFMEU was limited to aiding or abetting any person to obstruct ("to aid, abet, counsel, procure, encourage or induce any person to obstruct or interfere"). The CFMEU urged the latter disjunctive construction on the Court and submitted that the order identified a first person or persons, the officers and agents of the CFMEU, a second person, the person or persons encouraged or induced, and then a third person, the person whose passage was interfered with. The necessary starting point of a charge was to identify which aspect of the order was said to have been breached. The second charge, so it was contended, had failed to do this. It was unclear whether the charge was a charge of direct obstruction or indirect obstruction or both. In the alternative, it was submitted that, if there was no disjunction intended in the way order 1 was to be interpreted, such that the entire order was directed to indirect obstruction by a second person, the second charge needed to so state with sufficient clarity. The second charge failed to specify the conduct relied on, and whether that conduct was direct or indirect, and, if indirect, in what way was the conduct indirect, who were the servants and agents and who were the persons induced, or if the acts were said to be direct who were the respondent's servants or agents. The second charge also failed to specify when the conduct occurred, what, in relation to each act, led to the obstruction or interference and who was obstructed. The blockade or picket referred to in paragraph (b) of the second charge were not "an act" in the sense referred to in order 1. The erection of tents or gazebos and the parking of vehicles were relied on by Bovis but it had not provided particulars about: The second order, made by Marshall J, was in a form which is commonly adopted in cases were industrial action is interfering with the normal performance of work. It prevents the respondent from acting directly, acting through servants or agents or encouraging others to act in a particular way. The order made by his Honour relevantly restrained the CFMEU, by its servants or agents, from taking the proscribed action. I have already held that the order was expressed with the necessary clarity. The second charge, in substance, alleges that the CFMEU had, acting as it must through servants or agents, performed acts which had been enjoined by the order. The allegation is, I consider, made with sufficient clarity. The particulars subjoined to the charge identified some of the vehicles which, it was said, were so parked as to interfere with and impede access to the site. Paragraph (b) of the particulars does not allege that, what is described as a "blockade or picket" was "an act". Rather, the "act" identified in the paragraph was maintenance of the blockade or picket, utilising the cars and the tents. There was no need to provide further particulars as to who erected the obstacles, how long they were in place and how they caused obstruction or interference. These were matters for evidence. In my view, each statement of charge was, when the charge is read as a whole, sufficient to convey the gist or substance of the breaches of Marshall J's orders which were alleged by the prosecutor. The first charge alleged that the relevant breach of the second order made by His Honour occurred by reason of the CFMEU's failure to remove vehicles within its control which were interfering or impeding access to the site. Some of the vehicles were identified. Particulars were then provided of the foundation for the allegation that the CFMEU was responsible for the alleged failure to remove the vehicles. The second charge alleged that the CFMEU contravened the first order made by Marshall J by maintaining, on nominated dates, an obstruction or interference to the movement of persons (whether on foot or in a vehicle) into or out of the site. It is clear that this is an allegation of acts performed by the CFMEU acting, as it must, through individual officials. The particulars alleged that the obstruction and interference was caused by the marquee or tents placed at the entrance and by the parking of vehicles (some of which are identified by reference to their registration numbers) so as to interfere with and impede access to the site. This invitation is made in circumstances in which none of the officials of the CFMEU who were present at the Parkville site at relevant times and who might reasonably have been expected to have knowledge of relevant events, gave evidence. No adverse inference can be drawn merely because the CFMEU has chosen not to call evidence in defence of the charges. The failure is nonetheless of potential significance. The most that can be said in criminal matters is that there are some cases in which evidence (or an explanation) contradicting an apparently damning inference to be drawn from proven facts could come only from the accused. In the absence of such evidence or explanation, the jury may more readily draw the conclusion which the prosecution seeks. " (Emphasis in original). (Footnote omitted). The inferences which Bovis invited the Court to draw are founded on uncontradicted evidence. In some instances I have not been prepared to draw the inferences which Bovis contended were open on the evidence. In each instance in which I have been prepared to draw a particular inference I have done so because I have been satisfied beyond reasonable doubt that the inferences ought to be drawn, that the conclusions contended for by Bovis were supported by the evidence and that the evidence did not support a finding that there is any reasonable or rational hypothesis consistent with the CFMEU's innocence. That order required the CFMEU forthwith to remove any vehicles that were within its control (including vehicles bearing particular registration numbers) if those vehicles were interfering with or impeding access to the site. The requirement that the vehicles be removed "forthwith" indicates that Marshall J was persuaded that certain vehicles, including those nominated by reference to their registration numbers, were impeding access to the site at the time at which the order was made. The order would have been contravened had the CFMEU failed to remove vehicles, over which it had control, from outside the gate to the site, as soon as reasonably possible after the order had been served on it. The order did not go on to provide that, once removed, the vehicles could not be returned to the driveway or that they should not be replaced by any other vehicles. Presumably, it was assumed that any attempt to restore the obstructing vehicles would constitute a breach of the first order. Whether that be so or not the first charge does not allege that the CFMEU failed "forthwith" to remove the vehicles. Rather, it alleges that "on 19 February 2009 and 20 February 2009 and continuing, the [CFMEU] failed to remove vehicles within its control that interfered with or impeded access to the [site] ..." This failure was, it was alleged, a breach of Marshall J's second order. The difficulty which confronts Bovis is that his Honour's order was directed to the removal of the vehicles which he was satisfied were impeding access to the site at the time at which the order was made. As framed, the charge is broad enough to comprehend vehicles which were driven onto the driveway and parked there late on 19 February 2009 or on 20 February 2009, even if those vehicles had not been there at the time at which the orders were made. Bovis' difficulties are compounded by the state of the evidence concerning the vehicles which were present on the site at and after 5.30 pm on 19 February 2009. Mr Peterson returned to the site on 19 February 2009 at about the same time as the orders of Marshall J were served on the CFMEU. He noted that there were five cars parked across the driveway. He did not note the registration numbers of those cars. The same five cars were still on the driveway at about 6.20 pm. They were cars which Mr Peterson recognised as cars which were driven by CFMEU officials. Some of them were still there at 7.00 pm. It may have been arguable that the fact that the five vehicles which had been in the driveway at 5.30 pm were still there at 6.20 pm allowed the conclusion that they had not been removed forthwith upon the CFMEU becoming aware of the terms of Marshall J's orders. The statement of charge does not, however, allege that Marshall J's order had been contravened because the vehicles were not immediately removed. It only alleges that the CFMEU failed to remove them. Some of the five vehicles which were parked on the driveway at 5.30 pm had been removed by 7.00 pm. There was, therefore, no failure to remove those particular cars. The second order did not require the CFMEU to remove the vehicles which were parked on the site after 7.00 pm on 19 February 2009 and on 20 February 2009 and which had not been there at 5.30 pm. Some of the vehicles which had been parked across the driveway at about 5.30 pm were still there at 7.00 pm. They were vehicles which Mr Peterson had recognised as cars which were driven by CFMEU officials. The evidence does not disclose how long they remained there. Some, if not all of them, had been removed by the morning of 22 February 2009 when only one or two cars were parked on the driveway. I cannot, therefore, be satisfied that the CFMEU failed to remove the cars which had been parked across the driveway at about 5.30 pm on 19 February 2009. For these reasons I conclude that the CFMEU is not guilty on the first charge. That order, relevantly, required that the CFMEU (whether by itself, its officers or otherwise) not do any act "to obstruct or interfere with the passage of any person, whether on foot or in a vehicle preceding into or from the [site]". In framing the charge Bovis has identified the relevant "act" as being the maintenance, over a period of days, of "an obstruction or interference to the passage of any person ...". I understand this to be an allegation of on-going obstruction or interference contrary to his Honour's order. An issue also arises as to whether the charge comprehends both actual and potential interference with passage of persons on to and off the site. I will return to this issue later in my reasons. A further issue arises in relation to the dates referred to in the charge. The evidence establishes that there were two occasions, one on 19 February 2009 and another on 23 February 2009, on which there was actual interference with the movement of vehicles on to the site. Neither date is specifically mentioned in the statement of charge. No difficulty, however, arises in relation to the incident which occurred on 23 February 2009. The charge was dated 24 February 2009 and alleges that the obstruction and interference "was continuing" beyond the last date, specifically mentioned, namely, 22 February 2009. Bovis also seeks to rely on an incident which occurred on the evening of 19 February 2009. Although that date does not appear in the statement of charge the incident and its legal implications were the subject of submissions during the hearing. The CFMEU had the opportunity and did make submissions as to whether the incident on 19 February 2009 constituted a contravention of Marshall J's orders. The CFMEU had the opportunity of responding to the allegation that the actions of its officials, on 19 February 2009, caused it to be in contempt of the Court's orders. The CFMEU will suffer no prejudice if the second charge is amended to cover events on 19 February 2009. I will, accordingly, grant leave to Bovis to amend the charge in this way. The first order, made by Marshall J, was contravened on at least two occasions. The first incident occurred at about 7.10 pm on 19 February 2009. A waste truck which was due to drop bins on the site arrived at the Flemington Road end of the driveway at about that time. It was unable to proceed up the driveway because there were five or six Commodore cars parked across it. They were so placed as to prevent the truck entering the site. The second incident occurred between approximately 8.40 am and 9.10 am on 23 February 2009. A delivery truck approached the driveway but was unable to proceed to the gate and into the site because the driveway was obstructed by cars and a marquee. They were placed in such a way that the truck could not enter the site. After waiting about half an hour it left. On each of these occasions representatives of Bovis sought to have CFMEU officials, who were present, on or near the driveway remove the cars (and, on the second occasion, the marquee) so that the vehicles could enter the site. On 19 February 2009 CFMEU's officials, Mr Ralph Edwards, Mr Matt Hudson, Mr Derek Christopher, Mr Gerard Benstead and Mr Brendan Murphy were on or near the driveway between 5.30 pm and shortly after 7.00 pm. When Mr Peterson returned from the hearing before Marshall J he sought to provide copies of his Honour's orders to Messrs Edwards and Hudson but they refused to accept them. Shortly afterwards Mr Broadhead attempted to give copies of the orders to Mr Christopher and Mr Hudson but they did not accept them. Mr Peterson advised Mr Hudson to call the CFMEU's lawyers. Mr Hudson replied with words to the effect of "it's do or die for us, you do what you have to do. " Mr Hudson said he would wait to hear from his office. At about 6.20 pm Mr Broadhead asked Mr Hudson whether he (Mr Hudson) had made contact with the CFMEU's lawyers. Mr Hudson said "we're not going anywhere". At that time Mr Peterson gave Mr Hudson a copy of the orders and advised Mr Hudson to read them. Mr Broadhead then asked whether the officials were going to move the cars. Mr Hudson asked for time to respond. When it became known that the waste truck was approaching the site Mr Peterson approached Mr Edwards and asked to see Mr Hudson. Mr Peterson advised Mr Edwards that Bovis was expecting a delivery and that he wanted Mr Edwards to move the cars. Mr Broadhead then asked Mr Edwards whether he had heard anything from his office and whether he was going to move the cars. Mr Edwards responded with words to the effect of "no, we are not moving them. " On 23 February 2009 at about 8.45 am a number of CFMEU officials were present outside the entrance gate. They were Mr Hudson, Mr Washington, Mr O'Grady and Mr Tadic. Mr Peterson approached Mr Hudson and Mr Washington near the entrance gate and asked whether a delivery truck was going to be able to get in. Mr Hudson said that "It's not us [the CFMEU] locking the gates it's you blokes [Bovis]. " Mr Peterson said that if the officials moved the marquee and the tables and chairs, Bovis would open the gates. Mr Trickey a security guard employed by a Bovis sub-contractor, tried to open the gate. This was not possible. Mr Peterson then said to Mr Hudson that the gate was still blocked by cars and the marquee. Mr Hudson did not respond. The truck was not able to enter. Between 5.30 pm on 19 February 2009 and 23 February 2009 cars registered in the name of the CFMEU and driven by officials of the CFMEU came and went at irregular intervals. When near the site they were parked on or near the driveway. From at least the morning of 20 February 2009 until 23 February 2009 an increasing number of red banners with the letters CFMEU emblazoned on them in white characters were placed on or near the driveway. A large number of CFMEU officials were present at the site during the relevant period. When determining whether a corporate entity should be adjudged guilty of contempt by reason of the actions of its employees or agents it is necessary that there be a careful examination of the principles which underpin such an attribution of liability. The principles were considered by the Queensland Court of Appeal in Evenco Pty Ltd v Australian Building Construction Employees and Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118. The trial judge had held the union vicariously liable for the contempt of one of its organisers. He had done so on the basis that the organizer was acting "in the course of his employment". On appeal McMurdo P and Williams J agreed that the union was vicariously liable under the "course of employment" test. Pincus JA applied a stricter standard. An employer should not, one would expect, ordinarily be held liable in proceedings which are of that kind, on the basis of actions of an employee which had been forbidden; particularly is that so where one considers that even a finding of contempt against an employer may do serious damage, leaving aside the prospect of punishment such as fines or imprisonment. The proper rule is that the employer must be shown to have authorised the act complained of or shown not to have taken proper steps to prevent it. In the present case, the judge held [the union] liable on the "course of employment" test and that in my respectful opinion was not the proper test. A less stringent approach would expose a body corporate to liability by virtue of the conduct of an employee, however aberrant it might be, as long as it could be characterised as 'in the course of employment'. Significant consequences are likely to follow such a finding. Particular care must be taken before it is held that an organisation is liable for contempt of court by reason of the actions of its employees or agents. I respectfully agree with Pincus JA that a corporate entity should not be found guilty of contempt, in such circumstances, unless it is established, beyond reasonable doubt, that the organisation has authorised the act complained of or has been shown not to take proper steps to prevent it. I am satisfied beyond reasonable doubt that the CFMEU officials were, at relevant times, acting for and on behalf of the CFMEU. So much may readily be inferred from the erection of the CFMEU banners which were displayed prominently on or near the driveway, the large number of CFMEU officials who were present at the site, the parking on the driveway of many vehicles which were registered to the CFMEU, and observed to be driven by officials, the responses given by the officials when they were spoken to by Bovis managers and, in particular, the absence of any disavowal, at any time during any of these conversations, of the capacity of the organizers to move or cause to be moved the vehicles and other obstructions which were preventing access to the site along the driveway. On the contrary, they asserted, on a number of occasions, after the CFMEU had been served with the orders, that they were not going to move the cars or simply ignored requests that they do so. In coming to this conclusion I am mindful of Keely J's exhortation, in GTS Freight Management Pty Ltd v Transport Workers Union of Australia [1990] FCA 78 ; (1990) 25 FCR 296 at 305-6, to the effect that, in determining whether or not a registered trade union is to be held responsible for the acts of its officials, the Court must act on evidence and not suspicion or speculation. In the present case the many officials who were present at the site were plainly acting as servants and agents of the CFMEU and within their ostensible authority. The CFMEU through its officers, well knew that they were there and what they were doing. The officials on site were in contact with a union office and at least one indicated that the group was awaiting instructions from persons at that office as to what should be done following the making of orders by the Court. It did not direct them to desist despite having the means and the opportunity to do so. I infer that it authorised and encouraged the actions which are said to contravene Marshall J's orders. The second charge alleges contraventions of Marshall J's first order on each of three days --- 20, 21 and 22 February 2009 "and continuing". I have, thus far, dealt with the two incidents in which the passage of drivers of vehicles was actually interfered with by reason of the presence in the driveway of cars and a marquee or tent. The evidence also establishes that, for considerable periods on 20, 21 and 22 February, vehicles registered in the name of the CFMEU and driven by officials of the union were parked on the driveway thereby acting as a potential impediment to any movement of persons in vehicles into and out of the site. The charge alleges that the CFMEU "maintained an obstruction or interference to the passage of any person, whether on foot or in a vehicle, proceeding into or from the [site]. " As framed the charge is open to the construction that it applies to both an actual or potential interference with a person's passage or merely to an actual interference. Given this uncertainty and, having regard to the nature of the proceeding, I consider that it is appropriate to adopt a strict construction of the charge such that it only deals with the actual obstruction of persons who wish to enter or leave the site. I do not, therefore, consider that the CFMEU can be held liable for causing obstruction or interference on occasions when there is no evidence to suggest that any person was actually impeded from moving onto or from the site. I am satisfied that each element of the second charge has been established beyond reasonable doubt, but only in respect to the incidents on 19 and 23 February 2009 when vehicles were prevented from entering the site. The second charge has been established beyond reasonable doubt but only in relation to the two incidents which occurred, respectively, on 19 and 23 February 2009. I will give directions as to the steps which need to be taken in advance of the hearing on penalty. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | court order whether orders sufficiently clear to found proceedings for contempt whether statement of charge adequate to found proceedings for contempt whether the australian building construction commissioner should be heard as an intervener contempt practice and procedure |
The following paragraphs express the reasons why I did so. The Spanish Club Ltd (the Company) was incorporated on 9 November 1972 as a company limited by guarantee. It is a not for profit company. On 17 November 2008, the plaintiff (Mr Whittingham) of PKF Chartered Accountants and Business Advisors was appointed administrator of the Company pursuant to s 436A of the Corporations Act 2001 (Cth) (the Act). On 27 February 2009, pursuant to s 439C(a) of the Act, the creditors of the Company resolved that the Company execute a certain deed of company arrangement (DOCA). On 16 March 2009, the Company by its administrator Mr Whittingham executed the DOCA. By cl 3.1 of the DOCA, the Company appointed Mr Whittingham as DOCA administrator. Clause 11.1 of the DOCA provides that as DOCA administrator, Mr Whittingham, has the power to convene meetings of members of the Company, inter alia, to elect a new Board of Directors. Clause 12.1 obliges him to cause the Company to convene either an Annual General Meeting (AGM) or an Extraordinary General Meeting (EGM) for that purpose. Clause 12.2 provides that the election must be conducted by the Australian Electoral Commission (AEC). On 23 September 2009 the Company and Mr Whittingham entered into a deed of variation which varied the DOCA in respects not presently material. Accordingly, the expressions "the Committee" is synonymous with "the Board of Directors", and a "member of the Committee" is a "director" of the Company. Mr Whittingham desires to convene an AGM to be held on 13 November 2009 at the Star City Casino in Sydney. A booking has been made accordingly. A problem has arisen because of the interaction of s 249H(1) of the Act and provisions of the Company's constitution (Memorandum and Articles of Association) relating to the nomination of persons for election as directors at an AGM. Section 249H(1) of the Act provides, in effect, that at least 21 days' notice must be given of a meeting of a company's members. Clause 47 of the Company's Articles of Association provides for the giving of a shorter period of notice but this can be disregarded because s 249H(1) of the Act is mandatory, and only makes provisions for company constitutions specifying a longer, but not shorter, period of notice. Clause 67 of the Articles provides that a notice sent by post is deemed to have been served on the day following posting (the replaceable rule expressed in s 249J(4) of the Act does not apply because the Company was registered before 1 July 1998 and did not repeal its constitution after that date --- see s 135 of the Act). On the basis that "service" is to be equated with the "giving" of notice and that cl 67 applies in the context of s 249H(1), notice of the AGM to be held on 13 November would be required to be posted no later than 21 October 2009 so that it would be deemed to be given on 22 October 2009. Section 29 of the Acts Interpretation Act 1901 (Cth) provides for service to be deemed to be effected at the time at which the relevant letter would be delivered in the ordinary course of post. Apparently the members of the Company reside in New South Wales, perhaps all in the Sydney metropolitan area, and on the basis that this provision rather than cl 67 applies, I am prepared to infer that again the day following the day of posting would be the deemed date of service. It follows from the immediately preceding two paragraphs that I need not discuss whether it is by reason of cl 67 or the statutory provision that the notice must be posted no later than 21 October 2009. The problem that has arisen is that cl 34(a) of the Articles of Association provides that nominations for the election of the Committee must be lodged with the Secretary 21 days before the AGM. The AEC has construed that provision as requiring that members be allowed up to and including 23 October 2009 in which to lodge their nominations. However, it is impossible to allow that full period for the lodgement of nominations, and also to post notice including details of the nominations on 21 October 2009. This difficulty would arise irrespective of the date fixed for the AGM, that is to say, it would not be overcome by the fixing of a date later than 13 November 2009. The solution to the problem is found in ss 447A and 447D of the Act. Section 447A provides in subs (1) that the Court may make such order as it thinks appropriate as to how Pt 5.3A is to operate in relation to a particular company. Such an order may be made on the application of, inter alia, the administrator of a DOCA: see subs (4). Section 447D provides that the administrator of a DOCA may apply to the Court for directions about a matter arising in connection with the performance or exercise of any of his or her functions and powers or about a matter arising in connection with the operation of, or giving effect to, the DOCA. Section 444G, which falls within Pt 5.3A, provides that a DOCA binds the company, its officers and members, and the DOCA administrator. In the present case, this means that the issue that has arisen is about how Pt 5.3A (notably s 444G) is to operate in relation to the Company. How is Mr Whittingham to perform the obligation imposed on him by cl 12.1 of the DOCA in light of s 444G of the Act, having regard to the fact that members are entitled to lodge their nominations for the position of director right up to 21 days before the AGM? Either the requirement of at least 21 days' notice of the AGM under s 249H(1) must be shortened or the provisions relating to an AGM contained in the Company's constitution and incorporated by the DOCA's reference to an "Annual General Meeting" must be modified. It seemed to me that a satisfactory course was for the period for nominations to be shortened. After all, the Company's constitution does not require that invitations for nominations be sent to members a certain minimum period before the closing date for nominations. In other words, it would be possible, at least consistently with the letter of the constitution, for invitations to be sent only one week prior to the closing date for nominations provided that the closing date was no later than 21 days before the date of the AGM. In the order and direction that I made I included a requirement that notice of the election of members of the Committee and invitations for nominations be sent on or before 2 October 2009 with a closing date of 19 October 2009 at 12.00 noon. This gives members a greater opportunity to lodge nominations than that to which they would have been entitled at law under the Company's constitution. It was for the above reasons that I made the orders on 29 September 2009. | deed of company arrangement (doca) doca obliged doca administrator to cause company to convene general meeting of members for the purpose of their electing a new board of directors s 249h(1) of corporations act 2001 (cth) (the act) required that at least 21 days' notice be given of a meeting of a company's members company's constitution required that members have at least until 21 days before annual general meeting (agm) to nominate persons for election as directors at agm s 444g of the act (within pt 5.3a) made doca binding on doca administrator doca administrator could not comply with both s 249h(1) and s 444g and doca in so far as doca incorporated, by reference, company's constitution and its requirement touching agms. held : order made under s 447a of the act providing for closing of nominations earlier than 21 days before date fixed for agm. corporations |
On 29 August 2007, Spender J made orders in the proceeding commenced by the Commissioner of Taxation in which the Commissioner seeks declarations that legal professional privilege does not attach to particular documents which had, historically, been held in the possession of the respondent and were the subject of arrangements made on 9 June 2005 and 15 June 2005, for the delivery up of particular documents and the creation of disks (an original and a duplicate) containing electronic versions of scanned documents which were then in the possession of the respondent. 2 The order Spender J made on 29 August was that by 29 September 2007, the respondent was to provide the applicant with a list identifying which of the documents contained on the disks held by then, by the Supreme Court, were subject to legal professional privilege. 3 His Honour also made, by order 2, orders providing for the content of the list, including such things as the name of each document, a general description of the document, the date of the document, the size of the document, and other things. 4 His Honour, by order 3, ordered that the documents not appearing on the list, were to be released to the applicant on 28 September 2007 and by order 4, his Honour made a self-executing guillotine order that if the respondent failed to produce the list of documents in the matter and with the detail described, by 4 pm on 28 September 2007, then, in the absence of any order of the Court to the contrary, made before that time and date, all documents the subject of the application be released to the applicant. 5 That order was the subject of a further order made by his Honour on 1 October 2007 which had the effect of varying those orders with the result that the list was to be provided by 4 pm on 2 October 2007 and the documents not appearing on the list were to be provided to the applicant by 3 October 2007. And as to the self-executing guillotine order, there was a variation by order 3 of the order made 1 October 2007 to order 4 of Spender J of 29 August 2007 with the result that if the respondent failed to produce the list in the manner and with the detail described in the order, by 4 pm on 2 October 2007, then, in the absence of any order to the contrary made before that time and date, all documents the subject of the application would be released to the applicant. 6 After the making of the order by Spender J, the solicitors for the respondent embarked upon a process of isolating documents which would be the subject of a claim for legal professional privilege. The affidavit of Ashley John Tiplady deposes to those matters. Apparently, the process began on or about 10 September 2007 but what emerged was that the task had been delegated to some solicitors in the office and on 24 September 2007, Mr Tiplady became aware that the task could not be completed or had not been completed and was unlikely to be completed in the timeframes contemplated by the order of Spender J as varied because there was some difficulty in accessing some of the documents by opening the disk. 7 The affidavit of Ms Michelle Elaine Lindley, filed 3 October 2007, deposes to engagement between the solicitor for the respondent and the applicant concerning the question of access to, at least, electronic documents and some IT difficulty in opening particular files. It seems that on 28 September 2007, an initial list setting out the documents reviewed, and any claims for privilege, including the basis of such claims, was provided to the applicant. It seems that there was also on 2 October 2007 a list provided to the applicant of those documents which the respondent was unable to open. Those documents are electronic documents and there are 124 files referred to in the list which I understand contain many more documents than the number of files. We note that we are currently still reviewing a number of documents which we only gained access to today and envisage providing you with this tomorrow. We also note that we are still to provide you with a further list of documents for which a claim for legal professional privilege exists in relation to the documents which cannot be accessed. The applicant in the proceedings contends that there has not been compliance with the order or substantial compliance with the order. With respect to the documents which are not the subject of the electronic access opening difficulty, the applicant in the proceedings says that upon analysis of the schedule, one can see that there has not been compliance with the content of order 2 of his Honour's order. It seems to me that there is some force in what is said about that matter but I do not propose to decide the question of whether there is or is not substantial compliance for present purposes. 10 Having regard to the significance of legal professional privilege in our jurisprudence and particularly the observations of the High Court that legal professional privilege is a rule of substantive law available to a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings ( Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 at 9, per Gleeson CJ, Gaudron, Gummow and Hayne JJ), and having regard to the observations in the authorities that legal professional privilege is not merely a rule of evidence but an 'important common law immunity' not confined to simply processes of discovery and inspection (note the authorities collected in Comcare v Foster [2006] FCA 6 ; (2006) 226 ALR 749 [31] --- [37]), it seems to me that the substantive question between the parties is one which ought not to be resolved on a guillotine order in the circumstances as they present. 11 I note that the matter is, substantively, on the docket of Spender J, and no doubt his Honour has some familiarity with the background in the matter and the matter is to be reviewed by him on 19 October 2007. Nevertheless, it is clear from the respondent's position that there was a failure to comply with the orders within the timeframe nominated although it is contended there is otherwise substantial compliance, albeit it, out of time. As I say, I can see some force in the argument that there is a failure to comply within the order in more than trivial ways as to the substance of the orders. And, of course, it is common ground that the material was sent in whatever form its substance might be, very late on the evening of 2 October 2007. 12 However, having regard to the observations in Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 as to the importance of the attainment of justice between the parties, I am not persuaded that giving effect to a guillotine order as a final resolution of the matters of substance, ought to occur. Having said that, therefore, I propose to deal with the matter by making further directions. Some further directions have been foreshadowed by the applicant in the proceedings and I am content with those directions, subject to this qualification. The timeframe for each of the orders will be 4 pm on Friday, 12 October 2007. I will initial a draft of the orders, amended to read 12 October 2007. Order 3 will read, as to the date, Tuesday, 9 October 2007. 13 I am making a further guillotine order in terms of that draft order. I have expressed some reservations about a self-executing guillotine order but having regard to the argument today and the timeframe, it seems to me that some discipline needs to be injected into the resolution of the matter and if it be the case that there is non-compliance and the guillotine order takes effect with the result that it prescribes, then so be it. It seems to me that the respondent has had more than adequate time to deal with the underlying questions. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of a guillotine order consideration of compliance with the order consideration of whether the order ought to be varied practice and procedure |
The taxpayer applicants are respectively identified in these reasons as 'IEF' (for IEL Finance Limited), 'QTH' (for Queensland Trading & Holding Company Limited) and 'Spassked' (for Spassked Pty Limited). What was described by the taxpayer applicants as 'the underlying issue now in contest' was the deductibility of the interest expense incurred by Spassked under s 51(1) of the Income Tax Assessment Act 1936 (as amended) ('the Tax Act') in respect of the 1991, 1993 and 1994 fiscal years, being issues which they said 'could not previously have been decided'. I have referred to QTH, IEF and Spassked in these reasons together as 'taxpayer applicants' to avoid confusion, given that the Commissioner is the applicant in the present interlocutory proceedings for summary judgment. Each of QTH, IEF and Spassked was at all material times a wholly owned subsidiary of Industrial Equity Limited ('IEL'), a public company, and IEL in turn traced upwards corporately to the well known Adsteam, David Jones and Tooth & Co public companies. 2 The context to that so-called underlying issue was that between 1 December 1987 and 28 June 1990, Spassked borrowed funds from IEF at interest, and claimed that as a result of the interest incurred on those loans during the 1988 to 1994 years of income inclusively, it made losses for income tax purposes during those years of income. The losses so claimed were progressively transferred by Spassked under s 80G of the Tax Act to other members of the IEL group up to and including the 1998 fiscal year. The Commissioner issued assessments against Spassked and the transferees of the tax losses which disallowed the deductions for the interest originally claimed to have been incurred by it on those borrowings, and consequently reduced the amount of those losses to nil. A critical factor, from the Commissioner's perspective, was that the Federal Court, both at first instance ( Spassked Pty Ltd v Commissioner of Taxation (2003) 197 ALR 553) and on appeal ((2003) [2003] FCAFC 282 ; 136 FCR 441), has already determined the unavailability of those losses or outgoings sustained or undertaken for income tax purposes in the context of Spassked's challenge related to the fiscal year ended 30 June 1992. I will refer to those earlier proceedings at first instance and on appeal as the 'earlier concluded Spassked proceedings'. The presiding judge at first instance was Lindgren J, and those presiding judges on the Full Court appeal were Hill, Gyles and Lander JJ. The present proceedings were not commenced until after the conclusion of the appellate proceedings in favour of the Commissioner. The taxpayer applicants described that taxation issue thus resolved at the instance of Spassked in relation to the 1992 fiscal year as having involved 'a similar but essentially different question' to those raised by the present proceedings, and not having given rise to an estoppel, and not involving an abuse of process, contrary to the Commissioner's contentions. Relief by way of the orders and declarations now sought by the Commissioner is purportedly based upon either one or both of Order 20 rule 2 and Order 29 of the Federal Court Rules , and/or the inherent jurisdiction of the Court. As to Order 20 rule 2, the Commissioner indicated reliance solely on sub-rules 2(1)(b) and (c), upon the footing that the proceedings are an abuse of the processes of the Court or are otherwise frivolous or vexatious. The Commissioner acknowledged that the present application for summary dismissal of the proceedings now brought by IEF, QTH and Spassked is not intended to preclude the taxpayer applicants from contesting the quantum of additional or penalty tax imposed by the disputed notices of assessment. So much is said to involve very substantial issues for later determination. 4 The Commissioner's case for the summary relief sought against each of the taxpayer applicants was advanced on the footing of issue estoppel, Anshun estoppel and/or abuse of process, by reason of the outcome of the earlier concluded Spassked proceedings in this Court arising out of the disallowance of objections to the income tax assessment issued to Spassked in respect of the year of income ended 30 June 1992. The Commissioner acknowledged that there has never existed any agreement to the effect that the outcome of those earlier concluded Spassked proceedings relating to the 1992 year of income would bind the taxpayer applicants to an outcome in favour of the Commissioner in relation for instance to the present appeals. The taxpayer applicants deny the availability of any such summary relief. They point to the circumstance that objections of the taxpayer applicants respectively involved in relation to those further fiscal years 1991, 1993, 1994 and 1996 had not been determined by the Commissioner at the time of conclusion of the Spassked 1992 fiscal year, and assert that 'the issue for determination in each year is essentially different'. That assertion was based upon, or at least largely upon, what the taxpayer applicants assert to have been 'repeatedly held by the Privy Council', and upon 'factual differences between the 1992 fiscal year and those fiscal years presently in dispute, and moreover that 'save as to Spassked, the present applicants were not and could not have been party to the earlier proceedings', and therefore it cannot be said that the taxpayer applicants' claims should have been raised in the earlier proceedings if they were to be raised at all. For that reason I will set out the submissions in particular of the taxpayer applicants, in many instances by way of citation of the terminology actually used. In that regard, in each year of income involved, it was explained that interest was incurred in relation to the same set of loans by Spassked as borrower. Hence the present summary judgment applications were brought by the Commissioner upon the basis of abuse of process, and additionally or alternatively upon the basis of issue estoppel and Anshun estoppel. I have of course already identified the earlier concluded Spassked proceedings as related to the 1992 fiscal year, and which were resolved in favour of the Commissioner in the Federal Court, at first instance by Lindgren J on 14 February 2003, and on appeal by all members of a Full Federal Court comprising Hill, Gyles and Lander JJ on 8 December 2003. In the Full Court, the leading judgment was that of Hill and Lander JJ jointly, the outcome wherewith Gyles J agreed for relatively brief reasons of his own. A subsequent application by Spassked for leave to appeal to the High Court was dismissed. 8 Whether Spassked so 'understood' the significance of those earlier Spassked decisions to be that contended by the Commissioner was contested by the taxpayer applicants. So much would therefore need to be established by the Commissioner as a matter of inference arising in and from the events which happened in relation to the context to, the conduct of and the subsequent determination of the earlier concluded Spassked proceedings. The present appeals will resolve not only the issues of deductibility which they raise of amounts disallowed to the three taxpayers which are the appellants in them, but also the deductibility of losses claimed by the other companies in the IEL group. The present case of the Commissioner was that deductibility of interest incurred by Spassked on its IEF borrowings for each of the fiscal years 1988 to 1994 was resolved and determined against Spassked and in favour of the Commissioner in the earlier concluded Spassked proceedings, and accordingly the taxpayer applicants were seeking impermissibly to relitigate that issue. Although it was mutually accepted by the parties that there was no formal agreement that the outcome of the earlier concluded Spassked proceedings would operate or prevail as well in relation to other fiscal years of relevance in the present dispute, the Commissioner asserted that there existed at all material times a mutual understanding that so much would be the case. The Commissioner's contention, as I have foreshadowed to similar effect, was that '[i]t is clear from the manner in which it conducted the earlier proceedings that Spassked understood that the decision in those proceedings would determine the question of deductibility of the interest [commitment or liability] in all the years of income, including the years of income in these proceedings'. During the period of 1 December 1987 to 30 June 1992, interest expense was incurred by Spassked and accrued due to IEF on the borrowed amounts outstanding. These interest expenses were capitalised and debited in the books of IEF (and, conversely credited on the books Spassked) to the loan account, thereafter themselves, attracting further interest. The interest expenses incurred by Spassked during the Period were incurred for the purposes of furthering its present and prospect of income producing activities, being the acquisition and holding of shares in GIH in respect of which Spassked has received and anticipates receiving in the future, substantial assessable income in the form of dividends. The interest expenses incurred by Spassked and claimed as an allowable deduction in each of the years of income during the Period returned by IEF as assessable income in the same years of income and treated as such by the respondent. From that time, GIH was Spassked's creditor in place of IEF, but, unlike IEF, was not charging Spassked interest. It was on the total amount borrowed, $3,737,142,866 down to that date plus subsequently accrued and capitalised interest, that the 1992 interest of $888,165,526 must have been calculated. The parties proceeded on the basis that no distinction was to be drawn between Spassked's various borrowings from IEF and investments in GIH, or between the various investments by GIH in the Subcos, all over the years 1988-90, or between the seven annual amounts of capitalised interest for the years 1988-94... Accordingly, I need not distinguish between the various sums borrowed on which the interest accrued, or between the uses to which those sums were put. All those companies were members of the IEL Group. In the years of income 1988 to 1990 Spassked borrowed from IEF, on 10 occasions, amounts totalling $3,737,142,866 at interest, and invested in GIH without any return other than one unfranked dividend of $29,308,093 paid on 30 June 1990. Over the succeeding years of income 1991 to 1994 the amounts so borrowed were allowed to remain owing, accruing interest without any return other than one unfranked dividend of $14,654,046 paid on 8 October 1991. The interest for 1992 of $888,165,526 was one of seven annual amounts of capitalised interest totalling $3,272,715,111 which Spassked incurred to IEF over the years 1988 to 1994... on the borrowings of $3,737,142,866... Although it used nearly the whole of this amount... in subscribing for shares in GIH, Spassked received two comparatively miniscule dividends totalling only $43,962,139. The disproportion in the present case is of the kind that their Honours had in mind in the passage from Fletcher (his Honour referring thereby to Fletcher v Commissioner of Taxation [1991] HCA 42 ; (1991) 173 CLR 1 at [17] - [19] )). Hence the question whether interest was incurred in gaining or producing assessable income or in carrying on a business the purpose of which was the gaining of assessable income is a question which is required to be determined from year to year. The present case was argued and determined by the learned primary judge on the basis that the relevant facts were those which existed at the time the Spassked proposal was implemented. It seems to have been common ground between the parties that there was no relevant factual change in any relevant year of income. We are content to adopt the same course while noting that had there been a relevant factual change so that Spassked would no longer be precluded from deriving assessable income indefinitely the outcome would then be different. Further, it leads to the conclusion that any plan to wind up the structure and thus bring about the result that thereafter Spassked would derive assessable income was only fleetingly considered, if at all. Far from it being wrong in law to have regard to the evidence to which reference has already been made that evidence makes it clear that far from there being an "expectation" or even hope that the shares in Spassked would be income producing the proposal was designed to ensure and its implementation did ensure that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income. Rather the occasion of each outgoing of interest was to be found in those shares deliberately being non-income producing. Indeed, with the benefit of hindsight some may be seen as negligent or even profligate. The point may be made by considering the arm's length external borrowing by the IEL Group to make the corporate acquisitions in question. Some of those acquisitions might have been successful and some might have failed. In hindsight, some may have been doomed to failure. However there would be little doubt as to the deductibility of interest on all of those borrowings. All of the relevant arrangements were between companies with the same beneficial ownership. Many of the companies involved, including Spassked, had no external role at all. The arrangements involving those companies were inherently variable at the will of the ultimate board of directors. They do not reflect the exercise of business judgment in the relevant sense. Thus, the requisite connection or relationship between the outgoing and the earning of assessable income is not to be inferred but must be positively established. The trial judge found that that had not been done. I agree. Further, the inherently variable nature of the arrangements explains why the one error by the trial judge was of no consequence in the result. If I may be repetitive by reason of the complexity of the context to the present strike-out proceedings, those earlier Spassked proceedings, which concluded in consequence of Spassked's unsuccessful application for special leave to appeal to the High Court, related solely to the fiscal year ended 30 June 1992, whereas the issues the subject of the present proceedings concern the other fiscal years prior and following 1992 which I have identified. His Honour concluded however that the interest expense incurred by Spassked in respect of the year ended 30 June 1992 was not a loss or outgoing incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for any such purpose, and was thus not deductible under s 51(1) of the Tax Act, and as I have already further recorded, Spassked's appeal to a Full Federal Court from his Honour's decision at first instance was dismissed, as was the subsequent application made by Spassked to the High Court for special leave to appeal. Following the resolution of the earlier Spassked proceedings by the Federal Court in 2003 in relation to the 1992 income year, the Commissioner determined, by way of disallowance, the objections to tax of the other IEL Group companies involved in the corporate restructure and other inter-company arrangements, being partly the present taxpayer applicants, and hence did so in relation to years of income additional to the 1992 income year. It is in the context of the present proceedings that the taxpayer companies IEF, QTH and Spassked have sought to propound distinctions from the concluded Spassked proceedings, and to do so by reference to the circumstance that the latter related to the determination of assessable income concerning Spassked in relation to the 1992 fiscal year, whereas the present proceedings relate to the determination of assessable income in relation to different fiscal years. 20 At the forefront of the Commissioner's present case is the proposition that there exists sufficient commonality between the issues raised and determined in the earlier Spassked proceedings and the issues arising for determination in the present proceedings. The Commissioner's contention is that in the case of each fiscal year presently in issue, as well as in the case of the 1992 fiscal year, interest was incurred on the same set of borrowings, and the Federal Court has determined, at first instance and on appeal in relation to the 1992 fiscal year, that those borrowings were not made in the course or for the purpose of derivation of assessable income, and further that in none of the subject fiscal years presently in dispute did Spassked use the borrowed funds in any activity undertaken in the course or for the purpose of gaining or producing assessable income. As a consequence, the Commissioner submitted that the taxpayer applicants (being of course respondents to the present strike-out proceedings brought at the instance of the Commissioner) cannot succeed unless they are able to persuade the Court that the conclusions of the Federal Court in the earlier concluded Spassked proceedings were incorrect. 21 I should also record that the Commissioner provided, by way of annexures to written submissions in chief, first an eight page summary setting out facts pleaded in the taxpayer applicants' amended statements of facts, issues and contentions that were asserted to be at least largely the subject of findings of the primary judge and of the Full Court in the context of the earlier Spassked proceedings, and secondly, a seven page summary comprising what was described as facts pleaded by each taxpayer applicant inconsistently with or contrary to facts already found by the Federal Court in the earlier Spassked proceedings. The taxpayer applicants have not exposed any material misstatement in respect of that restatement of facts and findings. The Commissioner pointed out that each taxpayer applicant has pleaded that it was the intention of the Adsteam Group (and thus of course the IEL Group) that GIH would pay dividends to Spassked at the earliest possible time after the dividend trap affecting Spassked would be removed, but the Commissioner emphasised that the contention that there was an intention and expectation that GIH would ever pay dividends to Spassked was rejected 'squarely' by both the primary judge and by the Full Federal Court. Instead it was found, as a fact, so the Commissioner emphasised, that there was no plan or intention to remove the dividend trap in relation to Spassked. The Commissioner emphasised moreover that the explanation provided by Mr Ryan, an executive of Bankers Trust, for the non-payment of dividends to Spassked, as to 'potential and threatened tax liabilities', was rejected by this Court in the earlier Spassked proceedings, and further that nowhere did Mr Ryan allege in his affidavit that the intentions and expectations of the controllers of the Adsteam Group should be attributed to IEL, Spassked and GIH. Nor did that allegation, so the Commissioner further pointed out, appear in the affidavits of Mr Daniels (whom I have earlier identified), filed in the earlier concluded Spassked proceedings. Moreover the Commissioner emphasised that the primary judge found that so long as Spassked was incurring an interest liability to IEF, or had undistributed profits attributable to it, Spassked would not receive dividends from GIH. Yet those losses, his Honour further found, continued to be utilized within the IEL group until 1998. 22 In the result, the taxpayer applicants as respondents to the present strike-out proceedings were required to address a number of findings at first instance, and confirmed by the Full Court on appeal, made in the context of resolution of the evidentiary issues the subject of the earlier concluded Spassked proceedings, being findings which bore directly as well as indirectly on the case raised and pleaded by the taxpayer applicants in the present proceedings. The taxpayer applicants were thus confronted with the present case for summary judgment framed on the basis of the doctrines as to issue estoppel, Anshun estoppel and abuse of process. To meet that case, the taxpayer applicants undertook extensive recourse in particular to authority of the Privy Council and the House of Lords for what was contended to constitute a long established exclusion of those doctrines operation in circumstances such as here involved. Unavoidably these reasons have rendered it to be expedient to extract a great deal of judicial dicta in order to adequately portray the thrust of the authorities respectively relied upon by both parties. So much may be readily accepted. ... [S]ome of these expressions [of the test] occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. 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 Commissioner's case was however that the previous proceedings, contested 'all the way' by Spassked in relation to the 1992 year income year to the stage of its unsuccessful application for special leave to appeal to the High Court, were mutually understood to resolve all outstanding tax disputes such as the foregoing involving IEL subsidiaries, as evident from the context thereto, and hence the Commissioner's present strike-out application upon the footing of abuse of process. Implicitly, so the taxpayer applicants' case ran, such merits would or may well produce a different result to that sustained by Spassked (along with IEL and Stanley Park Pty Ltd as co-applicants), in the earlier Spassked proceedings in respect of the 1992 fiscal year. However, precisely what constituted such 'merits' was never seemingly identified in substance or at all, much less particularised in detail, by way of resistance to the Commissioner's present strike-out application, other than bottom line of the taxpayer applicants as to different fiscal years of income to the 1992 year of income. 27 At the outset of their submissions in opposition to the present strike-out application, the taxpayer applicants cited Coke upon Littleton, (at s 365(b)), for the threshold observation that estoppels may be characterised as ' odious ', being an authority described by the Commissioner understandably as 'ancient'. The taxpayer applicants also cited Jackson v Goldsmith [1950] HCA 22 ; (1950) 81 CLR 446 at 458 (per McTiernan J) for the proposition that, estoppels are viewed ' unfavourably by the Courts, as having the effect of excluding the truth ', though in a context where his Honour was seeking only to establish the need for an asserted estoppel to be based on very clear and precise evidentiary material. The taxpayer applicants asserted moreover that the Court's power to strike out is discretionary in its exercise, and is to be undertaken with 'great caution', citing Effem Foods Pty Ltd v Trawl Industries of Australia Pty Limited (1993) 43 FCR 510 at 532 (per Burchett J as a member of a Full Court), where his Honour was speaking of the exercise of 'discretion to stay proceedings as an abuse of the process of the Court, whether on the ground of [ res judicata ] or on any other ground'. In the present strike-out application of the Commissioner, the Commissioner did not, to my understanding, place reliance on the operation of res judicata in the context of Australian general law. At 413-414, his Honour made the threshold observation that ' ... the doctrine of privity in interest... operates in the same way upon the doctrines of cause of action estoppel and issue estoppel... [t]he basic requirement of a privy in interest [being] that the privy must claim "under or through" the person to whom he is said to be a privy... [t[he necessary identity in interest may arise from a successive relationship in a temporal sense..., when finding the necessary privity, in a succussive or mutual relationship, the courts have looked to legal rather than economic indicia as the criterion of operation of the privity doctrine '. One example to which his Honour referred (at 414) was of holders of successive interests in the same fund, notwithstanding that they had become members of the fund subsequent to dismissal of proceedings brought by other beneficiaries. His Honour found that the applicant for relief in Effem ' ... was not claiming under or in virtue of any legal right of the other applicants in the present proceedings '. The taxpayer applicants' contended that there was an absence of satisfaction in the circumstances of this case of the requirement of privity of interest in relation to the respective claims of IEF and QTH on the one hand and that of Spassked on the other, implicitly notwithstanding that each was a wholly owned subsidiary of IEL, and moreover traced their ultimate corporate membership to the Adsteam Group. In any event, the taxpayer applicants contended in written submissions in reply as 'not disputed' that '[i]f Spassked and IEL are not estopped from pursuing appeals in other years that their privies cannot be estopped', but whether the converse of that proposition is true may be another matter, depending upon the scope of the doctrinal notions of privy and privity of interest. 30 The Commissioner contended that for the taxpayer applicants to seek to have the Court redetermine the complex issues concerning the purpose of the subject borrowings, and as to whether the borrowed funds were used in an activity or activities carried on by the taxpayer applicants in the course of gaining or producing assessable income, being issues said by the Commissioner to be already resolved adversely to Spassked in the now concluded proceedings brought by Spassked against the Commissioner, albeit resolved specifically in the context of proceedings related to the 1992 fiscal year, exemplified an abuse of process. The Commissioner moreover 'demurred' to what was described as the taxpayer applicants '... seeking impermissibly to relitigate the issue' as to deductibility of the interest expenses incurred by Spassked on the IEF loans in relation to years of income additional to 1992, contending that issue as having been 'decided against Spassked and in favour of the [Commissioner] in the earlier Spassked proceedings ...', in the context specifically of the 1992 year of income. 31 Primary reliance was placed by the Commissioner, in support of the strike-out application, upon the broad basis of breach or abuse of process. As Lord Hoffman said in Arthur JS Hall & Co v Simons [2000] UKHL 38 ; [2000] 3 WLR 543 at 572, the underlying policies are that a defendant should not be troubled twice for the same reason and that there is "a general public interest in the same issue not being litigated over again". The Commissioner further asserted that Spassked had represented to the Full Federal Court, in the course of the Spassked appeal, that the issue there involved the subject of whether interest incurred by Spassked on its borrowings from IEF in the period of time between 1988 and 1994 was deductible. 33 Moreover in upholding the decision of Lindgren J in Spassked at first instance, the Commissioner also emphasised that the joint reasons for judgment of Hill and Lander JJ in the Full Court had concluded at [113] that the occasion of each outgoing of interest was to be found in those shares being deliberately non income producing. If I may be repetitive, their Honours there explained that ' ... the evidence ... makes it clear that far from there being an "expectation" or even hope that the shares in Spassked would be income producing, the proposal was designed to ensure and its implementation did ensure that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income '. Those primary tax assessments disallowed any entitlement of IEF and QTH to deductions under s 80G of the Tax Act for losses transferred to each of them by Spassked in relation to the years of income ended 30 June 1991, 1993 and 1996, and thereby disallowed any entitlement of Spassked to deductions under s 51(1) of the Tax Act in relation to the respective years of income ended 30 June 1991, 1993 and 1994, and in so doing imposed substantial penalties. 37 Notwithstanding the confinement of the earlier Spassked litigation at first instance and in the Full Court to the deductibility of interest on Spassked's borrowings from IEF in relation to the fiscal year ended 30 June 1992, the Commissioner advanced the present strike-out application related to the remaining fiscal years in dispute, as I have foreshadowed, upon the footing that such preceding litigation was resolved against Spassked, and thus of course in favour in favour of the Commissioner, in relation to the so-called broader issue as to deductibility of interest on Spassked's loans from IEF for the fiscal years 1988 to 1994 inclusively, and that as a consequence, the taxpayer applicants were by their amended statement of facts issues and contentions seeking impermissibly to relitigate that comprehensive issue. The basis for that case of the Commissioner was asserted to be, as I have foreshadowed, that '[i]n the earlier Spassked proceedings, Spassked, IEL and Stanley Park presented their case before the Full Court and before the primary judge on the basis that the resolution of the proceedings would determine the deductibility of the interest incurred by Spassked on the IEF loans for each of the 1988 to 1994 years of income', and further that in the context of those earlier proceedings 'Spassked sought findings that the interest was so deductible'. I was informed that similar circumstances also prevailed in each of the six years ended 30 June 1988, 1989, 1990, 1991, 1993 and 1994', and further at [193] that '[t]he parties proceeded on the basis that no distinction was to be drawn between Spassked's various borrowings from IEF and investments in GIH, or between the various investments by GIH in the Subcos, all over the years 1988-1990 or between the seven annual amounts of capitalised interest for the years 1988-1994...' , and further that '[a]ccordingly, I need not distinguish between the various sums borrowed on which the interest accrued, or between the uses to which those sums were put' . The reference to 'Subcos' was to investment subsidiaries, as I have earlier indicated, the involvement of which is more conveniently illustrated in the diagram to the reasons for judgment of the Full Federal Court. To not dissimilar effect were the observations made in the course of the joint judgment of Hill and Lander JJ of the Full Court in Spassked, at [4] and subsequently at [77], each of which I have already extracted in these reasons. Those observations were reflected in the conclusions of the joint judgment in the Full Court which I have also earlier extracted, which may be seen to focus upon expressions such as 'in any year of income', and 'in all the years of income in question' , and further upon the theme for instance in [113], which I have also extracted but which bears repetition, that 'the proposal was designed to ensure and its implementation did ensure that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income [but that] [r]ather the occasion of each outgoing of interest was to be found in those shares deliberately being non income producing' . 40 What I have thus far recorded or addressed may be described as embracing the broadly asserted foundations for the Commissioner's strike-out application. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order ... the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation'. In fiscal contexts such as those arising for resolution in the present principal proceedings, the facts the subject of those findings to my understanding were fundamental to the decision in the earlier concluded Spassked proceedings. Nevertheless the taxpayer applicants referred at length to authoritative dicta submitted to be inconsistent with that preliminary observation on my part, and which I will later review. I should record, at this threshold stage of examination of authority, that the theme of the doctrine of issue estoppel lies in the public interest in the finality of litigation, and the concern with injustice inherent in permitting a litigant to be twice vexed with the same claim. The present circumstances tend to reflect a factor of public interest here conceivably involved, given the considerable length of time and therefore the amount of cost as to what would eventuate by way of largely repetitive proceedings of similar length and factual complexity to that of the earlier concluded Spassked litigation, where the substance of the proceedings would be likely to be essentially the same. So much may be reasonably said of the IEF/QTH/Spassked proceedings presently on foot, in the light of the context of the earlier concluded Spassked proceedings, albeit in the present case in relation to different, though nevertheless closely proximate, fiscal years, and perhaps the additional factor of taxpayer applicants additional to Spassked. Moreover in the light of what I have already recorded from dictum of Lindgren J at first instance and subsequently from dicta of the Full Court joint judgment of Hill and Lander JJ, in the context of course of the earlier concluded Spassked litigation, the thrust of the Commissioner's strike-out case gains significant momentum. 42 The doctrine of issue estoppel has been applied in what has been described as a revenue context, as the Commissioner rightly contended. In Hoysted v Federal Commissioner of Taxation [1925] HCA 51 ; (1925) 37 CLR 290 (to which reference appears by way of the English authorised report in the dictum I have extracted above from Blair v Curran ), and upon which the Commissioner placed reliance here, the Commissioner was found by the Privy Council to be estopped from asserting that trustees of a deceased estate comprising mainly realty were disentitled to certain concessional deductions as joint owners of that realty under certain land tax legislation. The High Court had earlier held by majority (Knox CJ and Starke J, Higgins J dissenting) that the Commissioner was not estopped from contending that certain beneficiaries of that estate had not become joint owners of the realty for land tax purposes, thereby adding significantly to the land tax concessional entitlements of the deceased estate taxpayer. Prior to that finding, there had been several appellate proceedings which need not be recorded. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted, litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle, namely, that of setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which has not been taken. The same principle of setting parties' rights to rest applies, and estoppel occurs. The difficulty arising in the context of complex fiscal litigation such as the present is isolating what may be merely 'building blocks' . Translating to annual revenue assessments where an evidentiary finding is made in relation to conduct or events antecedent to a fiscal year the subject of an assessment in dispute, it may be asked when that finding would be considered fundamental to decision-making in relation to that fiscal year. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time. The difficulty is in defining in any particular case the notion of a ' whole case ', and in identification of ' every point which properly belonged to the subject of litigation'. Henderson did not of course involve a fiscal issue arising in the administrative context of annual assessment. Furthermore the principle enunciated in Henderson was expressed in terms of res judicata , upon which doctrine the Commissioner has however withheld from reliance in the context of the present strike-out proceedings, though in that regard, the doctrine of res judicata is more broadly conceived and has received a broader application in United Kingdom contexts. Moreover in income tax contexts, traditional pleadings are not usually implemented; in that regard in Murphy v Abi-Saab (1995) 37 NSWLR 280 at 287, it was observed by Gleeson CJ (with whose reasons for judgment Kirby P and Rolfe AJA agreed) that '... an issue of fact or law may be easier to decide where there are pleadings than where... there was simply a summons' . In any event, I think that in substance and in reality, IEL as the intermediate and in the present context the effectively controlling parent company did cause its subsidiary Spassked to bring forward the 'whole case' of IEL's relevant subsidiaries (ie Spassked, IEF and QTH). This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all... It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Nevertheless Spassked did not submit to the Federal Court that the events and circumstances of the fiscal years prior or subsequent to 1992, that is to say, extending from 1988 to 1994, were distinguishable in operation and significance from the intervening 1992 fiscal year. Instead the circumstances of those prior and subsequent fiscal years appear to have been regarded by Spassked, as well as the Commissioner, as throwing light relevantly and significantly upon the fiscal issues arising in the context of resolution of that earlier litigation, albeit that each had controversially different cases to present as to the implications of any such circumstances. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings eg expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few'. It is appropriate that I address that less relatively complex issue for the most part in my final segment of conclusions to these reasons for judgment. I will identify at least the majority of the submissions of the taxpayer applicants in the present segment of my reasons for judgment, but will not do so exhaustively, since certain of the submissions of the taxpayer applicants are conveniently addressed in the course of my lengthy segment of conclusions. The essence of response of the taxpayer applicants at the outset was to the effect that what was determined by the Federal Court in the earlier Spassked proceedings, at first instance and on the subsequent appeal to the Full Court, related solely to the 1992 fiscal year, and in the light of the weight of high authority of the United Kingdom invoked by the taxpayer applicants, and its subsequent recognition in Australia, did not and could not in law thereby create an estoppel. What was described as the cornerstone of the Commissioner's submissions in relation to issue estoppel was an assertion that the doctrine of issue estoppel applies to so-called 'revenue proceedings', being a description said to misstate the law, and to be contrary to 'a long line of authority'. I will later examine in detail authority related to or conceivably related to that question. I was referred to the material filed in Court in the context of those earlier concluded Spassked proceedings, and to matters stated to the Court in the same context by senior counsel for Spassked, at first instance and on appeal, to the effect that the central issue in those proceedings related to the 1992 fiscal year alone. This year concerns only the 1992 year. After the Full Court delivered its judgment, proceedings were commenced in the Federal Court by other members of the group raising the same issue in relation to other years. As I understand it, the 1991 year, the 1994 year and, I think, the 1997 year are presently before the Full Court. I say the 1997 year because Spassked continued to transfer out tax losses right through until 1998. In those proceedings, the taxpayers contend that the other years have factual differences which mean the result in this case is not applicable. Those matters, as I understand, have now been set down for a three week trial before Justice Conti next September on the basis that there are factual differences'. As I have foreshadowed, the taxpayer applicants submitted that the issue the subject of the earlier concluded Spassked proceedings was limited to the deductibility of interest in respect of the 1992 fiscal year. Indeed that could only have been the case at that stage, so the taxpayer applicants pointed out, given that by the time of that application for special leave, '...the Commissioner had not determined any objections other than those made by the three taxpayers in the earlier Spassked proceedings against their assessments for 1992', and accordingly by then 'no other company in the IEL Group could have commenced proceedings under Part IVC of the Administration Act or become a party to the earlier Spassked proceedings' (those three taxpayers were of course Spassked, Stanley Park Pty Ltd and IEL, as I have earlier recorded). 52 The taxpayer applicants' case in the present proceedings therefore was that it is enough for the taxpayer applicants to point to the circumstance, and the implications thereof according to law, that any such perception that the earlier concluded Spassked proceedings was of the nature of a test case based on the 1992 fiscal year could not elevate the decision to cover matters which were not before the Court as part of the proceedings, referring thereby to any significance of the earlier proceedings in relation to the 1991, 1993, 1994 and 1996 fiscal years. There has not been distilled however by the taxpayer applicants any materially differentiating factor involved in relation to those other fiscal years, other than the per se factor they propound as to a different fiscal year (ie 1992). In making that observation, I do not overlook the observation of Hill and Lander JJ in the Spassked appeal (at [77]), which I have earlier extracted, that ' [i]ncome tax is an annual tax [and] [h]ence the question whether interest was incurred in gaining or producing assessable income or in carrying on a business the purpose of which was the gaining of assessable income is a question which is required to be determined from year to year '. What is not to be also overlooked, in my opinion, are the findings of the Full Court on appeal, and the significance thereof, concerning the events and circumstances of what were the continuing business operations of the IEL corporate group both antecedent to and following upon the 1992 fiscal year, in line and consistently with those of the 1992 fiscal year, and concerning relevantly IEF and QTH as well as Spassked as members of the IEL corporate group. 53 The taxpayer applicants maintained nevertheless the contention that identification of the issue before the Federal Court in the earlier concluded Spassked proceedings, relating of course to the 1992 fiscal year, was 'fundamental' to determining the existence and scope of operation for instance of the operation of issue estoppel, since the ultimate issue before the Court for resolution in the earlier concluded Spassked proceedings was confined in law to deductibility of interest at the instance of Spassked alone, and in relation to the 1992 year of income alone. The taxpayer applicants maintained that issue estoppel may only be raised by or applied against parties who were in controversy at the time when an issue being subsequently pursued was first determined, whether in their favour or adversely to them (as the case may be), and further that if a moving party was not involved in any earlier litigation of that issue, either because it was not a matter the subject of issue between that moving party and the other party to the proceedings, or because the moving party had not been a party at all, then that moving party is not affected by an estoppel, and nor can an estoppel be raised against it. If a party was not involved in the litigation of that issue, either because it was not an issue between him and another party to the proceedings, or because he was not a party at all to the proceedings at the time of resolution, then he is not affected by nor can he raise an estoppel. Likewise his presence initially or subsequently can not affect the right of other parties to raise or rely upon issue estoppel as between themselves. If the contrary was the case, the public interest in not having the same matters relitigated could with ease be bypassed. In explanation or furtherance of that contention, it was said by the taxpayer applicants that the decisions on income tax, land tax and local government rating assessments constitute exceptions, in that a dispute which is determined by curial decision in respect of one year of taxation is limited to one subject only, being in the case for instance of income tax the amount of the taxable income and the tax payable by the taxpayer in respect of that fiscal year. The taxpayer applicants contended further that because what is decided in disputes about income tax, as well about land tax and other annual fiscal or rating assessments, is inherently limited in that way, even the determination of something essential to the conclusion reached as to the proper amount of assessment for a fiscal year in question is not to be regarded as creating an estoppel for the purposes of an assessment for a different proximate year, which would usually relate to a later year (though not always, as in the case of the 1991 year here in dispute). In support of those broadly framed submissions, reliance was placed by the taxpayer applicants upon several authorities of the Privy Council and the House of Lords, and which were said to stand inconsistently with earlier Privy Council authority, being that of course of Hoysted . 55 One of the later authorities principally relied on by the taxpayer applicants, which may be conveniently next addressed for reasons that will shortly emerge, was the decision of the Privy Council in Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax, Colombo [1961] AC 584. The difference in spelling of the appellant's surname from that of the designation of the Trust appears incidentally in the report. The conclusion was there reached that the Commissioner of Income Tax of Ceylon was not estopped by a decision of the board of review constituted under the Income Tax Ordinance of Ceylon, being a decision made in respect of the fiscal year 1949-1950, from challenging the trustees' claim to exemption from income tax for subsequent fiscal years and in particular the 1950-1951 year, upon the footing that an issue of liability to income tax for one year was to be treated as inherently different from that of liability for another year, even though there might appear to be similarity or identity in the questions of law which they respectively yield. Hence the finding by the Privy Council in that income tax context was that the principle of res judicata did not apply, albeit that both the terms of the trust and the relevant law were precisely the same in relation to the two fiscal years addressed. It is only the amount of that assessable income that is concluded by an assessment or by a decision on an appeal against it ... In the present circumstances, perhaps by way of contrast, the taxpayer's challenge to the previous litigation originated in the Federal Court, being of course a superior court of record with all the implications thereby entailed, for instance, as to prior interlocutory processes, and the admissibility and taking of evidence did not originate in an administrative or quasi-administrative tribunal exercising at least a more limited judicial function. That may be thought in my opinion to involve one distinction of relevance. The critical test is not the bare issue whether or not such a board exercises judicial power ... What is important here is that the Board of Review is a tribunal set up under the Income Tax Ordinance for the purpose of deciding income tax appeals at a certain stage of their prosecution, and that decisions given with regard to such appeals are effective only within the limited jurisdiction that the Ordinance creates for all tribunals that deal with the matter of an appeal. All such appeals remain in one sense a part of the process of assessment since all the tribunals, including the Supreme Court, have independent power to increase or reduce the assessment under appeal. While, therefore, it is unexceptionable to say that the Board of Review when exercising its powers ... is acting in a sense judicially, that the dispute which it has to determine is at any rate somewhat analogous to a lis inter partes and that the assessor who made the assessment or some other representative of the Commissioner... resembles a party hostile to the appellant, those considerations are not those that are critical to the issue of estoppel'. Nor is readily comparable the limited jurisdiction exercisable by the present Administrative Appeals Tribunal. The process of review invoked by Spassked could have, but did not of course, involve in the first instance or at all recourse to that Tribunal, but rather to a single justice of the Federal Court as I have earlier indicated. Broken Hill related to the assessment of the unimproved capital value of a producing mine for the purpose of annual assessment of municipal council rates pursuant to s 153(3) of the Local Government Act 1919 (NSW), the assessment having been made on an output basis equal to 20% of the average annual saleable value of ore produced from the land over the three years preceding the assessable year. The decision of the High Court related to a valuation and a liability to tax in a previous year, and no doubt as regards that year the decision could not be disputed. The present case relates to a new question, namely, the valuation for a different year and the liability for that year. It is not eadem quaestio , and therefore the principle of res judicata cannot apply. Given the inherently changing nature of a valuation of realty for rating purposes, even over one year or so and in particular in relation to a mine in production, the juridical basis for that approach may be perhaps more comprehensible. Once again, the reference to res judicata above, and not issue estoppel, may also be observed. It underlines the point that it is not the status of the tribunal itself, judicial or administrative, that forms the determining element for estoppel in cases of this kind but the limited nature of the question that is within the tribunal's jurisdiction. The judgment of the High Court that had been given in the earlier year was explicitly directed to the construction of a particular section of the rating Act and to the correct measurement of the liability in the light of that construction. Precisely the same point arose in the later year and was ultimately decided by this Board in a sense contrary to that which had previously been adopted. In their Lordships' opinion it is not possible to distinguish the principle of the Broken Hill decision from that which should prevail in the present case on any such ground as that here the earlier decision related to the taxpayer's "status" as an exempt person while in the Broken Hill case the decision "merely" related to the correct amount of the assessment; for in truth, as has been explained, in all these cases which arise under income tax or rating appeal procedure the decision is essentially as to the correct amount (if any) of the assessment, and in the one case as much as in the other the decision was based upon a question of law, the proper interpretation of one of the provisions of the taxing Act. It may be that the principles applied in these cases form a somewhat anomalous branch of the general law of estoppel per res judicatam and are not easily derived from or transferred to other branches of litigation in which such estoppels have to be considered; but in their Lordships' opinion they are well established in their own field, and it is not by any means to be assumed that the result is one that should be regretted in the public interest'. As I have also mentioned, the Privy Council decision in Broken Hill was given on 10 November 1925, yet no reference was made thereto in the Privy Council's reasons for decision in Hoysted published 37 days later. It is not possible to explain why the matter was dealt with in this way; and it is fair to note that in the majority judgment of the High Court, which was reversed on the appeal, there is a reference, though a passing one, to the point of "eadem quaestio". In the result, however, the attention of the Board in delivering its opinion was wholly occupied with a discussion of what is quite a different issue in connection with estoppel, whether there can in law be estoppel per rem judicatam in respect of an issue of law which, though fundamental to the issue, has been conceded and not argued in an earlier proceeding. So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case; and to follow it would involve preferring a decision in which the particular point was either assumed without argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly raised and explicitly determined. The Commissioner of Taxation had disallowed the deductions and the trustees had lodged objections, which were treated as appeals and transmitted to the High Court. The trustees' objections were upheld by the High Court and the appeal allowed. Subsequently on an appeal by the trustees in respect of an adverse assessment which issued for the ensuing fiscal year, the Privy Council reversed what had been a majority decision of the High Court, and held that the Commissioner was estopped from contending that the beneficiaries were not joint owners of the land. Although as I have recorded already, no specific reference was made by the Privy Council in Hoysted to its earlier, albeit then very recent, decision in Broken Hill, the Privy Council having been differently constituted in relation to the two proximately resolved appeals, the reasoning of the Privy Council in Hoysted indicated the undertaking of a wide survey of authority having been nevertheless the subject of submissions . I have already extracted the dictum of Dixon J in Blair v Curran which cited with apparent approval two passages from what appears in the reasons for decision of the Privy Council in Hoysted . I have also already extracted the estoppel finding made by the Privy Council at 299. 61 I have encountered difficulty with the description of the issue in Hoysted , appearing in the Privy Council's reasons in Caffoor , as involving a ' question of estoppels in respect of successive years of tax assessment', in contrast to the circumstances underpinning the issue in Broken Hill which might more readily bear that description, in that Hoysted was not concerned with realty valuations per se but the construction of fiscal legislation relating to concessional rates referrable to the extent of division of co-ownership by beneficiaries of a deceased estate. Broken Hill involved the ascertainment of the annual saleable value of a mining property to a mine owner based on iron ore product derived during the three year annual average last preceding the municipal rating year. By way of apparent contrast, the circumstance to which the passage in Hoysted was directed was the recommencement of litigation upon a different assumption of fact fundamental to an existing decision and the legal quality of that fact, and by reference to ' new views... [entertained] of the law of the case', or 'new versions... as to what should be a proper apprehension... of the legal result... of the construction of the documents or the weight of certain circumstances...' , (to repeat the dicta of the Privy Council in Hoysted at 299), such fact not being in the nature of an annual recurring value requiring annual recalculation on change of value in the peculiar context I have earlier distilled. As I have foreshadowed, Hoysted related in particular to the circumstance whether or not the juridical status beneficiaries to a deceased estate, in the events which had evolved since the death of the former owner testator, were joint owners for the purpose of operation of land tax legislation. The circumstance merely that land tax was assessable annually was therefore not per se the critical factor to the ratio of the decision, as a matter of substance and reality. 62 The taxpayer applicants drew attention, next in sequence of their submissions, to Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21 ; (1987) 164 CLR 502, in the context of their case seemingly to the effect that the doctrine of issue estoppel has no application in principle in relation to revenue proceedings, or referrable at least to periodic assessments or levies. The context to that litigation was that the Commissioner had brought an action for payment of income tax due by a taxpayer for specified years of income, but had caused judgment to be entered for an amount substantially less than that actually due, being an amount involving the same numerals per se, yet with one decimal point being placed out of sequence apparently by inadvertence, thereby purportedly seeking to enforce a substantially lesser impost in favour of the taxpayer. The Commissioner did not seek to have the judgment vacated, or to explain precisely how that evident mistake had occurred, but instead brought an action for recovery of the balance of the tax assessment the subject of the obvious shortfall. The High Court held that the second action was not maintainable by the Commissioner by reason that the cause of action had become merged in the earlier judgment, which the Commissioner had chosen not to impeach on account of mistake. It was observed in the joint judgment of Deane, Toohey and Gaudron JJ in Chamberlain at 510 that '... it may well be that no conduct on the part of the Commissioner can operate as an estoppel against the operation of the Act' , referring in that regard to the well known principle enunciated in Federal Commissioner v Wade [1951] HCA 66 ; (1951) 84 CLR 105 at 117, being a principle not here of course in dispute. Nevertheless the broad but brief proposition that '... the Commissioner is not bound by a determination made in respect of an assessment for one year, so far as other years are concerned...' was described in that joint judgment at 510 'as equally true' , Caffoor at 598-601 being cited generally in relation to that brief assertion. There was however no other discussion of that bare proposition, and in particular as to the reach thereof. There is something to be said for the view that such observation in Chamberlain was obiter, the circumstances giving rise to the issue in Chamberlain being conceptually distant from contexts at least such as here involved. Significant to that observation is the fact that no reference was made to Caffoor in the reasons for judgment in Chamberlain of both Brennan J and Dawson J . No reference was made in any of the Chamberlain judgments to Broken Hill or Hoysted or Hope . 63 The Commissioner's submission in relation to Chamberlain was to point out that in the earlier concluded Spassked proceedings, Spassked had sought and obtained a determination of facts and issues which necessarily resolved the liability of the taxpayer applicants to pay the primary tax assessed to them, and that the Federal Court's jurisdiction to prevent a re-litigation of those issues was confirmed by the Full Federal Court in its decision upon the initial appeal ( Chamberlain v Commissioner of Taxation (1991) 28 FCR 21), where Davies, Ryan and Foster JJ at [26] purportedly applied the doctrine of estoppel as exemplified in Hoysted , and thereby prevented the Commissioner of Taxation from seeking to re-litigate in the Federal Court upon the basis of a mistaken assumption upon which a consent judgment had been entered earlier in the Supreme Court. Incidentally, in the course of the reasons for judgment of Deane, Toohey and Gaudron in Chamberlain at 509, there was reproduced the first sentence of the dictum in Henderson I have earlier extracted, it being explained that ' Henderson was not concerned with res judicata in its strict sense but rather with its implications when an issue is sought to be raised which could and should have been litigated in the earlier proceedings ', referring thereby to what was established by the High Court's decision in Anshun. I would add for completeness that the success of the taxpayer in the High Court in Chamberlain was seemingly treated in any event as based on res judicata : see the joint reasons for judgment of Deane, Toohey and Gaudron at 507, and also the reasons of Brennan J at 504 and of Dawson J at 512. However the subsequent proceedings brought by the Commissioner in the Federal Court, also resolved as above indicated in favour of the taxpayer, turned on Anshun estoppel, by reason of the omission of the Commissioner to raise the issue of mistake in the earlier High Court proceedings. In the result I do not think that Chamberlain provides the assistance, at any rate decisively, for which the taxpayer applicants' case for denial of the operation of an estoppel in the present circumstances was propounded. On the other hand and for what it may matter, I think that the taxpayer applicants were correct in their rejection of the characterisation of Chamberlain as 'revenue proceedings', in the sense of involving an issue as to liability to tax and/or as to the assessable quantification of that liability as such. The system of rating involves certain considerations that are special to itself. Its nearest analogy is with the system of annual personal taxation. With regard to both one has to begin by recognising that there is high and frequent authority for the proposition that it is not in the nature of a decision given on one rate or tax that it should settle anything more than the bare issue of that one liability and that, consequently, it cannot constitute an estoppel when a new issue of liability to a succeeding year's rate or tax comes up for adjudication. The question of this liability is a "new question". It is not " eadem quaestio" . The "cause of action is different". "The subject-matter is a different year's tax and a different year's assessment and is not the same as the subject-matter of the previous ruling". All these things have been said with reference to rates or taxes, and the list of decisions that recognise or enforce the principle is a long one...'. The authorities cited thereafter by Lord Radcliffe at 562-563 included Broken Hill . Personally, I do not want to, because I think that, on the whole, it is more in the public interest that tax and rate assessments should not be artificially encumbered with estoppels (I am not speaking, of course, of the effect of legal decisions establishing the law, which is quite a different matter), even though in the result some expectations may be frustrated and some time wasted. What doubtless troubles the Commissioner in the present circumstances, at least for one matter, is the substantial cost and delay in resolution of protracted litigation, similar to that experienced in the earlier concluded Spassked proceedings, by what would necessarily involve a re-run and subsequent re-appraisal of much of the evidence tendered in those earlier concluded proceedings. The unanimous findings of the Law Lords occurred in the context of a property valuation list which became the attention of the decision. That list had come to the end of its statutory life and a new 'quinquennial valuation' list was required to be brought into existence, even though it was apparently shown, or else mutually agreed, that there had been no change of circumstances. The jurisdiction of the local valuation court there involved was significantly limited, as in the case for instance in Caffoor, its function involving decision-making upon the assessment and liability of a ratepayer for a terminable period, being circumstances bearing insignificant analogy to that of the jurisdiction of the Federal Court exercisable on income tax appeals, as exemplified by the earlier concluded Spassked proceedings relating to the 1992 fiscal year. There are legal contexts, in trespass or recurring claims for rent, for example, in which much of the same might be said and yet it is not impossible for an estoppel to arise. The reason why, when you are dealing with rates and taxes, the difference of subject-matter is treated as being so important seems to lie in two considerations which, as I read the authorities, are peculiar to their particular field. It is no reflection upon the responsible work carried out by the local valuation courts if I say that they are not the natural repositories of the right to decide for good such legal issues as the interpretation of statutes or general legal questions affecting ratepayers: and to hold that, subject to appeal, such decisions are to be treated as conclusive for all time would be, in my opinion, to impose a needlessly heavy burden upon the administration of rating. Lord Radcliffe then proceeded to contrast, if not wholly distinguish, the implications of the Privy Council's decision in Hoysted, pointing out (also at 566) that '[t]he estoppel related to a question as to the nature of legal rights in property and the interpretation of the taxing statute with regard to them' , and that Hoysted was therefore '... useless to illuminate the only point which is now before this House, [being] the effect on a succeeding valuation list of a decision given with regard to an earlier [decision]', and further (at 566) that '[a]t no stage of the proceedings, so far as appears, was the argument put forward on behalf of the commissioner of taxation that the assessment for 1920-21 was a new subject-matter in relation to the assessment for 1918-1919: nor is the point noticed in the opinion of the Judicial Committee delivered by Lord Shaw' . It is to be noted, however, that the decision that was set up as an estoppel was a decision of the highest legal tribunal in Australia, the High Court, arrived at by the full court upon a case stated for their opinion by a single judge of the High Court to whom there lay an appeal from the decision of the commissioner of taxation. Any objection, therefore, which was based on difference of subject-matter between the taxes for the respective years, would have to meet the puzzling question whether for the purposes of estoppel the jurisdiction of the High Court in adjudicating upon points of law arising in tax proceedings is not wider and more comprehensive than the jurisdiction of the original assessing tribunal. It is true that that aspect does not seem to have had any weight attached to it in the other decision of the Judicial Committee of the same year, the Broken Hill case. But there the point did not call for, or receive, any full attention. I say nothing more about this. It is not the point before us and, if it ever arises, it will need separate consideration. It cannot be said for instance of the Federal Court that ' ... it is not a court of competent jurisdiction to decide general questions of law with that finality which is needed to set up the estoppel... that arises in certain contexts from legal judgments ' . It is indeed a '... natural repositor[y] of the right to decide for good such legal issues as the interpretation of statutes or general legal questions affecting [taxpayers]', within the foregoing description appearing in Lord Radcliffe's speech in Hope at 563 . Moreover it is the Commissioner's bureaucratic decision on a taxpayer's objection which is referred to the relevant court by a taxpayer for review, albeit that a taxpayer is dissatisfied with only part of that decision; once that reference takes place, the court is '... then seized of the decision in its entirety... ', in the sense that '... the court is concerned to determine whether the amounts assessed as taxable income are excessive', in relation to which '... the Commissioner must be able to raise for the Court's determination the deductions properly to be allowed in the light of the Court's decision as to assessable income' ( Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd [1994] HCA 58 ; (1994) 181 CLR 466 at 476 and 479). 68 Viscount Simonds agreed explicitly with Lord Radcliffe's comprehensive speech in Hope . Lord Cohen stated simply 'I concur', and Lord Jenkins similarly 'I agree', in both instances without distinguishing between the speech of Lord Radcliffe and that of Lord Keith who wrote the only other speech containing reasons. This submission necessarily proceeded upon the assumption, which has not been challenged by the respondent, that the facts and circumstances relevant to the appellants' exemption from rating under section 1 of the Scientific Societies Act, 1943, remained unchanged from what they were when the local valuation court on October 24, 1951, decided that the appellants' hereditament was exempted from rating under the Act of 1843. Otherwise it would not be the same question that comes up for reconsideration. I find it difficult to equate the procedure followed out under the statute with a proper lis inter partes, though that, of itself, might not be conclusive. Nor do I find it easy to distinguish the functions performed by assessment committees before the coming into operation of the Act of 1948 from those now performed by a local valuation court, or to think, because the new body is differently constituted and called a court, that a greater importance and effect should be attached to its decisions. The introduction of a court into the proceedings instead of a committee played some importance, if I understood aright, in the submission for the appellants. The valuation officer has a public duty to perform by making periodically every five years a valuation list of all hereditaments, with certain exceptions, in his rating area. He must necessarily reconsider and revise the previous valuation list. He has no personal interest in any appeals taken against his valuations, and has a duty to hold the scales as fairly as he can among the ratepayers affected, the occupiers of the various hereditaments. The general body of ratepayers is constantly changing. With each quinquennium the revaluations will affect a new body of ratepayers. I doubt if the valuation officer owing such a duty to an ever-changing body of ratepayers can be regarded as always the same party in the sense in which that expression is used for the application of the rule of res judicata. What if the appellant society changes its habitat and moves into another rating area with a different valuation officer? Particularly must that be so, as in the present case, of decision-making by a Federal Court judge upon a taxpayer's entitlement or disentitlement to income tax deductibility, in respect of outgoings or losses incurred in continuing business operations of subsequent or successive fiscal year or years, as this is necessarily or inherently ' not eadem quaestio as the issue decided in the later proceedings ', to adopt Lord Radcliffe's description in Hope . Put another way, the judicial function of a Federal Court judge is hardly to be equated with the administrative function to '... reconsider and revise the previous valuation list' , and probably also of a quasi administrative function. Incidentally I have of course earlier referred to the English doctrine of res judicata having a wider connotations to that prevailing in Australia. 70 Further in the speech of Lord Keith in Hope , reference was made (at 569-570) to 'much reliance' by the appellant society upon the Privy Council's decision in Hoysted , his Lordship there observing that such '... authority is not binding on this House, and the point was never taken in the case that a decision on liability to assessment to tax for one year is not conclusive of liability to assessment in a later year' , and further that '[t]he judgment [of the Privy Council in Hoysted] would seem to conflict with what was said a month earlier in [Broken Hill] by a Board differently constituted, rejecting a plea of res judicata ...' . His Lordship concluded by adopting a similar conclusion, as in Broken Hill, as to there not being involved the '... eadem quaestio , and therefore the principle of res judicata ... ' not being applicable, and by further observing the absence of what was essential to a successful plea of res judicata . For completeness I record also that Hoysted was of course decided by the Privy Council on an appeal from Australia, unlike Caffoor, and moreover Hope was a decision of the House of Lords, and that those circumstances have implications in terms of the present principles of juridical authority in operation in Australia, to which I have of course made reference. True it is of course that Broken Hill was determined by the Privy Council on appeal from Australia, but as earlier mentioned, about five weeks prior to the Privy Council's decision in Hoysted , also on appeal from Australia, yet without being apparently referred to by counsel appearing in Hoysted and nor by the Privy Council in the course of its reasons. 71 Purportedly on the basis of authority thus cited, which I have sought to record at some length in deference to and appreciation of the industry inherent in the submissions of counsel for the taxpayer applicants (as well as of counsel for the Commissioner), it was next contended on behalf of the taxpayer applicants that 'whilst Hoysted remains good law in relation to the application of issue estoppel other than to tax cases, it is clear that the decision of the Privy Council in Broken Hill is to be preferred where the issue is the effect of a decision on one year of [taxable] income on litigation over a different year'. The taxpayer applicants further asserted that '[t]he Commissioner cannot put forward any decision in which Hoysted has been cited as authority for the proposition that a decision involving the same or a similar subject matter in one year of assessment of an annual rate or tax creates an estoppel against the taxpayer in respect of another year of assessment'. Yet as I have earlier recorded, the taxpayer applicants as well as the Commissioner appeared to rely on the generality of the phraseology of Lord Shaw in Hoysted to the extent adopted by Dixon J in Blair v Curran at 532 earlier extracted in these reasons, being that 'a fact fundamental to the decision arrived at' in former proceedings and 'the legal quality of the fact', must be taken as finally and conclusively established, so long as any such fact is not subsidiary or collateral. The Commissioner would characterise as a fact fundamental to the earlier concluded Spassked proceedings the findings there made, which I have earlier recorded concerning critical circumstances and features involved in relation to the fiscal years 1988 to 1994, and the inherently consequential implications thereof to deductibility for income tax purposes in respect of the year of income 1992 the subject of resolution by the earlier concluded Spassked proceedings. 72 The taxpayer applicants asserted further that none of the authorities relied on by the Commissioner addressed what the taxpayer applicants described as the divergence of views between Hoysted and Broken Hill in relation to tax matters, save briefly in Falk v Haugh [1935] HCA 35 ; (1935) 53 CLR 163. That litigation was concerned with relief against forfeiture, in the context of emergency legislation enacted in the depression years to address hardship arising from the consequences of default in payment of mortgage indebtedness, in circumstances where such payments as had been made by a mortgagor to a mortgagee had been received and applied by the mortgagee on account of the mortgage debt generally and thus without distinction as to principal or interest, thereby resulting in default as to payment of interest, and further where the mortgagee had entered possession and received rents and profits pursuant to a default which appeared to have differing statutory consequences, depending on whether the same relating to principal or interest. The decision in the County Court was that interest had not at that time been paid up to a given date. The question at issue here is whether it has now been paid up to another and later date. An affirmative answer to that question involves no necessary contradiction of the County Court decision. The issues are not the same; but the decision of each issue involves a common question, namely, what, in the case of a mortgagee in possession, amounts to payment. It is this question with which the reasons of the Full Court deal. It may, therefore, be right to regard those reasons as forming only a subsidiary ground leading to the decision of the issue between the parties, and not as constituting the decision of an issue. An estoppel of this kind arises from the decision inter partes of an ultimate issue identical with one of the ultimate issues that are again raised. But it does not arise from the adoption of a process of reasoning in the decision of the issue, although the same process may be applicable in the decision of a second and different issue. It is upon this ground, if at all, that the decision of the Privy Council in [Broken Hill] is to be reconciled with its decision in [Hoysted]. The Commissioner's analysis in relation to Falk , so far as it goes, must be correct, and is not sufficiently answered by the circumstances that the Privy Council decided in Caffoor at 599-601 to follow Broken Hill instead of Hoysted by reason of the latter's inconsistency with the line of English authority there identified in Caffoor. Moreover there is much to be said for the view that the critical findings of the primary judge and of the Full Court in Spassked referrable to the period of time from 1988 to 1994 (both of course inclusive) which I have earlier cited, cannot aptly be described (to adopt parts of the Falk dicta ) as ' only a subsidiary ground leading to the decision of the issue between the parties. ' Moreover it would be at least more realistic to say that on true analysis, such findings comprised or formed part of ' the decision... of an ultimate issue identical with one of the ultimate issues that are... raised' , to cite from the above passage in Falk . I will later refer to Viro and other authority relating to Privy Council decisions. The taxpayer applicants submitted in any event that 'while Hoysted has not been specifically overruled by the High Court in relation to its application to tax matters, the High Court has referred with approval to the decision of the Privy Council in Caffoor , where the decision in Broken Hill was followed and Hoysted rejected', and I was referred again Chamberlain at 510, where the brief reference thereto was made by Deane, Toohey and Gaudron JJ and which I have earlier discussed as being at least arguably not sufficiently on point arising for present examination. The taxpayer applicants further submitted 'that whilst Hoysted remains good law in relation to the application of issue estoppel other than to tax cases, it is clear that the decision of the Privy Council in Broken Hill is to be preferred where the issue is the effect of a decision on one year of income on litigation over a different year'. In my opinion, so much is far from 'clear'. Indeed the framework of the taxpayer applicants' case was assembled by reference to authorities concerned not with particular situations involving the kind or scope of that the subject of the earlier concluded Spassked proceedings, which involved a factually comprehensive and complex enquiry as to the purpose and the objectives of application of the proceeds of borrowings in a substantial commercial context and moreover which also involved corporately related borrowers and corporately related lenders operating otherwise than at arms length, in order to determine the deductibility or otherwise for income tax purposes in relation to the years of income the subject of dispute which were immediately proximate to that year of income the subject of resolution by the earlier concluded Spassked proceedings. Of course, the purpose of application of the proceeds of borrowings by a taxpayer from a third party in one fiscal year for an income producing purpose may subsequently transpose to a non-income producing purpose to that of the proceeds of the original borrowing or of an ongoing borrowing, in either case from the same lender, whether in the course of the same or a subsequent fiscal year. Although there was some support for the contrary view in [Hoysted] , that decision was not followed in [Caffoor] . In Caffoor the Privy Council determined that a taxpayer is not estopped from contending it was entitled to an exemption in respect of a year of income by a decision in respect of a different year of income. More recently, in [Chamberlain] Deane, Toohey and Gaudron JJ cited Caffoor as authority for the proposition that "the Commissioner is not bound by a determination made in respect of an assessment for one year, so far as other years are concerned". It must follow that the Commissioner's issue estoppel argument also fails. It appears that Merkel J was not provided with the substantial scope of juridical references to and analysis of authority that has been presently afforded to the Court by the parties in contest, including that analysis and debate referrable to the High Court's later decision in Queensland Trustees Limited v Commissioner of Stamp Duties [1956] HCA 75 ; (1956) 96 CLR 131, which I will shortly next discuss, or for that matter to Falk . The decision in Orica did not survive appeal (see Commissioner of Taxation v Dulux Holdings Pty Ltd [2001] FCA 1344 ; (2001) 113 FCR 436), though the issues of the scope here arising did not feature in the reasons for judgment on that appeal. I will later return to Orica . The case involved an initial assessment of stamp duty made under the Stamp Acts 1884-1940 (Qld) by the Commissioner of Stamp Duties on a transfer of real property from a company controlled by a deceased person as transferor to the trustees of a trust estate as transferees, being an assessment later upheld by the High Court (in re Sharpe (1944) QSR 26). Subsequently the trustees transferred the land to the surviving beneficiary of the trust in accordance with terms directed by testamentary provision, and the Commissioner of Stamp Duties assessed that subsequent transfer to succession duty under the The Succession and Probate Duties Acts 1892-1952 (Qld). The High Court held by majority that the claim by the Commissioner of Stamp Duties should fail on the ground of issue estoppel. It was asserted by the Commissioner of Stamp Duties that it was fundamental to the High Court's decision, which upheld the assessment of stamp duty, that the transferee beneficiary's title derived from the terms of the settlement and not from the will of the testator, the High Court having accepted the Commissioner of Stamp Duties' contention 'that the testator at his death had no interest in the land and no power to compel its transfer to his trustees. The taxpayer applicants contended further that Queensland Trustees stands outside the 'directly relevant authorities', being authorities to which I have referred earlier in these reasons and which dealt with annual assessments of income tax, land tax and other duties. Rather Queensland Trustees was said by the taxpayer applicants to have been decided upon the basis that the existence of an issue estoppel had been determined by the Privy Council decision in Hoysted , without reference to the 'contrary decision in Broken Hill ', and further that after the decision in Queensland Trustees , 'Caffoor decisively rejected Hoysted and adopted Broken Hill' . It was acknowledged by the taxpayer applicants that Queensland Trustees was not referred to in Caffoor or Hope, though neither case had of course originated in Australia. The taxpayer applicants further argued on that footing that the decision in Queensland Trustees was not directly in point, and could only 'stand with the line of authority running from Broken Hill to Chamberlain ' on the basis that, unlike those cases, it was not concerned with annual assessments of tax, and further that '[i]n the light of the other decisions, ... including the adoption of Caffoor by the High Court in Chamberlain ', Queensland Trustees should not be regarded as persuasive in the context of a Part IVC appeal on annual income tax assessment. I have of course emphasised the context involved in relation to Chamberlain and the relative briefness of reference made therein to Queensland Trustees. If the Crown is so estopped, the assessment of succession duty cannot stand, for the nomination and schedule was an instrument which operated inter vivos , and the trusts which it stated in favour of the sons were expressed without reference to the death of any person . The case therefore turns upon a question of issue-estoppel. The claim for succession duly must therefore fail. The Commissioner further submitted that the doctrine 'can certainly apply to attempts to re-litigate issues arising under one species of taxation, and in particular, a revenue enactment concerned with annual assessments of tax', and emphasised in that latter context that the Crown in Queensland Trustees was held estopped, in respect of its administration of both the Queensland stamp duty legislation and the Queensland probate legislation. The critical issue presented by the taxpayer applicants consequently was whether or not taxing or rating systems of annual (or other periodic) assessments or exactions allowed room for the operation of issue or similar estoppels in the determination of successive years of income tax. 79 At this point of my review of submissions on authorities it is appropriate to address more closely the taxpayer applicants' contentions upon the theme generally as to the binding authoritative operation of decisions of the House of Lords and the Privy Council in Australia, irrespective of the Commissioner's contentions to the effect that the taxpayer applicants' reliance upon the leading English decisions of Broken Hill, Caffoor and Hope were in any event misplaced. Subject, perhaps, to the special position of the House of Lords given in the period in which appeals lay from this country to the Privy Council, the precedents of other legal systems are not binding and are useful only to the degree of the persuasiveness of their reasoning. The Court is not, in a strict sense, bound by such decisions, but it has always recognized and must necessarily recognize their peculiarly high persuasive value'. The taxpayer applicants asserted that the decision of the House of Lords in Hope was one of those cases referred to in Cook as being in a 'special position'. Whether in any event of course, the speeches in Hope provide the applicant taxpayers with the extent of assistance sought to be invoked is a further matter for their concern. In further pursuit of that theme, the taxpayer applicants pointed out, in reliance upon Hope in particular, that 'what is under review is the Commissioner's decision on the taxpayers' objections', referring thereby to ss 14ZY and 14ZZ of the Administration Act. I was referred by the taxpayer applicants again to ANZ Savings Bank (at 476 and 479), where discussion occurred concerning an appeal relating to an objection decision, 'albeit that a taxpayer may be dissatisfied with only of that decision' , and to the Court's task to determine whether the amount assessed as taxable income is excessive. 81 The taxpayer applicants asserted in context that despite the width of the powers in s 199 of the Tax Act and s 14ZZP of the Administration Act, the same can only be exercised in relation to the objection decision and the assessment before the court. Consequently it was said that the objection decision and the excessiveness of the assessment to which it relates define the Court's jurisdiction in a Part IVC appeal, and reference was made in that context of the taxpayer applicants' submissions to what appears in the course of Lord Radcliffe's speech in Hope at 563, which I have earlier extracted. As I there indicated, so much tended however on close analysis to be supportive of the commissioner's case rather than the case of the taxpayer applicants; I am unable to comprehend why the same can sensibly be said to exclude in principle or otherwise the imputation of an estoppel otherwise appropriate according to law. The first was that inherent in the Commissioner's present summary application was that '... the Commissioner invites the Court to assume that the evidence to be led in the current proceedings will be the same as that in the earlier Spassked proceedings', yet '[i]t is simply not possible for the Court to make that assumption'. The submission tends to misconceive the juridical basis of the present summary judgment application of the Commissioner, which is primarily to the effect that in the light of the estoppel or estoppels arising from the evidence led by the Commissioner and established by the Federal Court at first instance and on appeal, no case in substance remains open to the applicant taxpayers to pursue in relation to the fiscal issues purportedly raised by the taxpayer applicants' present proceedings. 83 The next further issue raised by the taxpayer applicants concerns the status of IEL and QTH as privies of Spassked in relation to the assessments in contest as to the fiscal years 1991, 1993 and 1996 whereof IEF and QTH respectively are applicants. I have earlier referred to authority generally regarding the notion of privies in so far as concerns the operation of the doctrines of res judicata and estoppel. There does not appear to be any juridical dicta as to privies bearing upon the doctrine of abuse of process, at any rate to which the taxpayer applicants were able to refer. In any event, the submission of the taxpayer applicants on the controversial subject of privies was that since IEF and QTH were not parties to the earlier Spassked proceedings, '... they cannot be subject to any claim of issue estoppel'. Though not so expressed in terms, I will assume that the contention is intended to relate also to Anshun estoppel. 84 The taxpayer applicants repudiated the Commissioner's case as to satisfaction of the notion of privy, as espoused in the joint judgment of Northrop and Lee JJ in Effem, on account of IEF and QTH being effectively successors to the relevant losses of Spassked within the scope of s 80G. That contention of the Commissioner was said to be misstated in the following ways. It would be however at least surprising that in the circumstances postulated, any such conclusion should follow. 86 In my opinion, the foregoing basis for purportedly excluding the operation of at least issue estoppel should be rejected, given that the same should otherwise be imputed as an adjunct or an aid otherwise to the operation in appropriate circumstances of the enabling beneficial loss transfer provisions of the Tax Act. The contention of those provisions is implicitly apparent that a transferee of loss provisions cannot obtain or gain any superior entitlement per se than that of the transferor, being per se in the sense of deductibility not available by reason of circumstances outside the beneficial purview of the transfer of loss provisions in the first place. It is one matter for the transferor's related company to gain the benefit of transferred losses for income tax purposes within the explicit parameters of the statutory transfer of loss provisions, but quite another to gain the windfall of exclusion of an estoppel otherwise destructive of any entitlement in law to deductibility of the transferor. The taxpayer applicants' submission is to my mind foreign to the 'under or through' notion of the right the subject of the doctrine of privity. The legal right here involved must be burdened with derogation from that right in the hands of the transferor in the first place to any fiscal entitlement otherwise available, such as to give effect to the operation of an estoppel existing against the transferor. 87 I am therefore unable to accept the proposition in principle that an estoppel cannot operate so as to deny the so-called independent rights of IEF and QTH to an appeal under Part IVC. To assert, as did the taxpayer applicants, that the question whether the conditions for transfer under s 80G have been satisfied does not depend upon whether Spassked itself can challenge an assessment in any given year, is to state the issue conceivably arising too widely. The question is I think not susceptible to governance by the approach taken, otherwise than by way of estoppel, in Federal Commissioner of Taxation v Cappid Pty Ltd [1970] HCA 41 ; (1970) 127 CLR 140. In that case, Menzies J rejected the submission of the Commissioner that the taxpayer company was precluded from arguing that it was a public company in respect of a so-called Division 7 assessment, because it had withdrawn an objection to an assessment of income tax issued in respect of the same year on the basis that it was a private company. Here the asserted estoppel is claimed to have been established by curial decision binding in relation to losses for tax purposes purportedly transferred by a transferor corporation to a relevantly owned and controlled transferee corporation, and further in a context where the extent of shareholding ownership is critical to derivation of a fiscal benefit, and further where the Commissioner already enjoys the benefit relevantly of an estoppel against the transferor. It would be foreign to the operation of the tax losses provisions of the Tax Act that a transferee could gain a fiscal benefit beyond what is explicitly spelt out by those provisions. So much would bring about a windfall beyond what could conceivably, much less reasonably, fall within the contemplation of the enabling scheme of Subdivision A of Part III of the Tax Act. 88 Moving specifically to the Commissioner's invocation of an operation relevantly of Anshun estoppel, the taxpayer applicants contended that '[f]or the same policy reasons that taxation and rating cases are an exception to the doctrine of res judicata ' (thereby referring implicitly to res judicata in the English sense of inclusivity of the Australian notion of issue estoppel per se ), 'they must also fall outside the ambit of a claim for Anshun estoppel', the asserted reason being that '[i]f a party is not estopped in relation to a matter it has raised in proceedings relating to another year, it surely cannot be estopped in relation to a matter it did not raise in those earlier proceedings', referring thereby further to the doctrine as to privies described in Effem . Upon those purported footings, it was therefore emphasised by the taxpayer applicants once more that 'QTH and IEF were not parties to the earlier Spassked proceedings and so cannot fall within the principle of so-called Anshun estoppel... even if... QTH and IEF could be regarded as privies of the parties to the earlier proceedings'. The theme of those submissions of the taxpayer applicants is sought to be answered by the Commissioner in the first place by joinder of issue upon the proposition for which Broken Hill, Caffoor and Hope are said by the taxpayer applicants to espouse. If that proposition be not sustainable in circumstances such as the present, the case for the operation of Anshun estoppel upon the basis of the findings of the Federal Court in the earlier Spassked proceedings referrable to the six fiscal years 1988 to 1994 presents at least prima facie as a viable proposition. In this further context the applicant taxpayers once more placed emphasis on the circumstances that 'issues as to liability to income tax in respect of years other than 1992 could not have been litigated in the earlier proceedings, even by the parties to those proceedings', by reason of course of the apparent absence of determination of those objections by the Commissioner until after the conclusion of the earlier Spassked proceedings, a proposition which I think cannot survive juridical analysis as I have earlier opined. It is true that '... [i]t can hardly be said that at the time of the earlier Spassked proceedings the [taxpayer applicants] were delinquent in not prosecuting an appeal against a decision which had not then been made, or that the opportunity to contest that decision was available, and should have been pursued in the earlier proceedings'. However as I have consistently emphasised, the parties mutually contested critical issues, in the context of the earlier concluded Spassked proceedings, which involved and related entirely to the circumstances relevantly prevailing throughout those critical six fiscal years. Moreover it can scarcely be said reasonably that IEF and QTH were not privies of Spassked, each being wholly owned subsidiaries of IEL (and thus having threshold qualification for Part IVC purposes) and being subject at all material times together to the same at least ultimate controlling and governing parent corporate mind. 89 Moving finally to the issue raised by the Commissioner as to abuse of process, in relation to which doctrine I have earlier cited Walton and Spalla , the taxpayer applicants advanced the further proposition that 'for the same policy reasons which make annual taxation and rating cases an exception to the doctrine of res judicata , those cases are generally not amenable to a claim of abuse of process', upon the footing that '[t]he question of liability is different in each year'. It was contended by the taxpayer applicants that '[i]t is inconceivable that the High Court, the Privy Court and the House of Lords left it open to contend that in circumstances in which they held that a party was not estopped (from presenting its case in relation to another year), that party, if it raised the matter in respect of which it was found not to be estopped, was or might be guilty of abuse of process', and I was referred once more to what was said in Hope by Lord Radcliffe as to '... the public interest that tax and rate assessments should not be artificially encumbered and estoppels... even though in the result some expectations may be frustrated and some time wasted' . I have of course already made observations at length in relation to the implications or otherwise of Broken Hill, Caffoor and Hope to such distant contexts as the present, and also what was observed briefly in Chamberlain in as yet a further different but once again distant context to the present, and will not repeat those observations. It was submitted broadly in that context by the taxpayer applicants that a different outcome in respect of a different year is not to be regarded as a matter which would bring the administration of justice into disrepute. The force of that proposition conceivably gives way to circumstances illustrated for instance by the present context, where a litigation was undertaken at obviously very considerable expense over a lengthy period of time in order to determine the existence of financial circumstances and relationship attending a public company taxpayer over a period of six fiscal years, and as a consequence the fiscal implications to one of those fiscal years which arose for specific determination, and apparently without objection by the taxpayers applicants to the absence of inclusion as to the issues arising in relation to the proximate years of income. 90 Thereafter I was referred to the ratio decidendi of the Full Federal Court in Saffron v Commissioner of Taxation (1991) 30 FCR 578, and what was said in the joint judgment of Hill and Lander JJ in the Full Federal Court in the Spassked proceedings, those decisions being said by the taxpayer applicants to indicate that '... a different outcome in respect of a different year is not to be regarded as a matter which would bring the administration of justice into disrepute'. It is unnecessary to refer in detail to the ratio in Saffron, which is somewhat removed from the issues presently arising. The issue there arising related to whether evidence of the conviction of a taxpayer of conspiracy to defraud the Commonwealth carried the consequence that the convicted taxpayer was estopped from challenging the Commissioner's decisions on objections to that person's income tax assessments. No such principle was acknowledged by the Full Federal Court, it being held in effect that a conviction is conclusive evidence merely of that which it established, being the fact of conviction for the offence, but not of the facts lying behind the conviction. But the applicant shall not conduct his case for the purpose of challenging the propriety of his conviction for the criminal offence of conspiring with Mr Anderson to defraud the Commissioner or the fairness of the trial. The particular context involved in Saffron was of course distant to that involved in the earlier concluded Spassked proceedings and presently involved, but nevertheless not to the extent of entirely excluding a useful illustration as to the operation of the doctrine of abuse of process here invoked by the Commissioner. There is no general rule preventing a party inviting a court to arrive at a decision inconsistent with that arrived at in another case. The law of estoppel per rem judicatam (and issue estoppel ) define when a party is entitled to do this. Generally there must be an identification of the parties in the instant case with those in the previous case and there are exceptions. So far as questions of law are concerned, absent a decision specifically binding upon the relevant litigant, the doctrine of precedent governs when an earlier legal decision may be challenged in a later case. This overlaps with the concept of vexation where the same person is faced with successive actions making the same allegations which have already been fully investigated in a previous case in which the later claimant had an opportunity to take part. This reasoning does not apply to an action against a lawyer alleging that he has mishandled a previous case. The taxpayer applicants contended that it could not be said that they had an ' opportunity to take part ' in what was described by them as '... a contest over the liability to tax in respect of other years and in respect of other taxpayers'. That contention was contextually related to the further proposition of the taxpayer applicants that '... the Commissioner's submission that the present taxpayers and Spassked are controlled by the same entity, is in the present circumstances, irrelevant to the question of abuse of process'. I have difficulty in understanding why that should be so. Control by the same corporate entity, for instance the control of a holding company over its wholly owned subsidiaries, may surely be a factor of potential relevance to the resolution of an issue as to abuse of process which focuses upon the conduct of the controlled entity and a relevantly related company, especially in circumstances of entire (ie wholly owned) shareholding control. As exemplified in passages I have earlier extracted from the judgments in Spassked at first instance and appeal, evidence was led as to the operations, activities and decision making of and in relation to IEL wholly owned and controlled subsidiaries comprising the taxpayer applicants in particular, in relation to periods of time both prior and subsequent to the 1992 fiscal years. A similar observation is seemingly apposite to the purported reliance by the taxpayer applicants upon the following dictum of Heydon JA (as he then was and with whom Spigelman CJ and Mason P agreed), in R v O'Halloran [2000] NSWCCA 528 ; (2000) 36 ACSR 315 at 342-344, in the course of which his Honour observed that '[t]he law prevents Mrs Fenwick relitigating in civil proceedings issues decided in earlier civil proceedings; it does not necessarily prevent a non-party, namely the director, litigating issues for the first time in criminal proceedings' . What of course is here relevantly involved are civil proceedings alone. In this regard, by way of repetition for emphasis, each of IEF, QTH and Spassked was at all material times of course a wholly owned subsidiary of IEL, upon the footing whereof IEF and QTH have claimed deductibility for income tax purposes consequential upon the transfer of Spassked's purported income tax losses sustained in the 1991, 1993 and 1994 fiscal years, being losses transferred respectively to IEF and QTH by Spassked under the auspices of s 80G of the Tax Act, headed Transfer Of Loss Within Company Group . Thus each of IEF and QTH made claims for allowable deductions 'under or through' Spassked's entitlement to claim as an allowable deduction the interest expense incurred by Spassked as borrower pursuant to the interest bearing loans made to Spassked by IEF. The subsequent claims made by IEF and QTH as transferees of losses for income tax purposes necessarily involved of course as an essential component (and in the earlier concluded Spassked proceedings being the only matter at least in substantial dispute) the supervening contention by Spassked that it was entitled to income tax deductibility in respect of interest incurred on those inter-group borrowings; I refer in that regard to the definitions of ' loss ' and ' non-loss deductions ' respectively in ss 79E(1), 79E(12) and 80G(6)(a) of the Tax Act. That issue was of course resolved by the Federal Court, both at first instance and on appeal, in favour of the Commissioner, and Spassked's application to the High Court for leave to appeal was refused. The principal issue arising for resolution in the present proceedings relates to the deductibility or otherwise of interest on such borrowed funds in relation to the 1991, 1993 and 1994 fiscal years. The substantive purpose for which funds had been so advanced to and applied by Spassked remained unaltered in respect of the six fiscal years 1988 to 1994 inclusive, and continued beyond that period of time to the extent of the amount for the time being remaining unpaid by Spassked to IEF. In respect of the 1991 fiscal year, entitlement to utilise at least a segment of that tax deductibility was acquired by QTH in whole or in part, and in respect of the 1993 and 1996 fiscal years, entitlement to utilise at least a further segment of that tax deductibility was acquired by IEF, in each such case pursuant to the transfer of tax loss provisions of s 80G of the Tax Act between relevantly related corporate taxpayers. The funds so borrowed by Spassked from IEF were applied by way of subscription for shareholdings in a further wholly related corporate group subsidiary GIH, and in turn by GIH in wholly owned shareholdings taken up by GIH in so-called Subcos. An outline of those arrangements is illustrated diagrammatically at the conclusion of the Full Court's reasons for judgment in the earlier concluded Spassked proceedings. 96 It was further established by the Federal Court in the earlier concluded Spassked proceedings that the income derived by Spassked, from that application of proceeds of Spassked's borrowings from IEF over at least the fiscal years 1988 to 1994, comprised what the Federal Court described as ' two comparatively miniscule dividends ' received from GIH, and further that such was the disproportion of financial return thereby derived by Spassked from those shareholdings, and the circumstances otherwise in which and the purposes for which Spassked undertook those borrowings, that it could not be postulated that the borrowings were made for the purpose of gaining or producing assessable income, or were necessarily incurred in carrying on business for the purpose of gaining or producing assessable income, within s 51(1) of the Tax Act. That finding was made of course in the litigated context of proceedings originated in relation to the 1992 fiscal year alone. 97 The present case of the Commissioner emphasised the circumstance that in order to resolve the issue arising in the context of and by reference to the 1992 fiscal year, evidence was adduced in the earlier concluded Spassked proceedings, and necessarily as well as appropriately so, in respect of the borrowing activities of Spassked, and the purposes thereof undertaken, in respect of at least that duration of six fiscal years stemming from and including the 1988 fiscal year until and including the 1994 fiscal year, and accordingly that the reasons for decision in favour of the Commissioner in respect of the 1992 fiscal year were founded upon and related to that scope of evidentiary material and decision-making, such as to create the estoppel propounded by the Commissioner in the context of the present proceedings. Moreover it is apparent that those inter-company arrangements and transactions remained in place beyond the 1994 fiscal year, for what that may decisively matter. The arrangements implemented in relation to the transfer of tax losses to IEF and QTH, being losses incurred during those fiscal years for income tax purposes, did not derogate relevantly from the continuation in law of the borrowing arrangements originally put in place between IEF as lender and Spassked as borrower. 98 There is identity of significance between the circumstances raised for determination in the present proceedings and those already determined in the context of the earlier concluded Spassked proceedings, notwithstanding that the precise fiscal issue arising for determination thereby related specifically to the 1992 fiscal year, whereas those fiscal issues arising for determination in the present proceedings relate specifically to deductibility in respect of the 1991, 1993 and 1994 fiscal years. The subject nature and scope of the evidence tendered in the earlier concluded Spassked proceedings was such that irrespective of the absence of agreement between the taxpayer applicants and the Commissioner as to any test case precedent to operate in respect of findings of the Federal Court upon the issues arising necessarily for resolution in those previous proceedings, those findings so operate as to deny entitlement in law to the taxpayer applicants to re-litigate those issues in further proceedings falling at least within the evidentiary band of the six fiscal years of income deductibility from 1988 to 1994, upon the footing of abuse of process and also of estoppel. 99 The case of the taxpayer applicants, propounded to the Court in the context of the present proceedings, was at least largely to the effect that there is an inherently different and distinguishable justiciable issue falling for determination concerning the revenue character or otherwise of whatever expense is outlaid or cost is incurred by a given taxpayer in relation to one fiscal year from that which the same taxpayer has outlaid or incurred in relation to any other fiscal year or years, whether antecedent or subsequent to that former single fiscal year and whether consecutively or otherwise. That thesis was maintained by the taxpayer applicants in the context of the present proceedings, notwithstanding that any income so derived by Spassked as borrower in the respective fiscal years here in issue might or would have emanated from the same source and crystallised in the same context, and moreover that the relevant outgoings, being interest on moneys lent, might have been outlaid or incurred in respect of moneys lent for similar purposes and in similar circumstances. Put emphatically by the taxpayer applicants, each fiscal year of a taxpayer was said to produce a discrete fiscal issue or issues for determination for income tax purposes, whether as to assessability or deductibility. Juridical support for those propositions was invoked by the taxpayer applicants principally from the Privy Council authorities of Broken Hill and Caffoor , and from the House of Lords authority of Hope . I have earlier sought to summarise the operation as judicial precedents of Privy Council and House of Lords decisions generally, in terms of binding authority in Australian courts, particularly in the present times. In the course of my review of those English authorities invoked by the taxpayer applicants, I have made certain qualifying observations concerning the context and the scope of operation of those decisions, and have done so not only by reference to subsequent Australian judicial dicta but also to distinguishable factors conceivably attending those English cases. However it is unnecessary for me to draw that inference, at least in the light of the conclusions I have otherwise reached. For some unexplained reason, any such further steps did not eventuate until at least some later time prior to the commencement of the present proceedings. However the apparently unexplained delay of the Commissioner in responding to those outstanding objections does not in my opinion produce any adverse significance to the operation of issue estoppel, Anshun estoppel or abuse of process, if otherwise established upon the footing of findings of the Federal Court in the context of the earlier concluded Spassked proceedings, whether at first instance or on appeal. In that regard there was no finding of the Full Court inconsistently with any finding at first instance, at least of significance. The taxpayer applicants have not distilled the existence of any distinguishing factor, relevant to the resolution of the proceedings presently on foot in relation to the 1991, 1993, 1994 and 1996 fiscal years, that was not material or would not have been material to the circumstances falling for resolution in the context of the earlier concluded Spassked proceedings. Of course as I have foreshadowed, the taxpayer applicants contended that the critical and pervading circumstance, said to answer the present summary application of the Commissioner, is that each of those fiscal years other than 1992 involved a distinct and discrete issue to that the subject of the earlier concluded Spassked proceedings, in that an income tax assessment is conclusive and final only for and in relation to the fiscal period for which it is made, given the reasoning of the Privy Council and House of Lords authorities in particular of Broken Hill, Caffoor and Hope . Yet as I have indicated already, the earlier concluded Spassked proceedings were determined in the context of, and in explicit reliance upon evidentiary material covering relevantly the commercial activities of Spassked and other members of the wider corporate IEL group undertaken in respect of at least the six fiscal years 1988 to 1994 inclusively, and thus inclusive of the 1992 fiscal year, being evidentiary material upon which the Commissioner placed specific reliance in support of its application for summary judgment in each of the subject four proceedings falling for present resolution. 101 If the intention attributable objectively to the taxpayer applicants, as well as to the Commissioner, had been otherwise than that the outcome of the earlier concluded 1992 Spassked litigation would effectively resolve the fiscal issues appertaining to the other proximate years of relevance I have identified, it may be though to be perhaps beyond comprehension why both parties would not have sought to ensure that the earlier concluded Spassked proceedings would have consensually embraced all fiscal years in dispute. It may be thought to be implicitly apparent that each party chose to treat the earlier concluded Spassked proceedings as being in the nature of a test case, though given the standing of each of the parties, it would be unlikely that any such mutual objective would not have been documented. There is no reason that I have been able to identify or discern as to why the evidentiary factors relating to and bearing upon that 1992 fiscal year could have been adjudged to be materially or significantly different in scope or in principle to those evidentiary factors relating to and bearing upon any of the preceding and following fiscal years the subject of the present proceedings. No such reason has been seemingly articulated by the taxpayer applicants in the context of the present summary proceedings for strike-out, other than the per se circumstance of differing fiscal years in dispute arising for resolution. It would surely have been unthinkable, again objectively speaking, to either party to the earlier concluded Spassked proceedings that the other party could have rationally contemplated a virtually repetitive contest, at substantial cost, of the substantive evidentiary issues arising from the large body of material adduced concerning the IEL group and its inter-group transactions, over such an extended period of time, being an extended period of time covering at least the six fiscal years 1988 to 1994 both inclusive. Yet that is what the taxpayer applicants must inevitably intend to do, at very substantial further expense to both litigating parties, if the present application at the instance of the Commissioner for summary relief should be dismissed. 102 Having regard to the complexity and consequently the length and likely cost of the earlier concluded Spassked proceedings involved in litigating the 1992 fiscal issues, which would have been readily apparent from the outset to IEL group interests and to the Commissioner alike, and to the absence of any evident distinction of material significance here between the issues arising in relation to the 1992 fiscal year from those arising in relation at least to each of the 1991, 1993 and 1994 fiscal years (the 1996 fiscal year seemingly involving a varied situation), it is seemingly unlikely that either party would have entered upon such a lengthy and expensive process involving the resolution of the 1992 fiscal year alone, without an appreciation that a similar curial process would fall to be undertaken and pursued in relation to those further fiscal years, in the absence of an effective estoppel. Both parties must reasonably be taken to have had an appreciation of the principles as to abuse of process, and of issue estoppel and Anshun estoppel, such as to have rendered the need objectively to have drawn the other's attention to the existence of an intention not to be bound by the Federal Court's decision-making upon the 1992 fiscal year assessment in relation to any subsequent assessments in respect of the remaining fiscal years the subject of the then unresolved taxpayer objections. In any event, no such intention was apparently communicated. 103 From the findings I have sought to extract or summarise concerning the context to those six fiscal years, as established by the Federal Court in the earlier concluded Spassked proceedings, I am of the opinion that aside from the case raised by the Commissioner as to the operation of the doctrines of issue estoppel and Anshun estoppel which I will later address, the principal proceedings presently in train at the instance of the taxpayer applicants, in relation to the 1991, 1993 and 1994 fiscal years, and inclusive also of the significance of losses subsequently transferred in respect of the 1996 fiscal year, constitute or involve an abuse of process on the part of the taxpayer applicants within the principles enunciated in Walton , and more recently restated comprehensively in Spalla , being principles which are susceptible to application in my opinion to circumstances beyond the scope of operation of the doctrines of issue estopped and Anshun estoppel. From what I have identified from the context of the events and circumstances attending the earlier Spassked proceedings as determined by this Court in relation to the 1992 fiscal year, it would have been inferentially or implicitly apparent to the decision-makers of the respective parties to those proceedings (of course Spassked and the Commissioner), objectively speaking, that the outcome of that Federal Court litigation would serve to resolve the remaining fiscal years additionally in dispute, and to do so irrespective of the collateral interests of the Spassked wholly related companies IEF and QTH as transferees from Spassked of losses for income tax purposes. In that latter regard, each of IEF, QTH and Spassked have had of course at all material times the same corporator, both immediately (IEL) and ultimately (Adsteam), and hence inferentially the same respective ultimate corporate group decision-makers. The basis for the inter group transfers of tax losses pursuant to s 80G of the Tax Act reflected of course the wholly owned subsidiary status of each of Spassked as transferor and of QTH and IEF as transferees of the benefit of certain of the tax losses in relation to their immediate public company parent IEL. 104 In drawing inferences appropriate to those conclusions, I have paid regard (as I have foreshadowed) to the circumstance that the taxpayer parties did not enter into any explicit agreement with the Commissioner to the effect that the outcome of the 1992 fiscal year proceedings should so operate as to produce a corresponding or consequential resolution of the remaining fiscal years in dispute. Bearing in mind however the subject matter and scope of the evidence adduced and addressed by the parties in the context of the earlier concluded Spassked proceedings (of course Spassked and the Commissioner), and of the reasons for decision at first instance in relation thereto, and consistently therewith the reasons for dismissal by the Full Court on the subsequent appeal by Spassked, being reasons substantially and also essentially in line with those of the primary judge, the mutual intent of each of the litigating parties, as a matter of reasonable as well as necessary implication, was I think objectively to cover the evidentiary field required to resolve the matters in fiscal dispute between the Commissioner and Spassked, and as a consequence between the Commissioner and the transferees or assignees of Spassked's tax losses falling within the scope of Subdivision A of Division 3 of Part III of the Tax Act (the latter containing of course ss 79E and 80G to which I have earlier referred), being of course IEF and QTH. As I have already mentioned, no substantive basis has been articulated by the taxpayer applicants for resistance to the Commissioner's application for summary judgment, other than that fiscal years, apart from that of 1992 the subject of the earlier concluded Spassked proceedings are now sought to be put in issue pursuant to the formal disallowance of objections of the taxpayer applicants, and all that, notwithstanding the evidentiary scope, as well as the reasoning and the outcome of those proceedings. 105 I have borne in mind, as I have already indicated, that the observations and findings of the primary judge, and subsequently of the members of the Full Court, made in the earlier concluded Spassked proceedings, occurred in the context that the objections to income tax assessments lodged by the taxpayer applicants in relation to the present fiscal years in dispute had not been resolved by the time of the Commissioner's adverse determination of Spassked's 1992 fiscal year objections. Nevertheless it would defy reality to postulate that the objections to income tax assessments for the time being unresolved by the Commissioner related to circumstances different in material respects to those falling for resolution by the earlier concluded Spassked. The Commissioner has established that the taxpayer applicants are seeking, by the present principal proceedings brought of course at the instance of IEF and QTH as well as of Spassked as taxpayers, to achieve a re-determination of the same evidentiary issues substantially resolved in favour of the Commissioner already by the earlier concluded Spassked litigation, and relating for instance, and importantly, to the purpose of borrowing, and to the use and application of proceeds of borrowing, and otherwise to matters relevant to the scope of operation of s 51(1) of the Tax Act. 106 Moreover it is further appropriate to point out that the context and circumstances of the present proceedings are I think significantly distant and removed from those of the authorities relied upon by the taxpayer applicants, being principally of course Broken Hill, Caffoor and Hope , such as to render those authorities of no sufficient assistance here to the taxpayer applicants as judicial precedents. I have drawn attention to those contexts and circumstances in the course of my review of those cases. Moreover as I have earlier discussed in the context of the reasons in the joint judgment I have extracted from the High Court's decision in Falk, there is at least something plausible to be said for the view that Broken Hill and Hoysted are susceptible to reconciliation and thus distinction in operation, and in any event, that Hoysted should be preferred to the extent of any inconsistency. So much would be in line with the observations of the three members of the High Court in Queensland Trustees who reviewed the United Kingdom authorities. Moreover I do not think that the taxpayer applicants gain assistance of sufficient significance here from the relatively brief citation of Caffoor appearing in the joint judgment of three members of the High Court in Chamberlain , for the reasons I have earlier mentioned, which included reference to the proposition that ' the Commissioner is not bound by a determination...' , and thus not contextually to a process of reasoning leading to a substantive determination by a superior court of record. In none of those English authorities moreover was the doctrine of abuse of process, additionally to estoppel, apparently invoked. That area of complexity related to the scope of operation of the doctrine as to privies, in so far as the same may apply in relation at least to the general law of estoppel, the taxpayer applicants asserting that IEF and QTH were not privies of Spassked according to the established precepts of that doctrine. Of course Spassked is one of the three taxpayer applicants, along with IEF and QTH, and Spassked was the applicant in relation to the earlier concluded Spassked proceedings, the findings and contextual implications whereof are sought by the Commissioner to be imputed to each of the three taxpayer applicants in relation to in the present context of fiscal years. The issue raised by the taxpayer applicants concerning privies would not relate to the issues arising in respect of the 1994 fiscal year, neither IEF and QTH having apparently taken any assignment of losses incurred by Spassked in relation to that year. I am unable to accept the contention of the applicant taxpayers that the operation of abuse of process and estoppel doctrines, as postulated here by the Commissioner, should be denied in relation to what was found and determined in the earlier concluded Spassked proceedings in any explicit or implicit context involving any issue as to the qualification of IEL and QTH as privies. Each of IEF and QTH, as well of course as Spassked, are wholly owned and controlled by the same parent company, and thus by the same corporate mind, being most proximately of course IEL in the first instance. It may be readily inferred or also imputed objectively that each of the three applicant companies Spassked IEF and QTH held the same corporate purpose and intention, as a matter of commercial reality and otherwise of corporate control and governance, at least in relation to the circumstantial scope of the issues here falling for resolution. I see no good reason why the doctrine as to privity, variously articulated for instance in Rogers, Effem and Arthur JS Hall , should not respond in principle to the Commissioner's present invocation, bearing in mind the substance and reality of the subject commercial context, and the factor of corporate governance within what is here involved by way of primarily an IEL wholly owned corporate group. That conclusion alone would operate in principle adversely to IEF and QTH in relation to any issue by way of denial of privity, given at least the implications of their status as wholly owned subsidiaries equally with Spassked, stemming from the same wholly owning parent IEL. Of course the critical estoppel arising in any event is in favour of Spassked, and I am unable to perceive therefore a sufficiently viable basis for any subsequent imputation by way of reliance upon the doctrine of privity, in circumstances where IEF and QTH derived their title by transfer from Spassked in the first place. 109 The conclusion should in my opinion to be drawn, in the context of the events which have happened, that the mutual intention to be rightly attributable, inferentially as an objective finding in relation to the corporately related taxpayer applicants, is that each was subject at all material times to the same controlling and decision-making corporate mind. For one matter, the earlier concluded Spassked proceedings concerning the 1992 fiscal year were undertaken implicitly to resolve, as I have already foreshadowed, the subject fiscal issues arising between Spassked as taxpayer, and also as between Spassked and the other wholly owned subsidiaries of IEL (being IEF and QTH) on the one hand, and the Commissioner on the other, not merely concerning that fiscal year in relation to Spassked, but also in relation to the remaining fiscal years which fell within the scope of the circumstances the subject of the evidence adduced in those earlier concluded Spassked proceedings. Moreover the taxpayer applicants have been unable to demonstrate in any event a viable footing for distinguishing the fiscal circumstances of Spassked concerning the 1992 fiscal year from those of Spassked concerning any one or more of the 1991, 1993 and 1994 fiscal years, and as a consequence also those of IEF and QTH respectively in relation to those fiscal years. To that conclusion I would add reference to the 1996 fiscal year, so far as the same might be relevant to the estoppel issue arising, which would not in any event seem to be the case, since the losses transferred during the 1996 fiscal year appear to have been incurred by Spassked originally in the context of the critically relevant six year period from fiscal years 1988 to 1994. 110 In that latter regard, in the Full Court in the earlier concluded Spassked proceedings, Hill and Lander JJ recorded (additionally of course to what I have earlier extracted of similar relevance), that '... interest was incurred on a loan to acquire shares where, in all the years of income in question and for the foreseeable future, from the time [that Spassked] structure was established, steps would be taken to ensure that the shares acquired would not produce anything but a nominal amount of assessable income'. Those 'years of income in question' so addressed were of course the six fiscal years from and including 1988 to 1994. Furthermore, as their Honours' joint judgment recorded further, '... at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on by it in the course of gaining or producing assessable income', but that '[r]ather, the occasion of each outgoing of interest was to be found in those shares deliberately being non-income producing'. Similar findings in relation to those themes may be identified from the generality of the observations of Gyles J, in the context of his Honour's reference to '... all the years of income in question '. Those findings could not be rightly characterised merely as ' building blocks ' leading to the ratio or ratios for decision in Spassked, being the description used by McHugh J in Rogers at 283 ( supra ). I should add that in any assessment of the circumstances here prevailing concerning the Commissioner's case for abuse of process, issue estoppel and Anshun estoppel, the principal focus must be upon those circumstances affecting or relating to Spassked at least in the first instance, those relating to IEF and QTH being derived from Spassked and apparently incurred in relation to the fiscal years 1991, 1993 and 1996, and in any event incurred during the six year fiscal year period from 1988 to 1994 inclusive. 111 As I have further foreshadowed, the taxpayer applicants' principal contentions were in any event to the effect that there is a per se entitlement to curial disputation of the Commissioner's determinations in respect of each fiscal year beyond that of 1992 in controversy, since those disputed determinations, relating apparently to the 1991, 1993, 1994 and 1996 fiscal years (in the case of 1996 involving merely transferred losses originally incurred during the critical 1988-1992 fiscal years), constitute inherently different and discrete matters falling for curial resolution, in conformity with the ratio of the decisions of the Privy Council in Broken Hill and Caffoor and of the House of Lords in Hope . As I have sought to explain earlier in the context of discussion of those English decisions, the same were made in contexts significantly removed from the present, the latter involving of course complex and substantial inter IEL group commercial transactions. The circumstances in Broken Hill, Caffoor and Hope occurred in contexts involving the imposition of yearly taxing or rating assessments, based on criteria inherently susceptible to annual variation by way of change in valuations upon the basis of which rating or taxing would fall for assessment or determination by specialist administrative tribunals exercising functions not juridically comparable to the functions and authority exercised by superior courts of record. 112 The taxpayer applicants contended of course for the operation of a per se entitlement to litigate, discretely or cumulatively, in relation to each of the 1991, 1993 and 1994, and apparently also the 1996, fiscal year revenue objections, and the consequential disputes the subject of disallowed objections, in line with those English decisions of high authority. Bearing in mind those distinguishing jurisdictional features, and as the Commissioner moreover rightly observed, if the taxpayer applicants were to be permitted to raise for redetermination each and all of the same substantive issues, or virtually so, that were raised, considered and determined in the earlier Spassked proceedings, albeit that the latter proceedings were geared and related to a different fiscal year (ie 1992), being issues principally as to the purpose of relevant borrowings, and as to the use or otherwise of borrowed funds in activities carried on for the purpose, or otherwise in the course of gaining or producing assessable income, and if the taxpayer applicants were to be successful in any such further proceedings against the Commissioner, there would be on record, as I have already mentioned, what would be inconsistent or substantially inconsistent reasons for judgment of the Federal Court. All that would constitute situations well removed, conceptually as well as contextually, from that involved for instance in Saffron . Moreover there was reversed by the Privy Council's decision in Broken Hill what had been an earlier decision of a Full Bench (by majority) of the High Court of Australia, and there was inconsistency between that decision of the Privy Council and the almost contemporaneous Privy Council decision in Hoysted , involving an appeal which also emanated from Australia . Moreover as has been further mentioned, Hoysted was applied by the Full Court in Chamberlain (though the principal judgment of the High Court in Chamberlain cited Caffoor though briefly and not in any controversial context), and Caffoor and Hope did not involve appeals from Australia. Furthermore Dixon J (as he then was) in Blair v Curran cited Hoysted , not irrelevantly in terms of the scope of principle here the subject of scrutiny. The High Court in Falk , without expressing any preference, pointed to the dilemma in reconciling Broken Hill with Hoysted. More directly of assistance to the Commissioner's case moreover was the favourable approach taken to Hoysted adopted by those three members of the High Court in Queensland Trustees who made reference to Hoysted. In all those circumstances, the emphatic approach adopted by the taxpayer applicants in the present proceedings as to the operation authoritatively of the Privy Council decisions in Broken Hill , Caffoor and Hope might be thought to have at best debateable viability, particularly if account be also taken of the nature and extent of the jurisdiction and functions exercised by the tribunals etc from where at least the litigation in Caffoor and Hope originated. 113 To the extent that it is necessary or appropriate to characterise the juridical basis for the conclusions which I have reached, I would primarily invoke the operation of the overreaching doctrine of abuse of process illustrated from the dictum I have cited from Spalla . The Commissioner acknowledged that the taxpayer applicants did not commit at least to any explicit agreement to the effect that the outcome of the earlier Spassked proceedings, relating as those proceedings did of course to the 1992 fiscal year, would govern the resolution of the income tax issues arising in relation to the fiscal years presently in issue. If I may be repetitive in the light of the complexity of the circumstances the subject of the proceedings, those fiscal years were as to Spassked as taxpayer, the fiscal year 1994, and as to each of IEF and QTH the fiscal years 1991, 1993 and 1996. In relation to those three latter fiscal years, for what it may matter, it is unclear whether Spassked transferred to IEF and QTH respectively, pursuant of course to the tax loss provisions in favour of wholly owned subsidiaries pursuant to Subdivision A of Division 3 of Part III to the Tax Act, the whole or part only of the tax losses for the time being prevailing in respect of those three fiscal years. In any event, there is much to be said for the view that although the issue arising in the earlier Spassked proceedings concerned in a jurisdictional sense the 1992 fiscal year, the resolution of that issue by the finding of the Federal Court at first instance and on appeal occurred in the context of the Federal Court's findings in relation to the critical six fiscal year period from 1988 to 1992. Moreover as I have also already indicated, and for what it may ultimately matter, there is something to be said to the effect, again from the context of the reasons for judgment of that earlier 1992 fiscal year litigation, that the outcome thereof would implicitly govern the resolution of the issues arising in relation to the five remaining fiscal years as were by then also in dispute with the Commissioner at the instance of Spassked, IEF and QTH. Be that last observation as it may, any such wider implication is not essential to the Commissioner's present case for summary judgment. What the taxpayer applicants presently seek to do, by their pursuit of the present proceedings, is to litigate issues of a dimension that have been resolved, in substance and reality, in and by the earlier concluded Spassked proceedings, with the consequence that the Commissioner would be therefore ' troubled twice for the same reason ', to adopt Lord Hoffman's description in Arthur JS Hall , should the present summary judgment application brought at the instance of the Commissioner not be upheld. So much attracts the adverse operation of the doctrine of abuse of process. 114 As to the further operation of the doctrine of estoppel generally, the earlier concluded Spassked litigation, albeit litigated in the immediate context of the 1992 fiscal year alone, extended in at least legitimate evidentiary scope to circumstances falling within relevant periods of time both preceding and following that fiscal year, such as to encompass each of the six fiscal years the subject of present critical disputation. I use that expression to describe when the operation here of s 51(1) took effect, and not when the losses sustained were transferred by Spassked to IEF or QTH (as the case may be). The Commissioner has a viable basis for the case articulated to the effect that at issue in the earlier concluded Spassked proceedings, both at first instance and on appeal, was whether '... the occasion of each outgoing of interest was to be found in those shares being deliberately non-income producing for the foreseeable future', that articulation being related to the six fiscal years from 1988 to 1994. Once that finding is open and should be made, so much operates to impute relevantly at least an Anshun estoppel in favour of the Commissioner, and I think also an issue estoppel. I have already extracted material reflective of the implementation, on Spassked's part, of that vitiating objective or purpose on Spassked's part in terms of s 51`(1) of the Tax Act. The Spassked decision at first instance and on appeal has finally and conclusively established the basis for upholding the Commissioner's strike-out application, to paraphrase to the extent in particular italicized the description of Dixon J in Blair v Curran at 532-533, albeit articulated in the context of discussion of issue estoppel. That juridical expression may be contrasted with what was described by the Privy Council in Hoysted at 304 as '... a matter... only incidentally or collaterally related to the point actually discussed and litigated'. Consistently however with the reasoning I have thus far sought to articulate generally in my approach to the taxpayer applicants' case, I think that the preferred analysis should perhaps be that of issue estoppel rather than Anshun estoppel, if a choice between the two is mandatory. That is because what arose as the central issue in the earlier concluded Spassked proceedings, and in relation to which the general body of evidentiary material was directed, was the nature and extent of Spassked's business operations and activities for the six fiscal years 1988 to 1994, albeit in order to determine the implications of those operations and activities to the 1992 fiscal year. The business operations of Spassked from 1 July 1991 to 30 June 1992 did not of course occur in a business vacuum in any operational sense, but in the wider context of continuing business activities undertaken over at least those six fiscal years inclusive of the 1992 fiscal year. In those circumstances I would characterise as the issue in substance and reality arising, in relation to which the earlier Spassked proceedings were conducted, as related to and bearing upon the scope of those fiscal years inclusive at least of the 1992 fiscal year. The description of Dixon J in Blair v Curran accommodates the resolution of that issue in favour of the Commissioner, for the reasons I have already outlined. 116 Additionally or alternatively, the Commissioner contended that the requirements of Anshun estoppel have been satisfied. They are not requirements which must necessarily operate in a mutually exclusive way or to a mutually exclusive extent in relation to any other juridical notion of estoppel or for that matter to abuse of process. The conclusion of the Federal Court in the earlier Spassked proceedings, ultimately in relation to the 1992 fiscal year, was formulated in a context of findings wherein it would have been unreasonable not to rely on (to adopt the Anshun expression) the evidence related to the six yearly period of time measured by the evidence adduced in the context of those proceedings, and duly accepted by the primary judge and the Full Court. Although the incidence of income tax is normally geared to a particular fiscal year, the evidence as to a taxpayer's conduct of business operations of a longer period of time may well throw critical and decisive light upon the fiscal nature or fiscal consequences of that taxpayer's dealings or conduct related to that fiscal year. So much reflects the ultimate findings of the earlier concluded Spassked proceedings, framed as the same were by reference to the 1992 fiscal year, and based upon the evidentiary findings related to the six fiscal years from 1988 to 1994. 117 The Commissioner's case for summary judgment is required in principle to be ' clearly demonstrated ', and ' very clear indeed ', and is inhibited by the need for ' exceptional caution ' by the Court ( General Steel and Dey ). As I have earlier recorded, the Commissioner's case is not sought to be established on the footing of the doctrine of res judicata as applied in the common law of Australia, and which normally involves the merger of causes of action into judgments (compare Henderson at 114-115). Apart from abuse of process, the Commissioner's case is founded upon the doctrine of issue estoppel as well as Anshun estoppel, as those doctrines have been formulated and applied in Australia by judicial dicta . In the case of issue estoppel, I have earlier cited the well known dictum of Dixon J in Blair v Curran to the effect that it is necessary to expose ' a state of fact or law... alleged or denied the existence of which is a matter necessarily decided by the prior judgment', being a matter ' fundamental to the decision arrived at' , and not merely matters of fact or law which are ' subsidiary or collateral ', or 'concern only evidentiary facts and not ultimate facts... '. 118 Further as to the operation in Australia of both issue and Anshun estoppels, the latter having been described by Gleeson CJ in Murphy at 286 as ' a wider form of estoppel' , the Commissioner contended that the critical findings of the earlier concluded Spassked proceedings I have extracted also related to or involved 'ultimate facts which form ingredients in the cause of action' ( Blair v Curran at 532), and which were so closely connected with the subject matter of the earlier concluded Spassked proceedings that it was to be expected that the same would be subsequently relied on by the Commissioner in relation to fiscal years additional to 1992 (see again the full context of the dicta I have earlier cited from Anshun and Henderson ). I further bear in mind that issue estoppel operates in relation not just to the prior litigating parties but also to their respective privies ( Rogers ), and hence persons or entities claiming under or through or by virtue of the legal rights of such parties ( Effem ). I think that it should be concluded that each of the taxpayer applicants qualify as privies of each other, and of their common wholly owning parent IEL, for the purposes of the operation of doctrines as to issue estoppel and Anshun estoppel, being a qualification in any event not seemingly required to be fulfilled in the case of the wider and more comprehensive notion of abuse of process. Each of IEL and its wholly owned subsidiaries here involved, being of course each of the taxpayer applicants, was subjected to the evident decision-making corporate mind of IEL as parent company. 119 At least the primary case of the taxpayer applicants, in relation to the principal income tax issue raised by them, was as I have recounted, to the effect that the earlier concluded Spassked proceedings involved an 'essentially different question' for instance to the issues falling for resolution at the instance of the Commissioner, because the issue there falling for determination concerned a different fiscal year, that being of course 1992, and further that what occurred in those earlier proceedings could not 'elevate the decision to cover matters that were not before the Court as part of the proceedings'. The matters so referred to as 'not before the Court' in the earlier concluded Spassked proceedings were submitted by the taxpayer applicants to be the matters concerning income tax deductibility related to losses sustained by Spassked in respect of the 1991, 1993 and 1994 fiscal years (and subsequently as to the 1991 and 1993 years as to losses transferred to IEF and QTH), and the 1996 fiscal year to the extent that the same related to losses also sustained earlier by Spassked and transferred to IEF. In that context, the taxpayer applicants submitted that judicial findings made in the context of income tax or other annual revenue disputes could not lawfully create estoppels in relation to the resolution of fiscal disputes arising between the same revenue authority and the same taxpayer(s), or its or their privies, in respect of any fiscal year subsequent to that earlier fiscal year in relation to which any such prior resolution originally occurred. No distinction was drawn by the taxpayer applicants between a dispute involving an earlier fiscal year falling for resolution and a dispute involving a subsequent fiscal year falling for resolution. Both of those situations were here involved by reason of the estoppel relied upon arising in respect of the 1992 fiscal year by reference on the one hand to the 1991 fiscal year and on the other hand by reference to the 1993 and 1994 fiscal years (and also the varying circumstance of the 1996 fiscal year). The taxpayer applicants sought to invoke reliance for those propositions primarily of course upon the ratio of the Privy Council decisions in Broken Hill and Caffoor and of the House of Lords decision in Hope , and what it contended to be the limits of the doctrine as to privity in relation to estoppels. 120 As I have earlier pointed out, the controversy the subject of each of those three English decisions had its origin in the findings of an administrative tribunal, or otherwise relatively speaking inferior forum, in either case which exercised a decision-making function not comparable here with that of a superior court of record, such as the Federal Court of Australian in the case of the earlier concluded Spassked proceedings at first instance as well as on appeal, or such as a Supreme Court of any of the States of Australia. There would be moreover a measure of unreality and illogicality in any juridical contrast being made (as the taxpayers sought to do), in the context of disputed income tax proceedings such as was involved in relation to Spassked for the 1992 fiscal year, by reference to the resolution of a fiscal dispute related to a prior fiscal year in contrast to a subsequent fiscal year, in circumstances where the dispute is litigated in respect of fiscal years both prior and subsequent to that of the fiscal year of precedent relied upon as reflective of the conduct the subject of alleged estoppel. I should refer in that regard additionally to the finding appearing in the joint reasons for judgment of Hill and Lander JJ in the Full Federal Court in Spassked at [113] that '... the proposal was designed to ensure, and its implementation did ensure, that at no relevant time could it be said that Spassked incurred in the years of income interest on moneys used by it to acquire shares in the course of any activity carried on... in the course of gaining or producing assessable income...' . 121 Other considerations and findings of the Full Court in Spassked, referrable implicitly and explicitly to circumstances prevailing both prior, during and subsequent to the circumstantial scope of the 1992 fiscal year, serve to demonstrate the unreality, as well as the misconception, inherent in the taxpayer applicants' case for the exclusion in principle of the operation of the doctrines of issue estoppel and Anshun estoppel (additionally of course to abuse of process) from consideration in relation to the Commissioner's present application for summary judgment. The complex processes of judicial consideration and findings, undertaken by Lindgren J in his reasons for judgment in Spassked at first instance, and subsequently by the Full Court on the appeal upholding his Honour's decision, demonstrate the inherent inapplicability, in relation to circumstances such as here present, of the reasoning in, and the ratios of, Broken Hill, Caffoor and Hope in the Privy Council and House of Lords respectively, based as each decision was of course on the principle there enunciated as to each new or successive fiscal year of rating or taxing in dispute constituting an inherently new or different question or issue from that the subject of any preceding (or for that matter following) fiscal year. If I may be repetitious, the rating authority in Broken Hill failed in the Privy Council upon the footing that the prior majority decision of the High Court made in its favour had related '... to a new question, namely, the valuation for a different year and the liability for that year' . 122 The incidence of assessments to income tax, in contrast at least to some other revenues, is referable to activity or activities which may occur or extend over an entire fiscal year, but the life of such business activity would normally extend over more than one fiscal year, that is to say, for the duration of the conduct of relevant business operations. More frequently than not would that in fact be the case. In those contexts, an estoppel may be seen to crystallise by reference to fiscal consequences flowing from the nature or incidences of the operation or conduct of a business over the life thereof or over the life of aspects thereof. Hence the conceptual difficulty in equating the circumstances, for instance, of a valuation of property having an operation for the ensuing annual period of time with the circumstances of business activity or activities in operation over a period of time which embraces a particular fiscal year. A valuation of a property for annual rating purposes, whatever be the criteria therefore, understandably would obviously tend to involve distinguishable or different implications for the exaction of revenue then the conduct of business operations for the gaining immediately or ultimately for the derivation of assessable income. Those factors further tend to demonstrate the inherent validity in reasoning pursued by the Commissioner in support of the case for estoppel in circumstances such as here postulated, being circumstances of six fiscal years of continued operation of business activity. 123 The predication of the taxpayer applicants' case boiled down to or at least involved the proposition that although the circumstances of business operations of the 1992 fiscal year, in relation to which the previous Spassked proceedings were determined, remained essentially unchanged in scope in the course of the subsequent fiscal year or years the subject of ongoing dispute, and moreover remained unchanged from the circumstances of the prior fiscal year or years, any purported findings in line with such subsequent or prior circumstances cannot govern or control that taxpayer's entitlement to fiscal determination de novo in respect of the later fiscal year, freed from the constraints of estoppel. It is true that that aspect does not seem to have had any weight attached to it in the other decision of the Judicial Committee of the same year, the Broken Hill case. But there the point did not call for, or receive, any full attention. I say nothing more about this. It is not the point before us and, if it even arises, it will need separate consideration. The factor merely as to the existence of different fiscal years of income in contest to that of 1992 is said by the taxpayer applicants to be enough to constitute in law a new issue or dispute required to be determined, freed from the restraints of operation of the doctrine of estoppel, and by reason of the ratios of the Privy Council and House of Lords decisions respectively in Broken Hill, Caffoor and Hope . The consequences of that proposition of the taxpayer applicants being correct in principle for the purposes of the law of income tax have radical implications in relation to issues arising in litigious circumstances such as the present, involving as they would the further hearing and determination of the same substantial scope of evidence, or virtually so, as was adduced in the context of the earlier concluded Spassked proceedings. 125 I have reached the conclusion that the Commissioner has established a viable case for summary judgment upon the basis of estoppel arising upon or out of the circumstances falling within the scope of the findings of this Court made at first instance, and subsequently by way of confirmation on appeal, in the context of resolution of the earlier concluded Spassked proceedings, that is to say of course, the circumstances the subject of the Federal Court's findings at first instance and on appeal relevantly to the period of six fiscal years from 1988 to 1994, and the fiscal implications and consequences of those circumstances. Unlike fiscal litigation involving or relating for instance merely to quantifications of value of realty or personalty, or of losses and outgoings otherwise uncontroversial in character, the resolution of the earlier concluded Spassked proceedings required the Federal Court's consideration of a spectrum of circumstances relating to the business operations of Spassked which had taken place in substantial commercial contexts, being circumstances which extended in scope beyond the duration of the 1992 fiscal year, antecedently as well as subsequently. It makes no sense, nor is there justification moreover for the consequential requirement, that the Commissioner submit to what doubtless would be a further lengthy and costly Federal Court hearing, and further curial decision-making, in relation to what would require and involve the tender and judicial consideration once more of a significant amount of viva voce and documentary evidence based on, or arising out of, events which occurred and matters which were undertaken in relation to fiscal years both prior and subsequent to 1992, when that scope of evidentiary material has been already afforded the Court's extensive scrutiny and findings both at first instance and subsequently on appeal. I refer of course in that regard to the entire six fiscal years from 1988 to 1994 (inclusive). Further would that be so in the present context of events, if the inference reasonably open to be drawn is that the previously concluded Spassked proceedings in relation to the 1992 fiscal year were in substance and reality in the nature of a test case implicitly intended to resolve all of the outstanding objections to assessments lodged by the applicant taxpayers with the Commissioner, being an issue strictly speaking unnecessary for me to resolve. 126 My primary juridical basis for granting or upholding the Commissioner's application for summary judgment is that of abuse of process. The principles for the operation of that doctrine, outlined in the dicta I have earlier cited from Walton and Spalla , are in my opinion satisfied in relation to the complexity of circumstances I have earlier recorded in these conclusions and which are based upon the findings of the Federal Court at first instance and appeal in the earlier concluded Spassked litigation. If I may be repetitive, the case which the taxpayer applicants would seek to pursue by their amended statement of claim constitutes and involves in substance and reality an endeavour to re-litigate issues and disputes which have been already addressed and resolved by this Court in and by the findings made in the earlier concluded Spassked proceedings, at first instance and on appeal. Yet the taxpayer applicants would seek by the presently structured proceedings, once again of course in the Federal Court, to trouble the Commissioner twice, and to do so for essentially the same reasons and on essentially the same evidentiary structure, albeit involving differing fiscal years to 1992. Those issues or disputes would boil down to the deductibility or otherwise of interest payable on the borrowings of Spassked obtained from a corporately related entity or entities, being borrowings undertaken during the period of time from 1 July 1988 to 30 June 1994, and aggregating (as I have earlier detailed) the sum of $6,527,082,709.00. Those issues and disputes were indeed raised and resolved in the context of the earlier concluded Spassked proceedings, which ultimately boiled down to the issue whether or not interest on such borrowings were deductible within the scope of operation of s 51(1) of the Tax Act in relation to the fiscal year 1992. 127 If I may be once more repetitive, the Federal Court has already addressed essentially the same circumstances in the context of the earlier concluded Spassked proceedings, being circumstances which prevailed throughout the six fiscal years embracing 1991, 1993 and 1994, as well as of course the critical fiscal year 1992. Those circumstances were resolved at first instance and on appeal, being the circumstances falling within the further scope of the six consecutive fiscal years addressed by the comprehensive evidence tendered and findings made in those proceedings. Hence as the Commissioner has emphasised and as I have earlier recorded, if the present summary proceedings at the instance of the Commissioner were to be dismissed, the Commissioner would thereafter be vexed twice by a continued involvement in the further lengthy proceedings in this Court which the taxpayer applicants have set in train, and there could conceivably occur outcomes involving inconsistent judgments. 128 Apart from what I would conclude in favour of the Commissioner to have been an abuse of process, I would further find that at least the ground of Anshun estoppel has been additionally established by the Commissioner in the circumstances I have already recorded and established in these reasons. The inference is rightly open to be drawn, from the conduct and events of the earlier concluded Spassked proceedings, that it was necessary or at least appropriate for the Commissioner to require the Federal Court to decide, and indeed the Federal Court did decide, the issue as to deductibility sought by Spassked in respect of the fiscal year 1992. To paraphrase the language of Anshun, for the present proceedings to be allowed to proceed to trial would necessarily and inherently involve, as well as require, the raising once more for consideration and determination by this Court of issues and related matters cardinal to the claims and contentions which attended the earlier concluded Spassked proceedings, and in particular the claim at least inherently that the decisions the subject of those proceedings made at first instance and on appeal were erroneous. What was so resolved and determined by the earlier concluded Spassked proceedings, in relation to the context specifically of at least the six fiscal years I have identified and discussed, did not relate merely to ultimate facts. To determine and resolve income tax deductibility in respect of a single fiscal year, such as previously occurred in relation to the 1992 fiscal year in respect of Spassked, in the context of continuing business operations and activities of a given taxpayer, particularly business operations and activities conducted on a substantial scale, would normally require, necessarily as well as expediently, a broad analytical sweep of those operations and activities, and in the case of continuing businesses in particular, such as were here apparently involved, of operations and activities undertaken both prior and subsequent to that fiscal year. In the circumstances of modern business and commercial undertakings involving corporate groups which conduct continuing or repetitive business transactions inter se , that sphere of curial considerations may necessarily well require the consideration of transactions, not just of individual corporate taxpayer's activities, but also the transactions of its wholly related group companies or so-called privies. 129 It follows further of course from the foregoing conclusions I have reached in these reasons adversely, in the first place, to Spassked in relation to the fiscal years I have considered and addressed, being fiscal years apart from but placed both prior and subsequently to that of 1992, that IEF and QTH would not be entitled to deductions pursuant to s 80G of the Tax Act in respect of losses transferred to each of them respectively from Spassked in respect of any of those fiscal years the subject of my review. 130 In the result in my opinion, the Commissioner's application for summary judgment should be granted with costs. I will direct that the Commissioner bring in draft short minutes of order so framed as to give effect to these reasons, and to do so on a date to be fixed by arrangement with the parties and the Court. The Commissioner must have the costs of the proceedings to date, inclusive of the costs related to the present summary application. I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | large corporate group inter-group transactions undertaken over six consecutive fiscal years transactions involving inter-group interest bearing borrowings principally by one group member and transfers of tax losses arising out of those borrowings to other group members prior primary and appellate claims by proceedings in federal court made by borrowing member against the commissioner for interest deductibility in respect of one fiscal year decision at first instance and on appeal in relation to that fiscal year adverse to that single group member findings made in context of those proceedings as to assessability to tax of that group member in respect of some transactions for differing fiscal years after conclusion of single fiscal year further proceedings commenced by the same corporate group member together with other corporate group members in respect of transactions involving borrowings and transfers of tax losses in respect of antecedent as well as subsequent fiscal years to that resolved by federal court in favour of commissioner whether issue estoppel, anshun estoppel and/or abuse of process should operate in favour of commissioner in respect of deductions for losses of antecedent and subsequent fiscal years meaning of privies authority in australian courts of earlier decisions of privy council and house of lords summary judgment application of commissioner granted income tax |
The registrar also made an order fixing the costs of the plaintiff, the Deputy Commissioner of Taxation (the Commissioner). At the time of those orders, the Company was the subject of voluntary administration. On 29 October 2007, Mr Mitchell Ball (the Administrator) was appointed as administrator pursuant to the Corporations Act 2001 (Cth) (the Act). The Company opposed the winding up application on the ground that it had applied for an adjournment of the winding up application pursuant to s 440A(2) of the Act. Under that provision, the Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up. The registrar had evidence of a report by the Administrator to creditors, to be considered at a meeting of creditors to be held at 11 am on 23 November 2007. After the orders were made, an application was made by notice of motion filed by the Administrator. The Company, the Commissioner and the Administrator were joined as respondents. Amongst other things, the notice of motion sought review of the decision of the registrar to refuse an application for an adjournment. The notice of motion also sought orders that the registrar's orders be set aside and that the proceeding be adjourned until 30 November 2007. There is a question as to the competence of the motion including the standing of the Administrator in his own name to seek such orders. Late on 16 November 2007, a judge of the Court granted leave for the motion to be filed and abridged the time for service on the basis that the motion would be returnable before the Corporations Duty Judge at 2.15 pm today, when the matter came before me. There is some further evidence before me that was not before the registrar. It is clear that an application for review involves a hearing de novo . An application for review, in my view, may be made by the company that is the subject of a winding up order. I consider that there is a residual power in the directors, or the administrator in a case such as this, to make such an application: otherwise a right of review by way of a hearing de novo would be almost nugatory. Counsel for the Commissioner has urged upon me the conclusion that the material that is to be put before the creditors, at the meeting on Friday, is inadequate. In particular, the Commissioner points out that there is insufficient evidence of the source of funds that would be provided in the event that a Deed of Company Arrangement was approved by the creditors. (2) The deed fund would be provided by an initial payment of $50,000, followed by ten monthly instalments of $20,000. (3) The director of the Company, and related parties, will not claim for debts amounting to approximately $1.62 million. (4) The director will pay a Director Penalty Notice in the sum of approximately $160,000 issued by the Australian Taxation Office within one month. (5) The director will not claim as a creditor for the payment of the Director Penalty Notice. The Administrator estimated that, if such a Deed of Company Arrangement were approved, the unsecured creditors would receive approximately 13.73 cents in the dollar whilst if the Company is wound up, they will receive nothing. The Administrator recommended that the creditors accept the proposed Deed of Company Arrangement. No draft deed has been provided at this stage. There is substantial dispute as to the indebtedness of the Company to the Commissioner. The proposal also involves a guarantee being given, by the director of the Company, by his wife and by a related company, of the payment of the deed fund. The Commissioner criticises the proposal on the basis that there is no reliable evidence as to the financial position of the director, his wife or the related company, to indicate that they would be in a position to meet any claim on any such guarantee. Further, the Administrator in his report indicates that the books and records of the Company have not been kept in accordance with s 286 of the Act, in so far as they do not correctly record and explain all transactions and the financial position and performance of the Company and do not, at present, enable true and fair financial statements to be prepared and audited. However, the Company's accountant has indicated that material would be provided in time for appropriate accounts to be made available to the creditors at the meeting on Friday. The assets of the Company, at present, are less than $20,000, although the Administrator's report indicates that, in the last 12 months, substantial assets of the Company were transferred to its director in exchange for a payment of $800,000, although the details of the payment are not explained. On the material that is presently available, I would not be satisfied that it is in the interests of the Company's creditors for the Company to continue under administration rather than be wound up. However, if appropriate evidence were available to indicate that there is a realistic prospect that the proposed deed fund could be provided and that the financial position of the Company, as estimated by the Administrator is correct, then it could well be in the interests of the creditors for the Company to enter into a Deed of Company Arrangement. That is to say, 13 cents in the dollar would be better than nothing. The Commissioner's opposition is really based on the premise that there is no realistic possibility that the proposed fund would be made available. Rather than lose the opportunity of the fund being made available by refusing any further adjournment of the application for review and by confirming, or making, a winding up order, I consider that it is presently appropriate that the director and the Administrator at least be given the opportunity of satisfying the creditors that there is a reasonable prospect of the deed fund being made available. As I have said, there are technical difficulties with the proceeding as it stands. I consider that the Company should be joined as an applicant for review. I also consider that it would be appropriate to stay the orders made by the registrar last Friday up to 5 pm on 23 November 2007, and to adjourn the hearing of the application for review until 2.15 pm on that day, to enable the parties to report as to the result of the proposed meeting. However, in the meantime, the Administrator must ensure that there is placed before the creditors any criticism or other submissions that the Commissioner wishes to make in opposition to the proposed Deed of Company Arrangement. I propose to make orders to give effect to those propositions. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | winding up review of decision of registrar to refuse application for adjournment of winding up application under s 440a(2) of the corporations act 2001 (cth). corporations |
In that decision the Tribunal concluded that as from 3 December 2001 Ms Davies had been partially incapacitated for work as a result of an injury she had suffered and was entitled to compensation in respect to that injury. 2 Comcare seeks to appeal from that decision. "NWE" is the amount of the employee's normal weekly earnings. The legislative intention of this provision is presumably to ensure that an employee is not entitled to retain the whole of his actual earnings and also to retain 100% of his normal weekly earnings: Comcare v Line [2002] FCA 553 at [60] per Carr J. And, the amount that an employee may be " able to earn " is not to be equated with profit: J & H Timbers Pty Ltd v Nelson [1972] HCA 12 ; (1972) 126 CLR 625. The earning capacity of a man as a worker is measured by the remuneration that is the fruit of his labour, his wages or their equivalent. 4 The application of this provision to Ms Davies' claim for compensation arose within a factual context which is not now in dispute. 5 Ms Davies had been employed as a teacher. She commenced teaching in 1971. Between late November and mid December 1996 she took a group of students on an excursion to Indonesia. One of the students became extremely ill and had to be evacuated. The student was in such a condition that at times he lost consciousness and stopped breathing. It was that incident which caused stress to Ms Davies, to the extent that by 1998 she " was unable to deal with the hierarchy of the Department and she continued to feel as though she had done something wrong ". The Tribunal found that she was " incapable of employment in a hierarchical structure such as the Public Service ". 6 By 1999 Ms Davies and her husband had investigated the prospect of establishing a business. She had written to Comcare stating that she could not " return to my normal work.... I am at the stage of 'new work, new employer' but want to employ myself (don't trust anyone and I'm almost 50 yrs of age ". She had had a long interest in Indonesia and its culture and set up a business " involving the marketing of Indonesian artefacts, advice on Indonesian-type landscaping, and the provision of support services to teachers of Indonesian ". 7 In 1999 she was offered, and accepted, voluntary redundancy. It was not disputed on behalf of Ms Davies that employment in her own business, Bali Gardens, should be regarded as suitable employment for the purposes of section 19. On the basis that the business enabled Ms Davies to utilise her experience with the Indonesian language and culture in a non-hierarchical environment we are satisfied that this was a proper concession to be made. B.3. What amount was Ms Davies able to earn in her employment in her own business during the period 28 September 1999 and 19 April 2006? On the basis of the report of Sinclair King of 16 August 2004, we are satisfied that during the financial years ending June 2001---2004 inclusive, Ms Davies made a loss in operating the Bali Gardens business. We are satisfied therefore that the amount which Ms Davies was able to earn in her own business during each of the financial years referred to was nil. Although we do not have available the evidence to enable us to make such a finding, it is likely that the results for the remainder of the period under consideration were the same. 69. We have considered the report of Mr Bilboe that in his opinion Bali Gardens could be "a lucrative small business. " However this comment refers to the potential of the business rather than its earning capacity in the period under consideration and in any event, on the evidence before us, Mr Bilboe is not qualified to express this opinion. 10 Comcare does not put in issue the conclusion that Ms Davies' chosen business venture, the Bali Gardens venture, was " suitable employment ". Its contention is that the Tribunal failed to consider whether there was other " suitable employment " which could be pursued by her. By failing to consider other employment the Tribunal, it is said, failed to complete the comparative exercise mandated by the definition of " AE " in s 19(2). 11 Nor does Comcare put in issue the quantification of the monies earned by Ms Davies in her Bali Gardens venture. Its contention is that the Tribunal misconstrued " AE " in equating operating loss with ability to earn. Therefore, she is not entitled to compensation under Part II , Division 3 of the SRCA. (b) Alternatively, the applicant has an ability to earn an amount in suitable employment equal to her NWE as a secondary school teacher for the purposes of sub-section 19(4) of the SRCA and is not entitled to compensation under Part II , Division 3 of the SRCA. (c) Alternatively, the applicant has failed to continue in suitable employment for the purposes of sub-section 19(4) of the SRCA and is not entitled to compensation under Part II , Division 3 of the SRCA. (d) Alternatively, an ability to earn should not be confused with ability to run a profitable business: Hooper and Comcare [2001] AATA 548 ; (2001) 33 AAR 326. As such, any losses incurred by the applicant in running her business, Bali Gardens, ought not be taken into account in calculating AE for the purposes of subtracting any AE from the applicant's NWE. See also sub-section 19(4)(g) of the SRCA. The decision under review should be affirmed. 49. The respondent reserves the right to amend this document. 13 In addition to that Statement , there was evidence before the Tribunal in the form of invoices issued by Bali Gardens for work performed by Ms Davies. Those invoices included work in respect to the design and maintenance of gardens and, relevantly, invoices for giving lectures on Hinduism and the " professional development for teachers of Indonesian, grade 5 ". I knew what to do, but when it came to actually doing it it didn't happen. You ran public exhibitions, like the Floriade one, didn't you?---that's no problem. Yes. You have got no problem with public work when it is impersonal in that sense, is that right?---That's correct. Yes, yes. Presumably when you set out with the business though you expected to make some money as well?---I wanted to, yes. You set your hourly rate at $120 an hour?---I advertised for certain things at whatever, yes. Not in the gardening at 120. That was in the teaching aspect, was it?---That was in the teaching groups; it was only a workshop thing that would have been that. Okay. And $30 per hour for tuition for students?---Yes. And do you remember what your hourly rate was for the garden design and so on?---If I was doing maintenance work at somebody's house it was $35 an hour or --- but most of the time you have to put in a quote; that's the way it worked. And if I did a design, I started off at $500 I think --- no, I started off earlier --- lower than that, I started off at $250, but as I progressed and I got more skills under my --- and I was successful, I made that to $500 and then it jumped to about $800, then it jumped to $1000. 17 Comcare, it is considered, faces a significant difficulty in advancing the former contention. This difficulty is the simple fact that it did not raise for resolution before the Tribunal any contention that there was " suitable employment " other than the venture undertaken by her, namely the Bali Gardens venture. 18 It is not considered that any such contention was raised, or at least adequately raised, in Comcare's Statement of Facts and Contentions . Contention 1(b) may have obliquely raised the submission -- but not in any manner in which it is considered that Ms Davies should have addressed the issue further in her evidence or in submissions. 19 Even where one or other or both parties are represented before the Tribunal, a party may depart from the contentions it has identified in its written Statement . Indeed, to conclude otherwise may confine the ability of the Tribunal to discharge its principal function of making the " correct or preferable decision ": Drake v Minister for Immigration & Ethnic Affairs (1979) 46 FLR 409 at 419. Factual or legal contentions or issues different to those raised in a Statement of Facts and Contentions may emerge in any one of a number of ways, including from questions asked by the Tribunal or that arise from evidence given and subsequent cross-examination. Facts or contentions different to those raised in a Statement of Facts and Contentions may also arise from the manner in which a case is opened or even, although far from desirable, in closing submissions. 20 In the present proceedings before the Tribunal, however, such questions as were asked of Ms Davies in cross-examination, it is considered, could not fairly be construed as raising for resolution the potential for Ms Davies to engage in other forms of suitable employment. Neither the invoices disclosing monies charged for lecturing or the questions asked of her during cross-examination would have alerted her to the possibility that Comcare could be suggesting the development of that part of her abilities as other " suitable employment ". 21 No " question of law ", it is considered, arises in circumstances of the present appeal where the Tribunal did not resolve an issue or did not make findings of fact in respect to other forms of " suitable employment " where no such contention was advanced before it. " Some difficulty ", it has been said, must arise " in finding as 'error of law'... the failure in the Tribunal to make a finding first urged in this court ": Federal Commissioner of Taxation v Raptis (1989) 19 ALD 726 at 728 per Gummow J. Appl'd: Chen v Minister for Immigration & Multicultural Affairs [2000] FCA 1901 at [88] ---[89], [2000] FCA 1901 ; 106 FCR 157 at 175---6 per Carr J. 22 A Statement of Facts and Contentions should obviously not be construed with the constraints appropriate to a pleading in a Superior Court. Nor should a Statement of Facts and Contentions be filed with such generality that all issues which potentially may emerge will be held subsequently to fall within one or other of the matters set forth. But it should be drafted with a sufficient level of precision to enable both an opponent and the Tribunal to know the facts and contentions being raised for consideration. The procedures of the Tribunal are sufficiently flexible to permit of any subsequent need to revisit a Statement which has been filed if that is necessary to ensure that the " correct or preferable decision " is reached and reached in a manner which permits all parties to have a " reasonable opportunity to present his or her case ": Administrative Appeals Tribunal Act 1975 (Cth), s 39(1). Within those broad limits, the procedures followed by the Tribunal should be sufficiently flexible to permit new or additional contentions to be raised, where that is necessary to ensure that the Tribunal properly discharges its functions, and sufficiently flexible to ensure that contentions which may have been initially raised at the outset of proceedings are able to be later abandoned (eg, Comcare v Holt [2007] FCA 405 at [33] , [2007] FCA 405 ; 94 ALD 576 at 583 per Mansfield J). 23 Notwithstanding such flexibility, this first contention of Comcare is rejected. 24 But Comcare's alternative submission, namely that the Tribunal has impermissibly equated profit with an ability to earn, it is considered should prevail. Comcare's Contentions as filed with the Tribunal unequivocally asserted that Ms Davies had " an ability to earn in suitable employment ", and also that " an ability to earn should not be confused with ability to run a profitable business ". 25 Comcare's position on appeal is simply bolstered by the manner in which the Tribunal concluded in paragraph 68 of its reasons that Ms Davies had " made a loss in operating the Bali Gardens business " and that her ability " to earn in her own business during each of the financial years referred to was nil ". 26 In the absence of explanation, it would appear that the Tribunal has committed the very error now asserted by Comcare -- namely, the Tribunal has wrongly equated profit with ability to earn. The Walter Turnbull report clearly set forth for each of the years 2001 to 2005 inclusive total income ranging from $17,293 to $24,365; it also clearly set forth expenditure for each of the same years ranging from $18,196 to $31,925. None of these figures could be dismissed as of no significance. For each of the years, with the exception of 2005, expenditure exceeded total income such that there was a net loss. 27 In the absence of explanation, a conclusion on the part of the Tribunal that Ms Davies' ability to earn was " nil " could only have been reached by impermissibly equating ability to earn with profit. 28 The first Ground of Appeal should thus be allowed. 30 Comcare's written submissions in support of this Ground again reverted to its challenge to the Tribunal's assessment of Ms Davies' ability to earn being assessed at " nil ". Written submissions filed in support of the present appeal submitted that " the Tribunal has provided no reasons as to why the Respondent's ability to earn should, in this case, equate to the profitability of the Bali Gardens business ". Indeed in the absence of explanation, it has been concluded that the Tribunal has impermissibly equated ability to earn with profit or (in this case) net loss. For the purposes of the resolution of the present appeal it is sufficient to note that the reasons of the Tribunal are " meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed ": Minister for Immigration & Ethnic Affairs v Liang [1996] HCA 6 , 185 CLR 259 at 272. But it is equally important " to review the Tribunal's reasons to be satisfied that the Tribunal has in fact had regard to the matters which it must address ": Zhang v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 30 at [14] . 32 The extent of the reasoning provided in accordance with s 43(2B) must also be considered against the backdrop of the contentions advanced for resolution and the evidence presented. The Tribunal is exhorted by s 2A of the 1975 Act to " pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick ". When carrying out its functions the Tribunal is also obliged to " ensure that every party to a proceeding ... is given a reasonable opportunity to present his or her case ": s 39(1). The person who made the decision being reviewed by the Tribunal is also required to " use his or her best endeavours to assist the tribunal to make its decision in relation to the proceeding ": s 33(1AA). 33 The requirement imposed by s 43(2B) of the 1975 Act has to be applied in the factual context being considered and applied in a realistic and practical manner. One objective of that provision, of course, is " to make the system of appeals effective ": Roncevich v Repatriation Commission [2005] HCA 40 at [62] , [2005] HCA 40 ; 222 CLR 115. The adequacy of reasons provided, however, is also a matter of " substance ": Dodds v Comcare Australia (1993) 31 ALD 690. It is a pillar of the system of administrative decision-making by the Tribunal, and it is essential that the Court should insist on its fulfillment. But it is the substance of the obligation that matters. Indeed, as Lord Suniner pointed out in 55 Hontestroom v 55 Sagaporack [19271 AC 37 at 50, even a Judge's reasons on a question of fact will not be vitiated by "imperfections in form and expression". Section 43 is not to be construed in a pedantic spirit, but sensibly. If the Tribunal's reasons exposed the logic of its decision, and contained findings on those matters of fact which are essential to that logic, it will not be, easy to demonstrate a failure of compliance with the requirement to include "findings on material questions of fact". The requirement to provide " reasons " in the present context is equally as important as its obligation to set forth " its findings on material questions of fact " and the requirement to refer to " the evidence or other material on which those findings were based ". 35 If the Tribunal was to reach a conclusion that Ms Davies' ability to earn was in fact " nil ", and that such a conclusion was to be reached upon the basis of the evidence before it, it is considered imperative that the Tribunal set forth its findings of fact referring to the evidence it had in mind. Such evidence as was before the Tribunal, in the absence of explanation, would seem to dictate a contrary conclusion -- but what particular finding of fact should be made is a matter for the Tribunal. 36 It is not the fact that the Tribunal has not referred to such evidence as that set forth (for example) in the Walter Turnbull report which exposes a " question of law " ( SZEHN v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1389 at [58] per Lindgren J; SZHPI v Minister for Immigration & Citizenship [2008] FCA 306 at [15] ). The question arises by reason of the Tribunal not making necessary findings of fact and referring to the evidence upon which it makes such findings. Its failure to do so is a departure from the requirements imposed by s 43(2B) and renders " ineffective " the appeal process to this Court. In the absence of explanation, neither Ms Davies nor this Court knows how the Tribunal reached the conclusion that it did. In the absence of explanation, it would appear that the Tribunal has wrongly equated net profit with earning ability. 37 In some circumstances actual net earnings might be seen as reflecting an ability to earn: Cage Developments Pty Ltd v Schubert [1983] HCA 37 ; (1983) 151 CLR 584. . . there may well be cases in which the actual earnings of a business either represent the actual or potential earnings of a former worker during a period of partial incapacity. Where, for example, a business consists essentially of the provision of personal services by the former worker (eg a business of a sole plumber or casual gardener) and no significant investment of capital is involved, the actual net earnings of the business might properly be seen as representing the actual "reward for [the] labour" of the former worker (see J & H Timbers Pty Ltd v Nelson, at 652) during a period of partial incapacity. In such a case, if the former worker is carrying on business solely on his own account, the net earnings of the business might properly be seen as representing the "amount he is earning" in a business; if he is carrying on business in partnership or as an employee of a family company, the net earnings might properly be seen as representing the "amount he ... is able to earn" either in employment or in a business. The Tribunal has set forth a conclusion but none of the processes by which it reached that conclusion. 38 The second Ground of Appeal should be allowed. 39 It is unnecessary to place reliance upon a further submission advanced on behalf of Comcare that error on the part of the Tribunal is further exposed -- or at least supported -- by the failure of the Tribunal to make reference to s 19(2) in terms. Comcare sought to draw some support for its contention that s 19(2) had not been properly considered from the fact that the Tribunal expressly refers to s 19(4), but makes no reference to s 19(2). Section 43(2B) does not require the Tribunal to include or make reference to law or legal principles: cf McAuliffe v Department of Social Security [1991] FCA 268 ; (1991) 13 AAR 462 at 469 per von Doussa J. Had it been necessary to resolve this submission, it most probably would have been resolved against Comcare. Although not referring to s 19(2), it is evident from the Tribunal's reasons that it was directing its consideration to the subject matter of s 19(2) and applying its provisions to the facts before it. Hence the Tribunal referred to: " What amount, if any, was Ms Davies able to earn in 'suitable employment'? " It also gave consideration to, " What was 'suitable employment' for Ms Davies? ", and separate consideration to, " What amount was Ms Davies able to earn in her employment in her own business during the period 28 September 1999 to 19 April 2006? 41 The period for which compensation was payable ended on 19 April 2006. 42 On behalf of Ms Davies it was urged that Order 5 exposed but a clerical error and that the Tribunal intended to refer to 19 April 2006 and not 30 June 2004. No application, however, was made to the Tribunal for the Tribunal to itself correct what is now urged as a clerical error. 43 Any such clerical error, it is considered, is far from self-evident. The Tribunal's reasons at paragraph [68] draw a clear distinction between the financial evidence to which it was referring ending on 30 June 2004 and an express recognition that there was no " available evidence " upon which a finding could be made " for the remainder of the period under consideration ". That " period " is assumed to be the period referred to in the heading of the Tribunal's reasons as ending on " 19 April 2006 ". 44 Order 5, far from being a clerical error, is considered to be an order intentionally confined to a period ending on 30 June 2004. Order 5 stands in contrast to Orders 3 and 4 of the Tribunal's orders which do refer to 19 April 2006. 45 As it has been concluded that the appeal should be allowed, the further question as to how the Tribunal should proceed to quantify Ms Davies' ability to earn for the period ending on 19 April 2006 is a question which should be pursued with the Tribunal. In my opinion a party is not necessarily precluded by the conduct of his case before the Tribunal from arguing on "appeal" matters conceded below. If he is successful then the decision of the Tribunal may be overturned -- found in some way to be wrong in law, even though that error may have been substantially contributed to by the conduct of the case by the party in question. In other words, the conduct of the party's case before the Tribunal goes to this court's discretion as to what course it will take given that there has been an error rather than to the question as to whether the Tribunal really made an error. The case before this court is not merely one of parties agreeing upon what facts should be decided by the trier of fact, nor a case of facts, peculiarly within the knowledge of the party, being conceded. Rather, there was a clear statutory precondition upon which the Tribunal had to be satisfied and enough material and evidence before it to raise the issue independently of the parties' submissions. In these circumstances it was an error of law not to consider and decide the issue of immigrant status. Whether or not that error should lead to the decision of the Tribunal being set aside and the matter remitted to it depends, in my view, upon principles similar to those expressed by Dixon J in Burston's case, supra and by the same judge in Orr v Holmes [1948] HCA 16 ; (1948) 76 CLR 632 at 640: "to fulfil an imperative demand of justice". The present appeal, it is considered, is not such a case. Left unexplored with Ms Davies is what may constitute " suitable employment " other than her Bali Gardens business and the quantification of her ability to earn. Although these may be matters fundamental to the application of s 19(2), each is very much a factual matter which to date has largely been left unexplored in the evidence and is best left to the Tribunal to undertake. The fact that other issues have also been left unresolved by the Tribunal, only further reinforces the desirability of leaving all issues to the Tribunal to determine upon the basis of such further evidence (if any) as is considered appropriate. 47 It is considered that the appeal should be allowed. 48 As Comcare has succeeded on its appeal, although on only some of the submissions it has advanced for resolution, Comcare should have 75% of its costs. The appeal be allowed. 2. The decision of the Administrative Appeals Tribunal given on 3 October 2007 be set aside. 3. The matter be remitted to the Tribunal for further consideration in accordance with law. 4. The Respondent pay 75% of the costs of the Applicant. 5. Liberty is reserved to the parties to apply within 7 days should either wish to seek a variation of one or other of these orders. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | no question of law arises where tribunal does not resolve a contention not advanced before it suitable employment the significance of a statement of facts and contentions a contention not raised for resolution equating of " net loss " with " ability to earn " inadequacy of tribunal's reasons an absence of findings or reasons compensation |
Accordingly, the principal orders which are sought at this hearing are orders under section 411(1) of the Corporations Act 2001 (Cth) ("the Act"), that the plaintiff convene a meeting of members of the company and an order approving the explanatory statement for distribution to shareholders. The scheme is an acquisition scheme between the plaintiff, People Telecom Limited ("People"), and its members, under which all of the issued capital of People will be acquired by M2 Telecommunications Group Ltd ("M2") via its subsidiary M2 Telecommunications Pty Ltd. The details of the scheme and the relevant principles and other matters are fully set out in written submissions provided to me by Senior Counsel for People. In accordance with the usual practice, I have marked the submissions as MFI-1. Mr Oakes has taken me in some detail this afternoon through the scheme booklet and the evidence in support of the application. There are two matters in respect of which disclosure is made in Mr Oakes' written submissions. The first is that there is a break fee of up to $300,000 payable by People in the circumstances set forth in the Scheme Booklet. The maximum break fee that may be payable is in excess of the one percent guidelines referred to in the Takeovers Panel Guidance Note. However, the directors approved the break fee figure for a number of reasons which I shall refer to briefly. The details of the break fee are addressed in the affidavit of Mr Barry John Hamilton, who is the non-executive Chairman of People. Importantly, the break fee is not payable if the proposed scheme is not approved by the shareholders, thus it cannot be said to be a matter which could influence voting at the scheme meeting: see Re SFE Corporation Limited [2006] FCA 670 per Gyles J at [6] to [7]; see also Re APN News & Media Ltd [2007] FCA 770 ; (2007) 62 ACSR 400 at [43] . I am satisfied that there is sufficient disclosure of this matter in the Scheme Booklet. One of the matters which the directors took into account in coming to the view that the break fee is not excessive is that the break fee which is payable constitutes a reasonable amount to compensate M2 for the costs and disbursements incurred directly or indirectly by M2, as a result of the transaction not being implemented. Moreover, the scheme makes provision for a break fee to be payable to People by M2. It has been submitted that this circumstance provides for a degree of neutrality in the break fee provisions. People estimates the costs and expenses of the scheme process at approximately $500,000. This is another matter which the directors have taken into account in coming to the view that the break fee is not excessive. The second matter to which Mr Oakes made reference is the provisions contained in proxy voting deeds. Certain shareholders have committed themselves to voting in favour of the transaction. The proxy deeds make provision for this. The proxy commitments are not given for consideration, nor are they given to representatives of M2 or its subsidiary which is to be the acquirer. I have therefore come to the view that this is not a barrier to the making of the orders which are sought today. I do not consider that the proxy voting deeds would result in the need for convening of any separate class meetings. All of the other matters to which Mr Oakes took me this afternoon are in accordance with established procedures which have been considered in various authorities in this court and also in the Supreme Court of New South Wales. I am satisfied that the matters which are required to be proved at the first court hearing have been proved in the evidence to which I have been taken. There is no order which is sought in the orders I propose to make that go beyond existing practice. Otherwise, it is sufficient to say that all of the necessary matters have been covered in Mr Oakes' written submissions. Accordingly, I propose to make orders in accordance with the draft orders which I will sign and date and place with the court papers. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application to convene scheme meeting and approve explanatory statement maximum break fee payable in excess of takeover panel's one percent guideline break fee not excessive in the circumstances provision in proxy deeds for shareholders who have committed themselves in favour of voting for transaction application approved ss 411(1) , 1319 corporations regulations 2001 (cth) federal court (corporations) rules 2000 rules 2.15 , 3.4 (3)(b) corporations corporations act 2001 (cth) |
2 As the proceeding was commenced in the New South Wales Registry, Sydney is presently the ' proper place ' in relation to the proceeding (see the definition of that expression in O 1 r 4) and, unless an order is made to the contrary, the place of trial will be Sydney (O 30 r 6(1)). However, it is not necessary for the proceeding to be transferred to the Cairns Registry to enable the trial, or any part of it, to be heard in Cairns. The Court may direct that the trial, or any part of the trial, be held at a place other than the proper place (O 30 r 6(2)). In Andrew & Frewin Pty Ltd v Arrow Limited [1990] FCA 247 the Full Court observed that O 30 r 6 authorised the Court to take evidence in various cities so as to accommodate the needs of witnesses notwithstanding that a different city was the proper place. 3 In National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 19 FCR 155 the Full Court noted at 162 that the power conferred on the Court by s 48 of the Federal Court of Australia Act to direct that a proceeding or part of a proceeding be conducted or continued in a place specified in the order is in wholly unfettered terms. Their Honours observed that the power, which recognises the national character of the Court, should be exercised flexibly having regard to the circumstances of the particular case. Factors which the Full Court recognised as likely to influence the exercise of the power included the place of residence of parties and witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court itself. The Full Court noted that there is no onus of proof in the strict sense to be discharged by a party seeking to conduct or continue the proceeding in a place other than the proper place, but observed that the Court must be satisfied, after consideration of all relevant factors, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Maddocks does not have an office in Brisbane or Cairns. The applicants have retained a Sydney based barrister. The applicants accept that the cause of action arose in Cairns and that any evidence of fact required at trial is likely to be given by witnesses resident in Cairns. However, the applicants expect that it will be more difficult to find expert witnesses in Cairns or Queensland generally than in New South Wales or Victoria. 5 The second respondent, who is a director of the first respondent, lives in Cairns. The respondent's solicitors are Gadens Lawyers, Cairns. Gadens Lawyers advertises itself as a top-ten national firm, with staff and offices in every mainland state and with a national capacity in intellectual property. The respondents do not envisage that any matter pleaded by them is likely to require factual evidence to be called from a witness who is not resident in Cairns. They have not placed evidence before the Court, no doubt because of the early stage of the proceeding, touching on the residence or place of business of any expert witness who they may call. 6 If the proper place of this proceeding were to become Cairns the proper place would be a registry at which no judge is resident. It is likely that the matter would be allocated to the docket of a Brisbane resident judge. Although a Brisbane resident judge visits Cairns each quarter I cannot be confident that the visiting judge on all or any occasion would be the docket judge to whom the case would be assigned. As the Full Court in National Mutual stressed, this Court is a national Court. It is a court which makes regular use of video and telephone facilities for directions hearing and in which documents can be filed electronically or by facsimile transmission. A judge based in Sydney, like a judge based in Brisbane, is capable of travelling to Cairns should the proper management of the case so require. 7 Having considered each of the matters to which the Full Court drew attention in National Mutual , I am not presently satisfied that there is sound reason to direct that the proceeding be transferred to the Cairns Registry of the Court. I would have reached the same conclusion were the application made with respect to the Brisbane Registry. I do not rule out the possibility that the position could change. However, in my view, the proceeding can presently be suitably conducted in Sydney. I do not expect that there will be any difficulty in my giving the parties a convenient trial date when they are ready for such a date to be allocated. Should it appear, nearer the time for trial, that the balance of convenience suggests that the Court should take some or all of the evidence in Cairns or Brisbane, arrangements can be made accordingly. 8 For these reasons the application for the proceeding to be transferred to the Cairns Registry of the Court is dismissed. By consent it is ordered that the costs of this application be costs in the cause. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | application for transfer of proceeding to cairns registry of the federal court 'proper place' of the proceeding within the meaning of o 1 r 4 of the federal court rules is sydney consideration of the power of the court to direct that a proceeding be transferred to another place consideration of factors likely to influence the exercise of the court's power location of solicitors and barristers location of lay witnesses location of expert witnesses transferral of proceeding to a place where no judge is resident held: no sound reason to direct that the proceeding be transferred to the cairns registry of the federal court practice and procedure |
I noted in my reasons for judgment in [49], the amount at issue in this matter is insubstantial. Ms Keen had to come to the court in order to have the decision of the Tribunal as to the manner in which the review was to be heard under s 69A of the Administrative Appeals Tribunal Act 1975 (Cth) reviewed. She has succeeded in that part of her appeal but substantially failed on the other two matters that were raised as questions of law. 2 Telstra submits that I should reserve the costs of the proceedings until after the outcome of the further review I have ordered is known. Alternatively, it submits that each party ought pay its own costs and thirdly it submits that following inquiries made of a registrar of the court an amount of between $10,000 to $15,000 would be allowed on an assessment of a matter of this kind were it taxed. 3 Ms Keen argues that, excluding GST, her total costs of this appeal amount to about $38,000 including the $21,000 for solicitors' fees, $12,000 for counsel. Those amounts it should be noted include fees charged for attending the unsuccessful mediation which the parties voluntarily had with a registrar of the court. 4 The purpose of a fixed costs order under O 62 r 4(2)(c) is to save the parties the time, trouble, delay, expense and aggravation in having a taxation proceed on a matter. The court deals as a commonplace with administrative appeals of this nature. This appeal raised three issues of law of no particular complexity or difficulty so far as the need for large amounts of solicitors' preparation were concerned. I must say I am quite staggered that an amount of $21,000 before GST has been incurred in solicitors costs of dealing with what seems to me to be a number of legal arguments which failed, until after lunch on the day of hearing, even to identify the definition of 'proceedings' in the Safety Rehabilitation and Compensation Act 1988 (Cth) to which I have referred to in my principal judgment. The power is appropriate to be used in complex cases. It is a commonplace for the court to fix in administrative appeals under the Migration Act 1958 (Cth) an amount of costs for a successful party. 7 In my opinion, it is appropriate that an amount of costs be fixed by the court so as to prevent yet further argument and delay in finalising this matter. 8 The consequence of the orders made today is that, regrettably, a further taxation must take place before the Administrative Appeals Tribunal which will no doubt put these parties to even more expense. The dispute has generated, I was told at the hearing, very large issues as to costs between the parties. I do not think it would serve the interests of either party or the interests of justice to allow it to be protracted by having yet more taxations in this court where the issues are simple and the amount at stake in an ordinary appeal of this kind not large. 9 Doing the best I can having regard to the fact that Ms Keen succeeded on one of three grounds, that there was a failed mediation with a registrar of the court and that it was ultimately necessary for Ms Keen to come to the court to have her right to have a review conducted in accordance with law in the tribunal on the taxation of costs, I think that the appropriate figure to fix so as to avoid any further protracted dispute between the parties as to costs is the sum of $13,500 (see Order 4 in Keen v Telstra Corporation Limited [2006] FCA 834). I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | gross sum specified in order approach to quantification of gross sum federal court rules o 62 r 4(2)(c) costs |
The applicant was successful on the substantive aspects of his claim and seeks to have this Court make a costs order in his favour in place of that of Senior Member Allen. The elements of that code are these. The primary rule, subject to the operation of the section is, "the costs incurred by a party to proceedings instituted under Pt VI before the Tribunal shall be borne by that party": (s 67(1)). Subsections (2) to (12) of s 67 provide specific circumstances where the primacy of s 67(1) might be displaced. (Emphasis in original. (Emphasis added. I ordered that the matter be remitted to the Senior Member for clarification as to the nature of the decision made by him. Senior Member Allen then directed the Registrar of the Tribunal to alter the decision such that it now expressly states that the decision under review was set aside and a decision favourable to the applicant was made in substitution. 6 All that now remains in this appeal is to determine whether the Senior Member committed any error of law adverse to the applicant in the exercise of his discretion as to costs. 8 In his reasons for his decision that each party should pay its own costs, the Senior Member referred to a letter from the respondent to the applicant dated 15 August 2006. The letter contained a "Calderbank" offer of settlement. The respondent was prepared to concede that the applicant had suffered an aggravation of an existing condition, and that he was entitled to compensation under ss 16 and 19 of the SRC Act, but only from 27 April 2005 to 8 June 2005 (in reliance on a medical report of Dr Olsen, which stated that any aggravation was temporary). The offer included an undertaking by the respondent to pay the applicant's costs of the proceedings. No response was received to this letter. 9 The Senior Member referred to Perry [2006] FCA 33 ; 150 FCR 319 as authority allowing consideration of a "Calderbank letter" in the exercise of the discretion conferred by s 67(8). The Senior Member considered that the letter of offer in this matter satisfied the criteria set out in Perry 150 FCR at 327, 333-5, that it be clear, precise and certain, particularly with respect to the question of costs. 10 However, the Senior Member was of the opinion that the agreement proposed by the letter, which was to be the basis for a proposed consent decision of the Tribunal, did not constitute a decision open to the Tribunal to make. This was due to the principle in Lees v Comcare (1999) 56 ALD 84 which prevents the Tribunal from exercising any powers or discretions which were not available to the authority making the reviewable decision. The reviewable decision had affirmed the original decision that there was no liability under s 14 of the SRC Act, which deals with liability for injury. The offer of compromise dealt with compensation under ss 16 and 19, which relate to compensation for medical expenses and incapacity respectively. The Senior Member held that the Calderbank letter "was of no effect". According to the Senior Member the Statement claimed relief in terms far broader than liability simpliciter under s 14. The hearing was, in his opinion, extended unnecessarily as a result and, therefore, each party should bear its own costs. This is because the Tribunal is to have regard to the "circumstances of the case", and any such offer, regardless of validity, forms part of these circumstances. As outlined above, the Senior Member held that the Calderbank offer would not have been capable of being confirmed by the Tribunal, due to the principle in Lees 56 ALD 84. However, he seems to have reasoned that this prevented him from taking the offer into consideration when exercising his discretion as to costs. Such reasoning is incorrect in the light of Perry [2006] FCA 33 ; 150 FCR 319. This was an error of law in the exercise of the Tribunal's discretion, but it was an error in favour of, rather than against, the applicant. Even though the Senior Member purported not to consider the offer while exercising his discretion, he clearly outlined how he would have taken the letter into account, had he considered himself able to do so. Such treatment would not have been favourable to the applicant. 13 The Senior Member went on to consider the circumstances of the case generally, including the parties' conduct with respect to the proceeding. In short, he took the view that the applicant had sought to, and had, litigated issues going beyond those which could lawfully result in useful relief. The decision under review had dealt only with the respondent's liability to pay compensation to the applicant and, being negative, had not dealt with the quantum of any compensation that would be payable (on the basis of computation of the compensation payable). Very inconveniently for all concerned, that appears to be the state of the law in the workers' compensation cases governed by the SRC Act, as a result of the decision in Lees 56 ALD 84. (In the course of the hearing, I suggested that the statutes should be amended to do away with this considerably inconvenient and expensive need for multiple considerations of a single claim. ) The applicant had embarked on a lengthy investigation of the duration of his incapacity, though the Tribunal could not lawfully determine that issue in the instant proceeding. 14 The principal contention of the applicant was that, having won the case, he should have his costs. The respondent had not simply offered to concede liability but sought, itself, to tie that concession to a determination favourable to itself of an issue that was not lawfully before the Tribunal. In some cases, where no party has objected, the Tribunal has been willing in a commonsense way to determine both liability and quantum issues where the primary decision maker denied the respondent's liability: small wonder that the applicant, without dissent from either the respondent or the Senior Member, had sought to litigate both issues. 15 If this Court were free to review the Tribunal's discretion as to costs as on a re-hearing de novo, there might well be something to be said for this view. However, that is not the case. An error of law must be shown. Where the exercise of a discretion is involved, this usually involves the application of some legally mistaken principle. In matters of practice and procedure and, perhaps especially, costs in a well-trodden field such as workers' compensation litigation, such an error ought not lightly be inferred, because the discretion is a broad one, confined only by considerations relevant to the case at hand: Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 per Gaudron & Gummow JJ at [22]. The fundamental obligation of the Tribunal in the exercise of the discretion was to do justice between the parties according to its assessment of the circumstances of the case. Whether, in exercising the discretion, if conferred upon it, the Court might have taken a different view about the allocation of costs or circumstances influencing whether the respondent might be ordered to pay the costs or a part of the costs, is not to the point. The question of whether, in all the circumstances, the applicant acted reasonably is a question of fact to be determined by the Tribunal and it is not open to the Court to substitute its own view of those facts or the exercise of the discretion. The Tribunal then, in a broad brush way, made the costs order it did to reflect those competing considerations. The Senior Member had the benefit of being apprised in detail of the conduct of the parties throughout the course of the proceedings and of the general standards of conduct by parties in similar litigation before it. The full transcript of proceedings was not before this Court. 18 In my opinion no error of law such as might have assisted the applicant before the Tribunal has been demonstrated. Although there was an error of law by the Senior Member, its correction could only worsen, not improve, the applicant's position. 19 Accordingly the appeal will be dismissed. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. | administrative tribunals administrative appeals tribunal (cth) procedure and evidence costs exercise of discretion to award costs under s 67(8) of the safety, rehabilitation and compensation act 1988 (cth) administrative law |
The two schemes of immediate relevance are schemes described as Australian Olives Project No. 4 ('Project 4') and Australian Olives Project No. 5 ('Project 5'). These two schemes are two of six managed investment olive schemes. Issues in relation to Australian Olives Project No. 6 ('Project 6') are the subject of separate proceedings between AOL and particular members of that scheme. 2 Projects 4 and 5 were established to manage the cultivation of olive trees and in consequence olive production, at Yallamundi, a property located in the Darling Downs region of South Western Queensland between 2001 and 2004. Project 4 involves an area under cultivation of 223 hectares; a tree density per hectare of 357 trees; an investment term of 22 years; and the production of 16 olive varieties. The project has a Product Ruling from the Australian Taxation Office ('ATO'), PR2001/66. Project 5 involves an area under cultivation of 181.8 hectares; a tree density per hectare of 353 trees; an investment term of 20 years; the production of nine different olive varieties and ATO Product Ruling PR2003/26. 3 On 2 November 2007, a number of members of Project 4 caused a Notice of Meeting of Members to be issued to all members calling a meeting of Project members for 11.00am on Monday, 26 November 2007 at the offices of Piper Alderman, Lawyers, in Sydney and on 1 November 2007 a number of members of Project 5 caused a Notice of Meeting of Members to be issued calling a meeting of members for 10.00am on 26 November 2007 at the same place so as to consider two proposed extraordinary resolutions in each project. 224107 of Primary Securities Limited ABN 96 089 812 635 being made to permit it to operate the Project, the current responsible entity of the Project, Australian Olives Limited ACN 078 885 042 be removed as responsible entity of the Project. 224107 of Primary Securities Limited ABN 96 089 812 635 being made to permit it to operate the Project, that Primary Securities Limited be appointed as the new responsible entity of the Project. 5 On 19 November 2007, the applicant filed the present application by which it seeks a declaration that the Notice of Meeting in respect of both Projects 4 and 5 is invalid on grounds that each notice recites a list of members calling the meeting some or all of whom did not wish to call a meeting and each notice is misleading of members of each scheme as it incorrectly states that the members listed on the notice all support the resolutions proposed in each Notice when some of those members do not. The applicant seeks a final injunction restraining the respondent members of each Project from convening each meeting and an interim injunction restraining them from convening the meeting pending the final determination of the issues. The respondents to the application are most of those members recited in each Notice of Meeting. 6 On 21 November 2007, directions were made by the Court that the application for interim relief be adjourned to Thursday, 6 December 2007; each meeting of members of Projects 4 and 5 to be held on Monday, 26 November 2007 be adjourned until 12.00pm Sydney time on Monday, 10 December 2007 at the offices of Piper Alderman, Level 23, Governor Macquarie Tower, 1 Farrer Place, Sydney; an amended application in the related proceedings concerning Project 6 be filed by Monday, 26 November 2007 and related orders. 7 The central contentions of the applicant in support of an interim injunction restraining the respondents from proceeding with the meeting are these which might usefully be illustrated primarily by reference to Project 4. 8 The Notice of Meeting for Project 4 recites that 'The attached list of members of ... Project 4 ... who hold interests in the Project, 496 groves out of a total of 1,117 groves, representing 44% of the votes that may be potentially eligible to vote at a meeting of the Project's members ... give notice ... that they have pursuant to section 252D of the Corporations Act 2001 called and arranged a meeting of members of the Project at the time, date and place listed below to consider and vote on the resolutions specified in this notice'. The notice attaches a list of 56 members of Project 4 and identifies the interest held by each member. The notice says that in particular a responsible entity of a registered scheme must exercise the degree of care and diligence a reasonable person in that position would exercise; act in the best interests of members and if there be a conflict between the interests of members and the entity, give priority to the member's interests; and treat members of the same class equally and those of different classes, fairly. The notice then says that if Primary Securities Limited ('PSL') is appointed as responsible entity it will conduct a review of management arrangements; review fees currently charged by AOL to members; conduct a review of frost damage to trees; and replace the auditors to the Project with others. The fair inference open from the conjunction of those observations with the statement of opinion of the members calling the meeting is that AOL has failed to discharge the identified duties which condition the view of those calling the meeting that the interests of members would be better served by removing AOL and replacing it with PSL. 11 The applicant contends that of the 56 members recited in the Notice of Meeting for Project 4, 24 of them consented to their name being endorsed on the notice, 4 of them did not agree and 21 of them provided no response to a request made of them that they consent to their name being included within the 56 nominated members. Therefore, the notice suggests, it is said, much broader support for the calling of a meeting than is the position and actively misstates consent from some members. Secondly, the consent given by 24 of those members was simply a consent to the convening of the meeting and not an expression of approval or support for the resolutions based on the identified opinion. Since the accompanying Explanatory Memorandum incorrectly recites that all 56 members recorded on the Notice of Meeting consider that member's interests will be better suited by the removal of AOL and the appointment of PSL, the notice is necessarily misleading or deceptive or likely to mislead or deceive members in relation to the Project in contravention of s 1041H of the Act thus enlivening the Court's power to make a remedial order under s 1324(1) of the Act including an interim order in aid of the final relief. Thirdly, the misleading quality or character of the notice is unable to be cured, it is said, because the notice invites recipients to respond by addressing a proxy form in favour of PSL either for or against the motions and members who have sent a proxy to PSL in reliance upon the Explanatory Memorandum have committed themselves to a position with the result that no statement made to the meeting will reach or influence those members who have given a proxy. In addition, consideration must be given to those members who may not attend the meeting but who have received the material and have acted one way or another, in reliance on it. 12 The evidence going to these contentions is this. 13 The procedural steps and general arrangements for convening the meeting of members and formulating and issuing the Notices of Meeting have been undertaken by Stantins, Accountants and Advisers of Hawthorn in Victoria. Mr Spyridon Livadaras is a partner in Stantins and says that he is personally the adviser to a number of the respondent members convening the meetings for each Project. Mr Livadaras says that he received a number of consents from members of Project 4 to call a meeting and he subsequently caused the Notice of Meeting to be sent. Exhibit 'SL2' to the affidavit of Mr Livadaras sworn 30 November 2007 attaches copies of emails and correspondence evidencing the consents for Project 4. Those attachments demonstrate that an electronic or written consent was received by Mr Livadaras from 24 of the 56 members mostly after the date of issue of the notice. There is no electronic or written consent forming part of Exhibit 'SL2' from 21 of those 56 members. If we can get the numbers we will arrange this for all six projects. Are all of your management fees up to date with AOL? Would you agree to us using your name to call the meeting? The electronic and written consents are therefore simply a consent to the use of the member's name to call the meeting and not a consent or acceptance of the statement that the member considers that members' interests would be better served by the removal of AOL. The applicant says an examination of the consents comprising Exhibit 'SL2' reveal that in each case but one, the member has consented to being listed as a member for the calling of a meeting and no more. One response, an email response from 'Greg' is, critical of the 'abysmal performance' of the investment and the performance of AOL. 15 The applicant relies upon the affidavit of John James Whelan sworn 19 November 2007. Mr Whelan says that he is a member of Project 4 and Project 5 holding five and 10 interests respectively in those projects. He says that on 24 October 2007 he received an email from Leonie Ladgrove of Stantins requesting his approval to incorporate his name within the group of members calling a meeting of members for each project. Mr Whelan says he did not respond to that request and subsequently received Notices of Meeting for both projects and noticed that his name was included on both notices as a member calling each meeting. Mr Whelan says that he has not provided his consent to any person to use his name for the purpose of calling a meeting of members of either project. Mr Whelan says that on 10 September 2007 he received an email from Tanya Kruppa of Stantins in which Ms Kruppa identified herself as a grower in Project 5 and an Accountant with Stantins; refers to independent research conducted by 'Adviser Edge' on behalf of Stantins concerning Australian Olive Projects with particular focus upon Projects 4, 5 and 6; refers to site inspections of the trees conducted by Adviser Edge; and refers to four issues to be addressed in relation to Projects including Projects 4 and 5, namely, a consideration of an alternative structure for management fees in respect of each project under the current structure, a restructure of the schemes, the question of a conflict of interest between AOL and the plantation manager and details of the extent of frost affect upon trees under management in each Project. Like you, I have been concerned about a few issues, mainly related to the drought, but also to some of the structural and conflict issues. I did, however, notify Suzanne Aznavorian of your office on 1 November in relation to Project 6 that I was voting against your proposal. I also informed her I was a member of Projects 4 and 5 as well. I am told there are others on your list in a similar position. Mr Livadaras then drew Mr Whelan's attention to the proxy section of each Notice of Meeting and that part of the notice advising where proxies could be sent. Please don't try to misrepresent what I have said --- you have not then said anything about sacking the Responsible Entity ... your response of the same date did not indicate, except in a veiled way, the action now taken. In particular, the excellent report of Adviser Edge you included with that email did not envisage it either, although it did suggest restructuring was needed. Our differences relate more to the way you want to proceed. It is very dangerous to mess with tax-approved schemes and I think it should always be as a last resort, not one of the first avenues explored. I remain interested in becoming involved in any review. Mr Shaw says that on or about 4 December 2007 he was informed by Mr Peter Bysouth, a member of Projects 4 and 5 that he did not call either of the meetings of members for those Projects and that his name was included on the Notices of Meeting without his consent. Mr Shaw says that Bysouth advised him that he was willing to swear an affidavit to that effect. Mr Shaw also says that Bysouth provided him with a copy of an email sent to him by Mr Livadaras and an email sent by Bysouth to Ms Aznavorian. The applicant says the email from Mr Livadaras of 24 October 2007 reveals the frame of reference by which Mr Bysouth's involvement was sought. Would you like to list your name and request you confirm that you are willing to proceed to call a meeting. 21 The applicant says there are two other examples of members whose names have been included amongst those calling the meeting who did not provide their consent. Mr Shaw in his affidavit sworn 20 November 2007 refers to a conversation he had with Mr Jose Valles a member who holds 12 interests in Project 6 and 10 interests in Project 5. Mr Shaw put to Mr Valles that he had been personally listed as one of the people convening a meeting. Mr Valles said that he had been 'given a different story to that'. Mr Shaw deposes to his impression that Mr Valles seemed surprised that a meeting had been called and 'certainly seemed to be surprised at any suggestion that he was an instigator of the meeting'. Mr Shaw says that on 9 November 2007 he spoke to Dr Christopher Mack a member who holds 20 interests in Project 4 and 20 interests in Project 5. Mr Shaw says that Dr Mack told him that he did not consent to his name being used to call a meeting and he has 'not called any meetings of members for any of the Australian Projects and is willing to swear an affidavit to that effect'. Mr Shaw says that he spoke with Dr Mack on 16 November 2007, prepared a draft affidavit, spoke to Dr Mack about the affidavit and sent the affidavit to him. No affidavit from Dr Mack has been filed. 22 In relation to the consents obtained by Mr Livadaras from members of Project 4 endorsed on the Notice of Meeting, many of the consents are dated well after the date of receipt by members of the notice on or about 2 November 2007. The consents are dated 29 November 2007, 19 of them are dated 21 November 2007, two of them are dated 26 November 2007 and two others are dated 28 November 2007. Others are dated 31 October, 24 October, 20 September, 2 November and 21 September 2007. Two observations can be made about the consents. First, since a large number of the electronic or written consents are dated well after the receipt by members of the Notice of Meeting for Project 4 an inference is open that those members consent to the document as received by them which includes a clear statement of the resolutions and the memorandum explanatory of those proposed resolutions incorporating the contextual matters set out in that part of the document [10]. Secondly, since the affidavit material does not disclose any step taken by 21 of the members recited in the notice as those calling the meeting, to object to the issue of the notice, the material contained within it or the proposed resolutions, an inference is open that those members support the calling of the meeting and do so in the context of having received the notice and the Explanatory Memorandum and thus act on an informed basis as to the content of each notice. 23 The evidence that Mr Livadaras issued the Notice of Meeting for Projects 4 and 5 without the consent of a member and without support for the proposition that a member held the view that AOL ought to be replaced, is that of Mr Whelan and evidence on information and belief by Mr Shaw as to the position of Dr Mack and Mr Bysouth. The evidence in relation to Mr Valles is at best a statement of impression on the part of Mr Shaw. The evidence in relation to Dr Mack is more precise. Mr Blake Ammit in his affidavit sworn 20 November 2007 explains that AOL has attempted to contact numerous members listed in the notices for Projects 4 and 5 'but due to time constraints has been unable to speak to most of the members in question'. Mr Ammit says that representatives of AOL in speaking with some of those members who called the meetings have been advised that the members 'do not understand why meetings have been called in respect of the projects'. There are no affidavits from members in either group referred to by Mr Ammit (except perhaps Mr Whelan). 24 I accept that there is evidence which establishes that Mr Whelan did not give his consent to the use of his name for inclusion in notices to convene meetings of members of Projects 4 or 5 and I accept that Mr Whelan's evidence is that he did not communicate to Mr Livadaras nor does he hold a view that AOL ought to be replaced as the responsible entity for Projects 4 and 5. I also accept that there is evidence on information and belief that Dr Mack and Mr Bysouth did not consent to the use of their names for inclusion in notices convening meetings of members for the Projects. However, it seems to me that the vast majority of the 24 members providing electronic or written consents have done so in circumstances where they accept their subscription to the Notice of Meeting for Project 4 informed by its contents including the formulation of the resolutions, the Explanatory Memorandum contextualising the resolutions sought to be put to the meeting and the proxy arrangements. Moreover, an inference ought properly be drawn that those 21 members of Project 4 who failed to respond by providing a consent to Mr Livadaras represent individuals or investors that raise no objection to the use of their name in the document as sent to them. No material has been filed by the applicant arising out of Mr Ammit's discussions with members or other discussions between representatives of AOL and members. 25 In relation to Project 5, 54 members are listed on the notice. Approximately 30 of those members have provided a consent to Mr Livadaras and the applicant contends that eight members have not provided a consent. The position of Dr Mack and Mr Whelan is reflected in the affidavits of Mr Shaw and Mr Whelan. The position of Mr Bysouth is reflected in Mr Shaw's affidavit. As to the other five, there is no evidence. An examination of the consents for Project 5 attached to Exhibit 'SL4' to the affidavit of Mr Livadaras reveals a similar position to that of Exhibit 'SL2' in which the vast majority of those providing their consent have done so during November and on or about 21 November 2007 and must be taken to have consented to the Notice of Meeting in the sense that they agree to the issue of the Notice of Meeting in their name in the form as issued including the Explanatory Memorandum and contextual statements. 26 Accordingly, subject to what follows, to the extent that conduct has occurred which is misleading or deceptive or likely to mislead or deceive a recipient of the notice, it is confined to conduct in relation to the asserted position of Mr John Whelan, Dr Mack and Mr Bysouth. However, the applicant has not demonstrated a nexus between the conduct of incorrectly including Whelan, Mack and Bysouth in the notices and a misleading effect or likely misleading effect upon recipient members (or a substantial proportion of them) of each scheme. The applicant says Whelan is representative or emblematic of a reasonable member of the class of addressee in question and the sufficiency of the nexus between the conduct and misleading scheme members or deception or likelihood of misleading or deceiving scheme members 'is to be approached at a level of abstraction' not present in cases where a misrepresentation is made only to particular identified individuals ( National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 49 ACSR 369 [18] per Dowsett J). However, in order to establish that the conduct in question is or is likely to mislead or deceive scheme members, as a defined group of identified addressees, the applicant must show, beyond an abstraction, that a significant proportion of those members (that is, more than simply a few) were misled by relying upon the statement that Whelan, Mack and Bysouth called the meeting when they did not and that Whelan, Mack and Bysouth held the view explanatory of the resolutions, when they did not ( Campomar Sociedad Limitada v Nike International Ltd (2000) 2002 CLR 45; National Exchange (supra) [20] - [28]). The applicant also relies upon the observations of Young J in Devereaux Holdings Pty Ltd v Pelsart Resources NL & Anor (1986) 4 ACLC 12 at 14 concerning an allotment of shares consequent upon a resolution made at a meeting based upon a notice issued by directors supported by an explanatory memorandum said to contain incorrect and misleading information. His Honour accepted that the test to be applied was whether any reasonable ground existed for supposing that such imperfections as may be found in the circular, had the result that the majority (who approved the proposal placed before them) did so under some serious misapprehension of the position. That test is not inconsistent with the above observations which seem to me to govern the position here. Moreover, the duties upon directors are not those of members seeking to convene a meeting. Nevertheless, an applicant would, on either view, need to establish that a significant proportion of those voting did so under some serious misapprehension. In other words, a clear nexus would need to be demonstrated. 27 Mr Livadaras deposes to the receipt of proxies from members of Projects 4 and 5. Mr Livadaras says that approximately 45% of members of Project 4 have forwarded completed proxy forms casting their votes in favour of the resolutions and 70% of members of Project 5 have forwarded completed proxy forms casting their votes in favour of the resolutions. 28 The 'organising principles' governing the grant of an interlocutory injunction are those identified at [19] of the joint judgment of Gleeson CJ and Crennan J in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 and the explanation of those principles is set out in the reasons of Gummow and Hayne JJ at [65]---[72] of O'Neill . 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] HCA 1 ; (1968) 118 CLR 618 should be followed. That test might be described by the use of the phrase 'serious question' to which there is no objection if it is understood 'as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham , depends upon the considerations expressed in Beecham '. Those considerations are set out in the well known passage from Beecham at p 622, per Kitto, Taylor, Menzies and Owen JJ. 30 The applicant seeks a declaration that each notice is invalid (and therefore cannot support a call for a meeting) by reason of the inclusion of some members who did not wish to call a meeting and the inclusion in each notice of incorrect and misleading statements that all members calling the meeting support the proposed resolutions. The interim injunction is sought in aid of the final relief and is pressed on the ground of a prima facie case of a contravention of s 1041H of the Act. The applicant seeks to restrain all of the respondents from convening the meetings and voting on the resolutions. However, the evidence of a contended contravention extends only to the circumstances of Mr Whelan by direct evidence and Dr Mack and Mr Bysouth by evidence on information and belief. The evidence does not demonstrate that the Notice of Meeting was misleading of members on the footing that the remaining respondents did not support the call for a meeting and do not support a call on the basis of the notice as despatched or that members were misled. 31 Let it be assumed, however, that a prima facie case of a contravention is made out in respect of the circumstances of at least one member and possibly three members, two further matters are said to go to the exercise of discretion. First, what are the conditions of a valid notice and secondly, can the members lawfully convene and vote on the proposed extraordinary resolutions if the proposed resolution to appoint PSL is prohibited by the Act. In addition, the proposed resolutions are inter-dependent in the sense that the resolution to remove AOL is conditioned upon the appointment of PSL as the new responsible entity and PSL securing a variation to its financial services licence under the Act. Each scheme involves the contribution of consideration by investors (members) to acquire rights (interests) to benefits produced by the use of those contributions for the scheme purpose in circumstances where the members do not have day-to-day control over the operation of the scheme (s 9). Such a scheme must be registered under the Act by ASIC, subject to s 601EB(1) , if it has, as here, more than 20 members (s 601ED(1)). Each scheme must have a constitution (Part 5C.3) and a compliance plan (Part 5C.4). Each registered scheme must identify a company (the responsible entity) to operate the scheme and perform the functions conferred on it by the scheme constitution (s 601FB(1)). The responsible entity of a registered scheme 'must be a public company that holds an Australian financial services licence authorising it to operate a managed investment scheme' (s 601FA). PSL is said not to have such a licence. The statutory duties to be discharged by the responsible entity are set out at s 601FC(1) and those of officers, at s 601FD. 33 Division 2 of Part 5C.2 deals with the methods of changing the responsible entity of a scheme. A purported change of the scheme's responsible entity is 'ineffective unless it is in accordance with this Division' (s 601FJ(2)) and 'a company cannot be chosen or appointed as the responsible entity or temporary responsible entity of a registered scheme unless it meets the requirements of section 601FA ' (s 601FK ). However, ASIC or a member of the registered scheme may apply to the Court for the appointment of a temporary responsible entity of the scheme if the scheme does not have a responsible entity that meets the requirements of s 601FA (s 601FN ) and the Court may make that order if it is satisfied that the appointment is 'in the interests of the members' (s 601FP). ASIC may deregister a scheme if the scheme does not have a responsible entity that meets the requirements of s 601FA (s 601PB (1)). In addition, ASIC has power to grant exceptions and modifications to Chapter 5C by force of Part 5C.11. In order to maintain continuity for those persons dealing with the register, a company recorded by ASIC as a responsible entity of a registered scheme remains the responsible entity until the record is altered to name the new entity, notwithstanding anything in Division 2. 34 A responsible entity might retire or be removed by members. The resolutions must be extraordinary resolutions if the scheme is not listed. Because the register must be kept current, s 601FM(2) provides that if the members vote to remove a responsible entity and at the same meeting choose a company to be the new responsible entity (that consents in writing), the pre-resolution responsible entity must within two business days lodge a notice with ASIC asking it to alter the record of the scheme's registration to name the new responsible entity and ASIC must comply with the notice when lodged (s 601FM(2)(a) and (c)). 36 Section 252D of Part 2G.4 of the Act provides that members of a registered scheme who hold interests carrying at least 5% of the votes that may be cast at a meeting of the scheme's members may call and arrange to hold a meeting of the scheme's members to consider and vote on a proposed special or extraordinary resolution. An extraordinary resolution in relation to a registered scheme means, among other things, a resolution 'that has been passed by at least 50% of the total votes that may be cast by members entitled to vote on the resolution (including members who are not present in person or by proxy)' (s 9). Since the Notice of Meeting for each scheme recites members calling and arranging to hold a meeting representing 44% (Project 4) and 65% (Project 5) of members, the incorrect inclusion of Whelan, Mack and Bysouth does not reduce the notices to a call for a meeting by members holding interests carrying less than 5% of the votes that may be cast at the meeting. The notices are otherwise valid as they are supported by members representing a substantial percentage of interests entitled to vote. It seems to me that the reference in the email from Leonie Ladgrove of 24 October 2007 to Mr Whelan and the email to Mr Bysouth which make reference to the need to list as many members as possible so as to avoid AOL seeking and obtaining an injunction to restrain the meeting is simply a reference to a desire on the part of those organising the call for a meeting to secure the support of a proportion of the members well beyond the 5% threshold. 37 The more difficult question is the licence status of PSL and the extent to which that consideration should be weighed in the exercise of discretion assuming a prima facie case of a contravention of the Act in respect of at least one and arguably three members. The applicant says that in exercising the discretion, the Court should weigh in the balance in favour of granting interim relief, a recognition that the meeting is seeking to pass a resolution (inter-dependent with the removal of AOL) to appoint a responsible entity to each scheme that is prohibited from so acting by ss 601FK and 601FA and such a resolution is rendered ineffective by s 601FJ(2). The respondent scheme members say the meeting should proceed to determine the matter because: it is called lawfully; members are entitled to consider the resolutions and if thought fit pass or reject the resolutions; no question of a prohibition upon PSL being chosen or appointed to act as responsible entity arises unless and until the meeting passes a resolution purporting to choose or appoint PSL; and, in any event, PSL's Australian financial services licence issued by ASIC authorises it to operate 'a managed investment scheme' and it is not a requirement of s 601FA that PSL be licensed to operate 'the managed investment scheme'. 38 As to the last point, PSL holds an Australian financial services licence (No. 224017) under s 913B of the Act. The affidavit of Anthony Johnston sworn 20 November 2007 exhibits ('AJ1') a copy of the PSL licence obtained upon conducting a search of the ASIC register. The licence records that PSL 'shall continue to be licensed ... subject to the conditions and restrictions, and to the conditions contained in this licence and attached schedules'. They are a horticulture scheme called 'Cool Climate Apricot Project'; a forestry scheme 'NTT Mahogany Project'; a further forestry scheme 'NTT Mahogany Project 2006-2008'; a further forestry scheme 'WRF Kangaroo Island Plantations 2002'; a horticulture scheme 'Moora Citrus Project'; a timber scheme 'Australian Hardwood Investment Scheme' and a property scheme 'Compass Hotel Group Trust'. Mr Robert Garton Smith, the Managing Director of PSL, in his affidavit sworn 5 December 2007 says that PSL has applied for and been granted approximately 20 licence variations almost all for agricultural schemes of different varieties and that PSL currently holds or oversees 12 managed investment schemes. 40 The term 'Australian financial services licence' bears the same meaning in Part 5C as it does in Part 7 of the Act which provides for the regulation of such licences. Part 7 provides that ASIC must grant a licence if the requirements of s 913B are satisfied and ASIC may at any time 'impose conditions or additional conditions on the licence and vary conditions' (s 914A(1)). It may do so on its own initiative or on the application of the licensee (s 914A(2)). A licensee must comply with the conditions (s 912A(1)(b)). The scope of the 'Authorisation' conferred by the licence granted to PSL is not limited (so far as operating a registered managed investment scheme is concerned) to operating the identified schemes but extends to operating schemes of the kind identified. Horticulture schemes for the propagation of olive trees and the production of olives may be schemes of the kind described as the apricot or citrus horticulture schemes recited in the licence. There is no evidence on those matters. Those schemes may exhibit an entirely different organisational structure, call for different levels of horticultural expertise and may be differentiated by reason of a range of other factors. The Corporations Regulations 2001 (Reg. 7.1.04A and Reg. 7.1.04B) identify for the purposes of s 761CA of the Act those things that constitute a kind or class of financial service for the purposes of Part 7. Those Regulations although confined to an explanation of the meaning of 'custodial arrangement' in s 1012 IA of the Act and variations to financial products' for the purposes of s 1017F(4), may give some indication of the meaning of a kind of financial product or class of financial product. As to kind, 'each of the following is a kind of financial product (a) for interests in a managed investment scheme, all the interests in that managed investment scheme' (Reg. 7.1.04A(2)) and as to class, 'an interest in a managed investment scheme is in the same class as another interest in a managed investment scheme if they are both interests in the same managed investment scheme' (Reg. 7.1.04B(2)). To the extent that these terms provide any analogue for the purposes of Part 5C of the Act, they indicate a limited meaning to the terms 'kinds' or 'classes'. Mr Smith exhibits to his affidavit a copy of a letter to PSL from ASIC dated 3 December 2007 ('RGS1') in response to PSL's application to vary the licence to expressly authorise it to operate the six registered olive schemes as responsible entity. That letter identifies a range of information ASIC requires for consideration in dealing with the variation application. The ASIC letter seems consistent with a position taken by PSL that a variation to its licence is necessary to enable it to operate the six olive schemes either because the authority conferred by the licence is limited to the nominated schemes or, alternatively, those nominated schemes are not of the kind represented by the olive schemes. 41 Section 601FA is not satisfied by holding a licence to conduct any registered managed investment scheme. The section contemplates a licence authorising, according to its terms and conditions, a company to operate the managed investment scheme in question. That licence, however, might do so because the particular registered managed investment scheme falls within the scope of the existing licence as, for example, a scheme of the kind already licensed. For the purposes of this application only, I proceed on the footing that PSL does not hold a licence to operate Projects 4 or 5. The question however of PSL's licence or the circumstances relevant to whether PSL requires (or might obtain) a variation to its licence to act as a responsible entity of the olive schemes are matters the meeting of members might properly consider. The possibility or prospect that the meeting might pass inter-dependent resolutions that result in a contended appointment of a responsible entity other than in conformity of Part 5C of the Act is not a proper basis for exercising the discretion in favour of restraining the respondent members from holding a meeting of scheme members. If the meeting resolves in a way which is thought to be inconsistent with the statutory provisions, that resolution will give rise to other considerations. Those considerations may never arise. 42 I am not satisfied that a prima facie contravention of the Act in respect of the use of the names of Mr Whelan, Dr Mack or Mr Bysouth is made out as the applicant has failed to demonstrate a nexus between the conduct and scheme members being misled by reason of it. Nor has a proper basis for restraining the respondent scheme members from convening the scheme meetings been made out. I am not satisfied that the notices are rendered invalid by the use of the names of those three members. I am not satisfied that a proper basis arises for the exercise of the discretion to grant interim relief restraining members from holding the meetings and voting upon the resolutions. If I was otherwise satisfied that a prima facie case had been made out, I would not regard the possibility or prospect that the members might pass a resolution resulting in a contended appointment of a responsible entity other than in conformity with Part 5C of the Act, as a matter influencing the exercise of the discretion to grant interim relief to prevent the meetings from taking place. 43 As a result, the application is dismissed with costs. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application by a responsible entity of two registered managed investment schemes (among six schemes) for the propagation of olive trees and the production of olives, registered under the provisions of the corporations act 2001 (cth) for an interim injunction to restrain the convening of a meeting of scheme members to consider extraordinary resolutions to remove the responsible entity consideration of part 5c of the corporations act consideration of those provisions relating to the methods of removing a responsible entity consideration of the prohibitions upon an entity being chosen or appointed to act as a responsible entity of a registered managed investment scheme consideration of the provisions relating to the appointment of a company to act as a responsible entity consideration of the extent of the prima facie case of a contravention of the act and those factors influencing whether the discretion ought to be exercised in favour of granting an interim order corporations law corporations law practice and procedure |
On 7 September 2004, I published reasons for judgment on liability: Willis Tu v Pakway Australia Pty Ltd [2004] FCA 1151 (" Willis Tu "). I found that the first and second respondents had infringed the registered designs. The applicants elected to have an account of profits and, by agreement, the parties subsequently settled on $36,728 as the amount of profit. The parties were, however, unable to agree on costs and have filed submissions concerning a number of costs questions. The question of costs now falls for determination. However, they submit that they are entitled to costs that were reserved in connection with the application for an interlocutory injunction and the notice of motion filed on 13 February 2002. The respondents also claim that the applicants should not recover costs relating to affidavits of Robin Walton, the evidence of Peter Kingsley Bayly, and the retention of two counsel for trial. 3 The applicants submit that there is no reason to depart from, or modify, the application of the general rule that costs follow the event. Moreover, they submit that the Court should order that costs not be reduced by one-third pursuant to O 62 r 36A(1) of the Federal Court Rules 1979 (Cth) ("the Rules"). A successful litigant is ordinarily entitled to an award of costs: see, e.g., Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at 97 per McHugh J (dissenting in result) and 120-1 per Kirby J. The power to make orders for costs is, however, discretionary, although it "must be exercised judicially and not against the successful party except for some reason connected with the case": see Ruddock v Vadarlis (No 2) [2001] FCA 1865 ; (2001) 115 FCR 229 (" Ruddock v Vadarlis (No 2) ") at 234 per Black CJ and French JJ. In this sense ' issue ' does not mean a precise issue in the technical pleading sense but any disputed question of fact or law. Costs may be apportioned according to success or failure on particular distinct or severable issues ... . 6 An unsuccessful party is not automatically entitled to costs in respect of those issues of facts or law on which the successful party failed: see Dr Martens Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 (" Dr Martens ") at [54] per Goldberg J; also Re Elgindata Ltd (No 2) [1993] All ER 232 at 237 per Nourse LJ, cited with approval in Hayle Holdings Pty Ltd v Australian Technology Group Ltd (No 2) [2000] FCA 1699 at [9] per Hely J; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271-2 per Gummow, French and Hill JJ; Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81 per Keely J at 84; and Toohey J in Hughes v Western Australia Cricket Association (Inc) (1986) ATPR 40 ---748 at 48,136, citing Cretazzo v Lombardi (1975) 13 SASR 4 at 16 per Jacobs J. 7 As will be seen below, some of the respondents' submissions run counter to these general principles. Alternatively, the respondents sought a ruling on the admissibility of each of these paragraphs. The Court ruled that portions of these paragraphs were inadmissible but did not order that the affidavit be taken off the file. The Court reserved costs. 9 Where the Court reserves the costs of an application, the costs reserved "shall follow the event unless the Court or a Judge otherwise orders": see O 62, r 15 of the Rules. The effect of this rule is to make reserved costs of interlocutory proceedings costs in the cause of the successful party in the principal proceeding unless some other order is made in respect of them. 10 The respondents submit that they should be entitled to costs of the notice of motion as the motion largely succeeded. The applicants claim that the respondents, as the unsuccessful parties in the matter as a whole, should not be awarded costs for a hearing where the Court decided routine evidentiary issues. 11 I accept the applicants' submissions on this point. The respondents did not succeed in having the affidavit taken off the file. Rather, they only succeeded on a subset of their evidentiary objections. An unsuccessful party should not ordinarily recover costs for evidentiary victories on route to final disposition. The circumstances are not such as to warrant departure from this position. These costs were also reserved. 13 The respondents argue that the applicants had a very weak case for the grant of interlocutory relief. It is well established that an applicant for an interlocutory injunction who gives the usual undertaking as to damages must show: (1) that there is a serious question to be tried; (2) that unless an injunction is granted the applicant will suffer irreparable harm for which damages will not be adequate compensation; and (3) that the balance of convenience favours the granting of an injunction: see Castlemaine Tooheys Ltd v The State of South Australia [1986] HCA 58 ; (1986) 161 CLR 148 per Mason ACJ at 153. Clearly, as the successful party in this litigation, the applicants could have satisfied the first prong of this test. It is less certain that the applicants could have satisfied the second requirement. If they had failed to satisfy this requirement then their application for interlocutory relief would have failed: see Hexal Australia Pty Ltd v Roche Therapeutics Inc [2005] FCA 1218 at [62] - [70] (denying interlocutory relief in a patent case where damages provided an adequate remedy). 14 Further, the respondents relied on the principle that where a person charged with patent infringement contests the validity of the patent and has grounds for the contest, the alleged infringement ought not be restrained on an interlocutory basis. This principle was discussed in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 623-4 by Kitto, Taylor, Menzies and Owen JJ, referring to Smith v Grigg Ltd [1924] 1 KB 655. The same principle has been held to apply in design cases: see Tefex Pty Ltd v Bowler (1982) 60 FLR 314 at 321 per Rath J and Obsa Pty Ltd v TF Thomas & Sons Pty Ltd (1990) 20 IPR 155 at 158 per Einfeld J. I accept that the respondents had grounds for their invalidity claim even though I did not ultimately accept the claim. The application of the principle was not, however, the subject of any real argument on the interlocutory injunction application, although I note that the respondents raised their invalidity claim early in these proceedings, by a cross claim filed on 5 November 2001. 15 The applicants claim that they may have succeeded and should not be punished for not pressing the application after the parties agreed to an early trial date. The fact is that the application for an interlocutory injunction was not dismissed. The issue of irreparable damage was not argued. Nor, as noted already, was the principle referred to in [14] above the subject of much, if any, discussion. As the applicants point out, some of the affidavits prepared in support of the application for interlocutory relief were relied on at trial; and injunctions as sought were ultimately granted. Moreover, I accept that it was clearly in the interests of the efficient conduct of the matter at the time for the applicants to take the opportunity of an early trial in exchange for pursuing their application for interlocutory relief. The applicants ought not to be disadvantaged for acting reasonably by pursuing an early trial date. I would not order that the applicants pay the respondents' costs of the interlocutory injunction application. 16 Nonetheless, although the applicants are the successful parties overall, I do not consider that, bearing in mind the matters referred to by the respondents, it would be appropriate for the applicants to have the costs of the interlocutory injunction application. In the circumstances of the case, each party should bear his or its own costs of the application for an interlocutory injunction. I would order that the costs reserved on this application be excluded from the general order for costs to be made in favour of the applicants. 18 The affidavits of Robin Walton and the evidence of Peter Bayly, to the extent admissible, did not much advance the applicants' case: see Willis Tu at [90]. Nevertheless, Mr Bayly's evidence assisted the Court in identifying the significant features of the registered designs: see Willis Tu at [91]-[94]. In the circumstances of the case, I do not find the applicants' reliance on his evidence as so unreasonable as to justify denying him the costs of this evidence. Similarly, I would not disallow the applicants the costs of Mr Walton's affidavits simply because these affidavits included some unnecessary technical details and the applicants did not succeed on the issues to which they were directed. 19 Accordingly, the applicants should recover the costs relating to the affidavits of Mr Walton and the evidence of Mr Bayly. This is an issue that is properly raised before a taxing officer, although I deal with it here as a matter of expediency. 21 In support of a submission that the Court should not reduce their costs on the basis that two counsel were retained, the applicants referred to the fact that this was a design infringement case in which the validity of the design was called in question. They also referred to the history of such cases in the courts and the commercial importance of the proceeding from their perspective. 22 I accept that this case was not a straightforward one. The respondents themselves briefed experienced counsel. There were issues of complexity. I also accept that, in this case, the grant of interlocutory relief, rather than remedies of a purely pecuniary kind, was central to the applicants' case and their commercial interests. The respondents have not established that the Court ought to deny the successful parties the costs of the senior and junior counsel retained by them; and I would not do so. 24 The applicants ask the Court to exercise its discretion to order that there should be no one-third reduction in this case, even though they recovered much less than $100,000. In written submissions, the applicants submit that, first, the declaratory and injunctive relief obtained in this matter was more important to them than the recovery of damages or an account of profits. Secondly, they argue that the legal issues were complex and, thirdly, that the Court should place less emphasis on the monetary amount in this case, since it was an amount agreed in settlement of the matter of quantum. The applicants argue that they should not be penalized for agreeing to compromise their monetary claim. In reply to the respondents yesterday, the applicants sought to distinguish intellectual property cases, including design cases such as this, from the general run of cases; and to distinguish the authority relied on by the respondents from this case (see below). They emphasized that the nature of the case was not to be measured by the amount recovered. 25 The respondents emphasised that they were relying on O 62 r 36A(1) rather than O 62 r 36A(2) (which applies if the Court is of the opinion that a proceeding could more suitably have been brought in another court or in a tribunal). The respondents submitted that wherever a party is awarded a judgment for less than $100,000, as was the case here, then O 62 r 36A(1) prima facie applies. 26 The respondents submitted that, as the applicants settled for an amount of profit below $37,000, the Court can conclude that any damages would have been less than that amount. Also, the respondents argued that the effect of the final orders in the case was limited. In their submission, the effect of the orders was simply to preclude the respondents from using a particular mould. The respondents claimed that evidence in the case showed that such a mould cost approximately $25,000 and would not be difficult to replace. 27 The respondents also asked the Court to give weight to the fact that Mr Tu did not act until 2001 even though he became aware of potential infringement in 1998. In their submission, this indicates that Mr Tu did not consider the possible design infringement as a serious matter worth investigating and acting upon promptly. The respondents also contended that the Court should have regard to the fact that, at least initially, the applicants' case was that the design in dispute was a matter of some complexity, whereas at the hearing Mr Tu's evidence was that he based his design on observations at a supermarket and completed his work in a short time with relatively little effort. 28 The respondents cited Reidy's Lures Pty Ltd v Basser Millyard Pty Ltd [2003] FCA 1242 (" Reidy's Lures ") in support of their position. In that case, the applicant sought injunctive relief against the respondents to restrain them from selling a fishing lure under a name similar to the name under which the applicant manufactured and sold its lure. It was alleged that the respondents' conduct involved conduct that was misleading or deceptive contrary to s 52 of the Trade Practices Act 1974 (Cth). The matter was resolved through consent orders granting such injunctive relief and damages of $4,200. Mansfield J ordered that costs be reduced by one third pursuant to O 62 r 36A(1) even though the applicant had secured the injunctive relief. 29 As already indicated, in reply, the applicants noted that Reidy's Lures involved a different kind of cause of action (conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth)) than this matter. Moreover, the applicants claimed that Reidy's Lures was straightforward and involved no challenge to the validity of any trade mark. In contrast, in the applicants' submission, this case, which involved an attack on validity, was far more complex. 30 The Court has a discretion to order that O 62 r 36A(1) not be applied. This discretion is conferred by the words "unless the Court or a Judge otherwise orders. " Further, the Court has declined on occasions to apply the rule in intellectual property cases where injunctive relief was granted in addition to monetary relief: see Australasian Performing Right Association Limited v Metro on George Pty Limited (2004) 64 IPR 57 (" Metro on George ") at [8]-[12] per Bennett J and Australian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 at [13] per Moore J. In Metro on George , Bennett J treated the fact that the litigation was complex and the injunctive relief of more importance to the parties than the quantum of damages as a proper basis on which to order that the reduction under O 62 r 36A(1) should not be made. 31 Although not on all fours with this case, Metro on George is more apposite than Reidy's Lures . As the applicants noted, Reidy's Lures involved a different cause of action, was very simple (the respondents were manufacturing and selling a lure under a name that was almost identical to that of the applicant) and involved no contest of validity. Its simplicity is reflected in the fact that, in marked contrast to this matter, it was settled quickly by consent orders. Moreover, the damages awarded in Reidy's Lures were very small indeed. For reasons similar to those canvassed in Metro on George , I find that it would not be appropriate to reduce the costs recovered in this case. 32 Although the agreed amount of profit was low, the legal issues in the case were not without their complexity. The Court is not aware of and would not want to inquire into the various considerations that led the parties to agree upon the amount agreed in settlement of the matter of quantum. Clearly enough, injunctive relief was a significant component of the remedies sought and ultimately obtained by the applicants. The proceedings have also resolved the question of design validity in the applicants' favour. In all the circumstances, it is appropriate to order that the amount of recoverable costs not be reduced in accordance with O 62 r 36A(1) of the Rules. Save for this, I would make orders for costs in accordance with these reasons. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | costs whether costs should follow the event reserved costs questionable success of motion where applicants did not pursue application for interlocutory relief in favour of early trial where affidavits contained unnecessary detail and inaccuracies and were given low weight costs of senior and junior counsel contested order 62 rule 36a(1), federal court rules practice and procedure |
I made certain declaratory and injunctive orders, and reserved for the parties the question of costs. I have now heard submissions on the question of costs. These reasons follow from, and should be read with, the primary judgment. I do not propose to repeat what is said there. The ACCC seeks an order to recover 85% of its costs on a party and party basis, as it contends that it succeeded to a substantial degree on the claims which it made. Harris Scarfe submits that each party should be ordered to pay its own costs up to 2 May 2008, or alternatively up to 29 May 2008, on the basis that the ACCC succeeded only in about 50% of its claims and that the appropriate order, therefore, is that each party should pay its own costs of the proceedings to that date, and thereafter (from one or other of those dates) the ACCC should pay its costs on an indemnity basis because from one or other of those dates it unreasonably refused to engage in negotiations to resolve the matter. The foundation for the Harris Scarfe contention is found in two letters from its solicitors to solicitors for the ACCC of 2 May 2008 containing a suggested proposal to resolve the ACCC's claims against it, and subsequently a further set of proposals contained in a letter from its solicitors of 29 May 2008. It filed no offer in Court in accordance with O 23 of the Federal Court Rules but relies upon the Calderbank principle: see Calderbank v Calderbank [1975] 3 All ER 333. I have carefully considered the respective submissions for the parties. In my view, the ACCC substantially succeeded in its claims against Harris Scarfe, and the reduction which I propose to make represents a broad brush attempt to reflect the fact that the ACCC did not succeed in respect of its claims of misleading and deceptive conduct in relation to what were called the Storewide Discount Representation and the 20% Off Storewide Representation contained both in the television advertising and in the catalogue. I have also taken into account that the ACCC, even in respect of the contraventions of ss 52 and 53 (e) of the Trade Practices Act 1974 (Cth) (the TP Act) upon which it succeeded, did not succeed in securing all the orders which it sought against Harris Scarfe. The declaratory and injunctive orders were, of course, confined to the particular contraventions established. The relevant injunctive order which the ACCC sought, which was unlimited in point of time, has been limited to a period of three years. No order was made for corrective advertising. An order was made to require Harris Scarfe at its own cost to maintain and continue the trade practices compliance program which it presently conducts, again for a period of three years. However, the detailed audit and supervision of that program, together with any modifications of it, and together with the "probation orders" which the ACCC sought whereby, in the event of further contravention of Pt V of the TP Act during the period of three years from the findings, the ACCC should be entitled to re-apply to the Court to extend the supervisory period in some form or another, were refused. I have taken into account that Harris Scarfe, at least by 2 May 2008, pointed out to the ACCC that it was unlikely to secure an unlimited injunction in time, or corrective advertising or supervision of the trade practices compliance program. I have also taken into account the relative time taken in evidence and submissions on the various issues in arriving at the apportionment as to costs. That includes the fact that the contentions of Harris Scarfe, and the extensive evidence it adduced about its significant attempts to avoid contravening the TP Act were not only relevant to the determination as to the appropriate orders to be made in the event certain contraventions were established, but also were said to be relevant to whether or not the alleged contraventions had occurred. More generally, I have sought to reflect that to a large extent the evidence was common to the allegations of the ACCC, so that even if the particular allegations on which the ACCC did not succeed had not been made, the nature and extent of the overall evidence would not have been much different. In relation to the more specific representations made in the catalogue described by the various banners to which reference is made in the primary judgment, each of those contraventions was established notwithstanding Harris Scarfe's contention that there was no misleading conduct at all because no representation of the nature alleged by the ACCC was made, or because on a detailed or close examination of the particular products advertised under the relevant banner, it could be seen that the banner could not or did not apply to the particular product, or because by reason of more detailed pricing information contained in relation to particular products under the more general banner an analysis of that pricing information would expose that the banner did not, or could not, apply to that particular product. Accordingly, but for the Calderbank offer, in my view the appropriate order as to costs would be that the ACCC should recover 80% of its party and party costs. I turn to consider the issues arising from the "Calderbank" correspondence of 2 and 29 May 2008. It is of course necessary to consider carefully the terms of that correspondence and of the responses to that correspondence. The context, as the evidence shows, is that soon after the investigation into the offending conduct commenced, Harris Scarfe communicated to the ACCC its desire to be cooperative and to explore a non-litigious outcome. Initially, in late 2007, it proposed the making of admissions "subject to appropriate qualifications" and the giving of a further undertaking under s 87B of the TP Act rather than for the matter to proceed to Court. On 22 November 2007, the ACCC indicated that it was not prepared to resolve the matter without a Court determination as to whether the conduct alleged contravened ss 52 and 53(e) of the TP Act. Its view is that it is a matter of public interest that Harris Scarfe's conduct should have been the subject of a court determination. I do not regard that approach as inappropriate in the present matter. The conduct complained of is likely to reflect not uncommon commercial advertising practices. Indeed Harris Scarfe disputed that its conduct in any respect contravened the TP Act. Moreover, the outcome of the proceeding indicates that in certain respects the conduct alleged did contravene the TP Act, and in other respects it did not. There is an important role for public awareness and education from a determination about the lawfulness of the conduct engaged in by Harris Scarfe. In any event, as I explained in the primary judgment, the history of its previous undertakings to the ACCC under s 87B of the TP Act and the concerns of the ACCC about Harris Scarfe's conduct, albeit in somewhat different contexts, during the currency of those undertakings warrants the ACCC declining to have accepted a further undertaking. The evidence then does not show much in the way of communication between the ACCC and Harris Scarfe between 22 November 2007 and 2 May 2008. The relevant principles for the exercise of the Court's discretion as to costs, in the light of a Calderbank offer, are well-known. The public interest is in the sensible and just compromise of disputes where that is appropriate. That is so whether the parties in dispute are private citizens or governmental instrumentalities. There may be circumstances where compromise is not appropriate, having regard to the nature of the allegations made. For instance, in the face of an allegation of serious fraud or dishonesty, a party may properly seek the vindication which a favourable court determination will recognise. Much depends on the particular circumstances. There may be circumstances, in the case of a public regulator such as the ACCC, where the particular issues are of such importance that it is proper to seek a judicial determination of them. Such cases will necessarily not be common. The ACCC is, like any other party, obliged to seek sensible resolution of disputes: see eg per Dowsett J in Australian Competition and Consumer Commission v Danoz Direct Pty Ltd [2003] FCA 1580 at [6] - [9] . Within the framework of that public interest, a Calderbank offer will be a relevant consideration. It draws the offeree's attention to the need to consider the offer carefully and the possible consequences of rejecting it. If the outcome of a proceeding is that the successful party has obtained judgment on less favourable terms than the offer made, generally costs and not uncommonly indemnity costs may be awarded against the successful party from a point in time after the making of the offer, fixed by reference to the time the offeree party might reasonably have considered and responded to the offer (compare O 23 r 5(3) of the Federal Court Rules ). Such an outcome is not a necessary one. The Court has the discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) as is just in all the circumstances. The party seeking indemnity costs on the basis of a Calderbank offer must generally show that the rejection of the offer was so unreasonable as to justify such an order: Inspector-General in Bankruptcy v Bradshaw (No 2) [2006] FCA 383. Harris Scarfe has pointed out that such orders have been made against the ACCC in Australian Competition and Consumer Commission v Black on White Pty Ltd [2002] FCA 1605 from the point when it unreasonably rejected an offer in relation to the claims made under s 87(1A) of the TP Act. The letter of offer of 2 May 2008 from solicitors for Harris Scarfe was not one, in my view, which was constructed so as to constitute a reasonable basis for compromising or proposing to settle the proceeding. It was a letter which denied any contravention of the TP Act by Harris Scarfe in respect of the television advertisements or the sale catalogue complained of, and asserted that there was a significant risk of the ACCC's claim not succeeding and its claim being dismissed with costs. The ensuing offer was without any admission of a contravention of ss 52 or 53(e) of the TP Act. The letter then recorded the steps Harris Scarfe had already taken to refine its trade practices compliance program, and proffered a further undertaking under s 87B of the TP Act which involved its best endeavours to ensure adherence to that refined program for a period of three years, and to undertake certain corrective advertising. The proposed undertaking in its recitals went no further than acknowledging the ACCC's concerns that the television advertisement and the sale catalogue may have mislead consumers, and the proposed corrective advertising was to the same general effect. The letter of 2 May 2008 then went on to point out, correctly, in the light of my ultimate conclusions, that it was unlikely in any event that the Court would impose injunctive relief of indefinite duration, corrective advertising or detailed third party supervision of its trade practices compliance program in the particular circumstances. It made no offer for costs towards the ACCC's costs. Apart from the undertaking, and importantly, it proposed the proceeding be dismissed with no order as to costs. That is, there would have been no public adjudication as to the lawfulness of the conduct alleged, and at least ostensibly the ACCC would have been seen not to have pursued the proceeding. In my view, the response of the ACCC, by letter of 23 May 2008, did not constitute "an imprudent refusal of an offer to compromise" as discussed by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd [1993] FCA 536 ; (1993) 46 FCR 225 at 233-4, where his Honour was discussing circumstances in which an award of indemnity costs might be made. Nor was it unreasonable for the ACCC to have rejected that proposal. Harris Scarfe had not acknowledged any contravention of ss 52 or 53(e) of the TP Act, so the question whether that sort of conduct in advertising might infringe those provisions was left unanswered. For reasons already given, it was not unreasonable for the ACCC to seek a court determination of any contravention of the TP Act, rather than acceptance of a further undertaking under s 87B. The terms of the proposed undertaking and of the corrective advertising were general. The proffered undertaking did not set out with any specificity why the ACCC alleged that ss 52 and 53(e) were contravened by the television advertisement or the catalogue. The proposed corrective advertisement was a little more precise, but still did not clearly convey the nature of the allegations. And, as noted, those documents contained no acceptance that the television advertisement and the catalogue were in fact misleading or deceptive. In addition, the related recitals were emphatic as to Harris Scarfe's conscientious attempts to comply with the TP Act and its cooperation with the ACCC. It may be that the ACCC would have entered into discussions on those issues if, in principle, that form of resolution of the dispute were acceptable. In that event, it would have been remiss of the ACCC not to have furthered discussion as to the contents of those documents. But, because I consider it acted reasonably in declining to pursue resolution of the dispute by a further s 87B undertaking, I do not regard it as having acted unreasonably by simply rejecting the overall proposal. Moreover, the letter of 2 May 2008 made no offer for costs of the proceeding to that date. For those reasons, I do not consider the letter of 2 May 2008, or the ACCC response to it, provides any reason to depart from the general approach to costs which I have referred to above. Senior counsel criticised the ACCC for not responding to the letter of 2 May 2008 earlier than 23 May 2008. Its then response was, in my view, sufficiently timely. First, the offer made by the letter of 2 May 2008 was expressed to be open until 23 May 2008. Secondly, as Harris Scarfe's witness statements were due to be served on 7 May 2008, it was reasonable for the ACCC to await their receipt and to consider them before responding to the letter of 2 May 2008. In fact, they were not served until 16 May 2008. Moreover, it was a complex proposal, and it is not clear the extent to which its terms in the circumstances required the attention of the ACCC itself, rather than of its officers. In any event, it appeared to that point that the parties were simply stalemated: the Harris Scarfe proposal was, in my view, expressed in a way which invited its acceptance or rejection, and involved the dismissal of the proceeding with no order as to costs. The ACCC response indicated that the ACCC assessed its prospects of success in the proceeding differently, it rejected the proposal. It required a Court order in resolution of the issues. It indicated that, if Harris Scarfe proposed to make any further offer to resolve the proceeding, it would have to cover a specified series of topics of relief. It invited any such proposal by 29 May 2008. The subsequent letter of offer of 29 May 2008 was available to be accepted, according to an extension acknowledged on behalf of Harris Scarfe, to 1 June 2008 (a Sunday). It was rejected by the ACCC on 31 May 2008, but there was further discussion between the parties by correspondence on the succeeding two days, in particular during the course of the first day of the hearing. That letter of offer was given only with one clear business day before the hearing, which commenced on 2 June 2008 and was completed the following day. By its letter of 29 May 2008, Harris Scarfe proposed orders which, in substance, acknowledged contravention of the TP Act in certain respects, including extending to contraventions beyond those found in the primary judgment and extending to the television advertising. It proposed that injunctions should be granted, operative only from 10 August 2008 because of the long lead time which Harris Scarfe has in the process of producing its brochures. It said that Harris Scarfe would be prepared to "make an appropriate contribution" to the costs of the ACCC to that date. The proposed orders included declarations of contravention of ss 52 and 53(e) in relation to the television advertisement, and the catalogue, and parallel injunctive orders. To the extent that they related to the Storewide Discount Representation and the 20% Off Storewide Representation in both the television advertisement and the catalogue, they went beyond the matters on which the ACCC succeeded. In each instance, and indeed in respect of the proven contraventions of ss 52 and 53(e) by reference to the banner headlines in the catalogue, the declarations and injunctions were significantly qualified by importing into the expression of the contravention, and by limiting the terms of the injunctions, that the accompanying detailed information was not clearly and prominently stated. In my view, that was a significant qualification on the ACCC's assertion of the contravening conduct. A similar qualification was to appear in the proposed corrective advertising. The ACCC on 31 May 2008, when rejecting the proposal, said that qualification was not acceptable, as well as pointing out that the expression of the admitted contraventions did not correspond with the alleged contraventions. It said a delay in any commencement of the injunctions was unacceptable. It said the proposed corrective advertising, and the probation control over the implementation of the compliance program, were too confined. And finally, it pointed out that there was no acceptable proposal for costs, especially where the proposal largely admitted the allegations, but had been made only at the last minute. In the circumstances, I do not consider that the response of the ACCC to the letter of 29 May 2008 was unreasonable. It follows that I do not regard that letter as providing a foundation for any order for costs to be made against the ACCC, whether party and party costs or indemnity costs, after 29 May 2008. In the first place, the offer contained in the letter of 29 May 2008 was belated. It was given only at that late stage because, until that time, Harris Scarfe's position had been maintained that the proceeding should be dismissed, and that a s 87B undertaking should be accepted. Harris Scarfe could have adopted a different position earlier, had it so wished. The offer was made with only one clear business day between it and the hearing. It first proposed only a one day response period. Whilst such a limited period (or even two days, as was given at the ACCC's request) might in some circumstances be appropriate, particularly if the offer was a step in a prolonged exchange of offers, I am not satisfied that it gave a reasonable period to reply in this instance. It was the first proposal which sought to engage the ACCC on terms which, earlier and (as I have found) reasonably, it had specified as conditions of engaging in settlement discussions: the admission of liability and the submitting to Court orders. The ACCC might have been vulnerable to a costs order if that offer had been made on 2 May 2008 (or earlier) in the light of its response, as it may then have been expected to engage in discussions to explore refining the Harris Scarfe proposal to a mutually satisfactory endpoint. But its timing meant that the ACCC, short of seeking deferral of the hearing, had very little time to do that. Its response of 1 June 2008 was not unreasonable. Secondly, the letter of 29 May 2009 did not invite its ready acceptance. It significantly qualified the terms of the proposed declaratory and injunctive orders, both in the way I have referred to and by adopting general expressions for those proposed orders which did not clearly reflect the expressions of the alleged contraventions in the application (and which, in the light of my findings about the contraventions flowing from the banner headlines, I have largely adopted in the orders of the Court), and for reasons which are not apparent to me, it left the question of costs unresolved. In other respects, that letter contained proposals (about corrective advertising and supervision of the ongoing trade practices compliance program) which went beyond the Court orders. As I have indicated, Harris Scarfe raised those matters appropriately at an earlier point and I have reflected them in the general order as to costs which I propose to make. But the opportunity for discussion about the terms of the proposed orders was limited by reason of its timing, and it is not reasonable to criticise the ACCC for responding as it did in the limited time allowed rather than putting aside in part its trial preparation to pursue such discussion, particularly where the question of its costs was left in the air. It is impossible to know whether agreement as to the ACCC's costs could have been reached in the short time available. The making of the offer did not require the ACCC to divert itself from its preparations for the hearing. Then, unless the ACCC were confident that a satisfactory negotiated outcome could have been reached, the hearing may have needed to have been adjourned for discussions with the risk that it would not be resumed in a satisfactory time frame. Allied with that consideration is that, as is customary, in any event any proposed consent orders (once negotiated) would have required the presentation to the Court of an agreed statement of facts (or admissions by Harris Scarfe) and submissions to satisfy the Court that the proposed orders should be made: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48 ; (1980) 148 CLR 150. It is not at all clear that, ultimately, there would have been any costs savings to either party by them adopting the course of further discussions and then, assuming agreement, of seeking consent orders, having regard to the timing of the letter of 29 May 2008 in relation to the hearing which took place on 2 and 3 June 2008. It is apparent from the above that I do not accept that the terms of the letter of 29 May 2009 proposed declaratory relief in essentially the same terms as the declaration which was made. The relevant part of the proposal was that the catalogue was misleading and deceptive because it contained statements that Harris Scarfe was offering for sale certain categories of goods at specified discounts whilst depicting, adjacent to the statements, other goods (not the subject of such discounts), being the goods set out in the table annexed to the orders made in the primary judgment. The declaration made relevantly reads that the catalogue was misleading and deceptive because it contained representations that Harris Scarfe was offering for sale the goods set out in the table annexed to the orders made in the primary judgment at the specified percentage discounts off the regular prices when, contrary to such representations, those goods were not discounted at all or not discounted by the specified percentage. In my view, there is a significant difference between the proposal and the order. It may be merely the result of different drafting styles, but the proposal does not include an express acceptance that the goods in question were advertised as offered for sale at the banner discount rate, when in fact they were not so offered for sale. The proposal of 29 May 2009 was in some respects more favourable to the ACCC than the orders made, and in other respects was somewhat less favourable. As it dealt with the question of costs in a general way only, it is not possible to know whether the parties may have come to some agreement on costs (apart from the terms of other orders to be made by the Court); nor is it possible to know if any such agreement would have been more favourable than the costs order which I propose to make. Hence, I am not satisfied that the offer of 29 May 2008 proposed an outcome to the proceeding, capable of acceptance by the ACCC, which was overall less favourable to the ACCC than the orders the Court has made, and will make on the issue of costs. I have exercised the discretion as to costs as if the letter of 29 May 2008 was a "Calderbank offer". Calderbank v Calderbank [1975] 3 All ER 333 was decided to enable a form of offer to be made which, if accepted, would bring an end to the proceedings or which, if rejected, could readily be measured against a judicially determined outcome, where the relevant Rules of Court did not permit an offer to consent to judgment to be filed in the terms of the proposed offer. As the letter of 29 May 2008 dealt with the question of costs in a general way only --- by offering to make "an appropriate contribution to the ACCC's costs to date", it probably does not fall strictly within the description of a "Calderbank offer": cf Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97 ; Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602. It was not an offer which, in its terms, was capable of acceptance so as to give rise to an enforceable agreement. Courts now expect the parties to refine the issues as much as possible. They expect the parties to confine their pre-trial processes to those really necessary for the fair and just resolution of the dispute. Except in special circumstances, they expect the parties to fully disclose their case in advance so that the real factual and legal issues can be focused upon, and the hearing be confined as much as it properly can be. It is an element of that approach, in the interests of the public and of the parties, that courts encourage the proper compromise of litigation. They expect the parties to respond reasonably to proposals for compromise of proceedings. That does not require parties to resolve their disputes, once an offer from one side has been made. But such an offer should be reasonably considered. It is, however, a further and significant step to award costs against a successful party because that party has not engaged in discussions following a Calderbank offer simply because such discussions might have led to resolution of the proceedings. I did not understand that Harris Scarfe was making such a submission. It is important, however, to be alert to the difference. To reject an offer informally made, that is one which does not follow the procedure of Order 23, may have costs consequences to the successful party, and if the offer is unreasonably rejected or not accepted those costs consequences may include indemnity costs. For the reasons I have given, I do not consider that Harris Scarfe's offer of 29 May 2008 results in a costs order in its favour on that basis. To decline to negotiate in relation to an informal offer when it might have been reasonable to have done so might also have adverse costs consequences to the successful party. The discretion in s 43 is not confined. It is, however, likely to be a rare case that such a consequence might arise. It will obviously be very difficult for a court to know whether negotiations which ought reasonably to have been undertaken would have come to fruition, and if so whether the outcome would have been more or less favourable than the judicial determination. Moreover, that might require a further hearing, perhaps even a protracted hearing, to resolve such issues. There are obviously important issues to be considered before such a proposition were to be entertained. If it were advanced on behalf of Harris Scarfe, I would have rejected it in any event having regard to the proximity of the hearing to the offer, and to the terms of the offer. The costs protection for the unsuccessful party lies in its power: it is the making of a clear and comprehensive offer, whether formally or informally. For those reasons, I order that the ACCC recover 80% of its costs of the application. Those costs may be taxed, if not agreed, on the usual party and party basis. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | calderbank offer made by respondent applicant's failure to accept offer not unreasonable consideration of circumstances in which offer made, conduct and nature of proceedings and orders sought by applicant costs |
Mr Colin George Dunstan is the applicant and in his Statement of Claim dated 4 November 1998 he challenges what he alleges to be three decisions made under the Public Service Act 1922 (Cth) as it was in 1997 ("PSA"). The first decision he identifies was made by Mr John Robert Growder on 4 June 1997 when, as an authorised officer under s 61(2) of the PSA, Mr Growder informed an authorised person under s 63B that he was of the opinion that the applicant may have failed to fulfil his duty as an officer. Mr Growder is the third respondent to the application. The second decision he identifies was made by Ms Robyn Mary Orr on 4 June 1997 when, as a delegate of the relevant Secretary under s 63B, Ms Orr received the information from the third respondent previously referred to and decided to suspend the applicant from duty. Ms Orr is the first respondent to the application. The third decision he identifies was made by Mr John Neville Higham on 13 October 1997 when, as an authorised officer under s 61(2), Mr Higham decided under that subsection to charge, and did in fact charge, the applicant with failing to fulfil his duty as an officer. 2 In his amended application for review the applicant refers to decisions in addition to the three decisions identified in the Statement of Claim. He refers to a decision by the first respondent on 7 July 1997 to continue the suspension of the applicant, to a failure by the second respondent to decide if the applicant should be charged, and to a decision by the first respondent on 17 October 1997 to suspend payment of the applicant's salary. The second respondent's alleged failure to decide if the applicant should be charged is dealt with elsewhere in these reasons. Putting that particular matter aside I think it is appropriate to proceed by reference to the case pleaded in the Statement of Claim dated 4 November 1998 because that is the case the respondents came to meet at trial. 3 The applicant contends that each of the three decisions is a decision to which the ADJR Act applies and he claims orders under s 16 of the ADJR Act quashing those decisions and other orders. It is not immediately apparent in the circumstances of this case what orders would be appropriate under s 16 if one or more of the decisions were liable to be impugned. The parties seem to be agreed that a sum of money is at stake being lost salary between 13 October 1997 and 3 December 1998, although they are not agreed as to the amount. On 4 December 1998 the applicant was arrested and charged with offences involving the sending of explosive devices through the post. The applicant tendered a list of the names of persons to whom he sent the devices. They included the second and third respondents and a solicitor at the AGS who had handled the matter. The applicant was convicted on a number of counts and sentenced to imprisonment for a period of 9 years commencing on 26 May 1999 with a non-parole period of 5 years commencing on the same date. I do not need to explore the issue of relief any further because on my findings none of the decisions are liable to be impugned. 4 The applicant's dispute with the ATO, its officers and others has a long history. A good deal of the history is summarised in other judgments of this Court and I refer in particular to Dunstan v Farr (1999) 60 ALD 192; Dunstan v Human Rights and Equal Opportunity Commission (No 2) [2005] FCA 1885. 5 I will refer to each of the acts or events as a "decision" using that word in a broad sense. In due course, it will be necessary for me to address whether each of them is a decision within the provisions of the ADJR Act . It should be noted that neither party suggested that the conduct provisions of the Act are relevant (s 6). 6 The applicant alleges that in the case of each decision, there was an error of a type falling within s 5 of the ADJR Act . 7 In relation to the first decision, the applicant alleges that the third respondent committed a breach of the rules of natural justice (s 5(1)(a)) , that his decision involved an improper exercise of the power in s 63B of the PSA (s 5(1)(e)) and that there was no evidence or other material to justify the decision made by the third respondent (s 5(1)(h)). 8 In relation to the second decision, the applicant alleges that the first respondent committed a breach of the rules of natural justice, that the first respondent did not observe the procedures that were required by law to be observed in connection with the decision (s 5(1)(b)) and that the first respondent's decision involved an improper exercise of the power in s 63B of the PSA. 9 In relation to the third decision, the applicant alleges that similar errors (in terms of the errors identified in s 5 of the ADJR Act ) were made by the second respondent as were made by the first respondent in the case of the second decision and that, in addition, there was no evidence or other material to justify the decision made by the second respondent. 10 Each of the respondents submits that the decision made by him or her was not a decision to which the ADJR Act applied. It is submitted that none of the alleged decisions was a "decision" to which the Act applied as that word has been interpreted in the authorities. In the alternative, each respondent submits that the decision made by him or her did not involve an error of the type alleged by the applicant. In the further alternative, each of the respondents submits that even if the applicant overcomes the first two hurdles, relief should be refused in the exercise of the court's discretion. It is convenient to deal with the last submission at this stage. That submission must be rejected because none of the appeal or review provisions in the PSA were available to the applicant in the case of the decisions, or any one of them. No inquiry into the charges was ever held. 12 On the fourth day of the trial the applicant applied to amend his statement of claim. By his application to amend, the applicant sought to add two new causes of action each giving rise, so it was alleged, to a right to damages against the first respondent and the third respondent respectively. After hearing submissions, I refused the application to amend. It is convenient for me to set out my reasons for doing so at this point. 13 The proposed amendment contained an allegation by the applicant that the first respondent owed him a duty of care and that she acted in breach of that duty by certain conduct performed in the second half of 1997 and the first half of 1998. I will not outline the alleged breaches in detail but they include a failure to ensure an inquiry under s 62 was conducted and a failure to ensure statutory requirements were complied with after the applicant was notified that his position was excess. The proposed amendment also contained an allegation that the first respondent and the third respondent acted in breach of the applicant's contract of employment. Again, I will not outline the particulars of the alleged breaches. The proposed amendment also contained an allegation that the respondents' actions aggravated or exacerbated the applicant's pre-existing psychological condition, and that his psychological condition led to his loss of employment. Although it is not entirely clear, it would seem that the applicant sought by the amendment to claim damages from the respondents for the loss of his employment or, at the very least, for psychological injury. 14 In considering the application for leave to amend, I had regard to the well-known principles referred to in the decision of the High Court in The State of Queensland v J L Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. 15 The applicant sought to put forward new and quite different claims at a very late stage of the trial. It was clear, at least from the respondents' point of view, that it was likely that if the amendments were allowed, witnesses would have to be recalled and new witnesses may need to have been called. If the amendments were allowed, the trial would have had to be adjourned and it was likely that another pre-trial set of procedural orders would need to have been made. The applicant asserted, but did not establish to my satisfaction, that his application to amend had come forward only because of late discovery or disclosure of material by the respondents. He certainly did not establish that the application to amend could not have been made well before the commencement of the trial. In the circumstances, I did not think that it was appropriate to allow the amendments and I refused leave to amend. In those circumstances I did not need to consider some of the other grounds advanced (but not developed) by the respondents in opposing the application for leave to amend. Those grounds included an assertion that the proposed new causes of action were out of time and statute-barred and that some of the proposed new claims were unarguable as a matter of law. The bulk of his evidence-in-chief was given by way of affidavit and he was cross-examined by counsel for the respondents. He was in 1997 and remains obsessed by what he perceives to be the injustice involved in the way in which he was treated by the ATO, officers of the ATO and others. He tended to focus on matters which were not directly relevant to the issues in the proceeding. He is convinced that there was a conspiracy against him led by the third respondent. A good deal of his evidence was irrelevant to the issues raised in this proceeding and other "evidence" in his affidavits was in reality submissions about why I should find that the third respondent was motivated by improper considerations. I approach the applicant's evidence with considerable caution and I accept the evidence of the respondents where there is a conflict. For reasons I will give, I reject the applicant's evidence that he was given an access privilege to the ATO computer system in May 1997. Further, some of the evidence he gave directed to establishing possible innocent explanations for certain system violations was confusing, but even if accepted, did not rise anywhere near a level sufficient to establish an error of the type identified in s 5 of the ADJR Act . 17 In reaching these conclusions I have had regard to all the evidence in the case including the documentary evidence and I have borne in mind that before me the applicant was not legally represented. 18 The applicant called Ms Erin Holland as a witness. She is a Commonwealth public servant who is employed in the ATO. She appeared under subpoena. She was an honest and straightforward witness and I accept her evidence. The bulk of their evidence was contained in affidavits each of them had sworn. Each respondent was cross-examined at some length by the applicant. Each respondent was an honest and straightforward witness and I accept the evidence they gave. The respondents called Mr John Molineux and Mr David Pasch as witnesses. Mr Molineux is a Commonwealth public servant who is employed in the ATO. He took notes of an important meeting held on 4 June 1997 and involving the applicant, the first respondent and the third respondent. He was an honest and straightforward witness and I accept his evidence. Mr Pasch is what is called an AP compliance officer and he is employed by IBM Australia and New Zealand. At the request of the third respondent he prepared a report dated 12 June 1997 about a number of apparent system violations of the ATO's mainframe computer by the applicant during the period from January to May 1997. He was an honest and straightforward witness and I accept his evidence. 20 The applicant made various challenges to the evidence called by the respondents. Those challenges and my reasons for rejecting them, cannot be fully understood without first understanding the events surrounding the three decisions. I will now set out in chronological order the events surrounding the three decisions. The facts which follow are largely uncontentious but where there is a dispute I will indicate its nature. 21 It is convenient to start with a brief description of the ATO's computer system. The ATO has two different "computer environments". They were described by the third respondent and later by the second respondent as the mainframe environment and the TAXLAN environment. The ATO's two mainframes are production and development, respectively, and they are primarily used for the storage and "manipulation" of taxpayer data. They are also used to store and process the personnel records of ATO staff, including salary and leave details. These particular records are stored in a database known as the National Organisational Management Database (NOMAD). A database is a computer file which stores records which can be searched, sorted and updated by those persons who have appropriately authorised access to the database. The NOMAD database is run on the production mainframe. Every staff member of the ATO has access to their own salary and leave records in NOMAD, but they do not have access to the records of other staff. The only persons who have access to the records of other staff are those responsible for personnel administration. The applicant was not responsible for personnel administration. 22 The ATO's mainframe environment was run on IBM software and that included what the witnesses called the "RACF" software. The RACF software controlled a person's level of access to the mainframe system. A person's RACF profile was created by a system security administrator and it defined the person's authorisations in a mainframe environment. A person may have no authorisation or a "read-only" authorisation or an "update" authorisation. An unauthorised attempt to read or update data on the mainframe was recorded and was referred to as a system violation. 23 The TAXLAN environment is separate from the mainframe environment. It contains the ATO's word processing, spreadsheet and electronic mail software. It is possible to have access from any individual terminal to either the mainframe or TAXLAN environment. 24 The third respondent joined the Commonwealth public service in 1968 and he has considerable experience working in the development and use of computers, including training of staff, database development, quality assurance and applications development and support. He has also been involved in writing computer programs. From 1986 to 1997, he was Assistant Commissioner in the IT Services Line of the ATO. His branch consisted of 700 staff members employed on a national level. 25 The applicant was a Commonwealth public servant employed within the IT services group of the ATO, between 1987 and December 1995. The applicant was absent from work due to illness from 2 January 1996 to 15 December 1996. He returned to work in December 1996 and from that time to about 5 May 1997 he was under the direct supervision of the third respondent. His position was that of a senior information technology officer grade B. 26 When the applicant returned to work in December 1996 the third respondent was mindful of giving him such work as would give him the best opportunity to reintegrate into the workforce. The applicant was given a number of projects between his return to work in December 1996 and the date of his suspension from duty (that is, on 4 June 1997). The first was referred to as the "business resumption planning project" ("BRP project"). The third respondent considered that it would take the applicant two to three months to complete the BRP project. He considered that all the resources the applicant would need for the project were available in the TAXLAN environment, save perhaps for internet access for personal research for which the applicant never asked. He did not consider that the applicant would need access to the mainframe computers. He said that all the applicant was required to do was to carry out research and prepare a paper. The research could be done by discussion with others and reading books. By about mid-March 1997, the third respondent became concerned about the time it was taking the applicant to complete the project and by the extent to which he appeared to be accessing the ATO mainframes. 27 The third respondent arranged a second project for the applicant to undertake after he had finished the BRP project. The second project was referred to as the "applications development environment project" and the third respondent and the applicant discussed what it would involve in late March or early April 1997. The third respondent asked the applicant to prepare a document setting out the proposed terms of reference for the project. However, in late April or early May 1997, the third respondent became aware that the applicant had commenced legal proceedings against three Commonwealth public servants who worked within the ATO. The third respondent discussed this action with the applicant on 2 May 1997 and then on 6 May 1997, he decided that he could not allow the applicant to proceed with the applications development environment project because that project would involve the applicant working in close proximity to people he was pursuing by way of legal proceedings. The applicant sought from the third respondent written reasons for his decision, apparently under s 13 of the ADJR Act and, on 7 May 1997, the third respondent provided written reasons for his decision to the applicant. 28 The third and final project discussed by the third respondent and the applicant was referred to as the "single sign-on project". That project was discussed between them on or about 8 or 9 May 1997. The third respondent asked Mr Geoff Best to supervise the applicant during the period in which he was carrying out the project, and the applicant commenced working on the project on or around the dates it was discussed. 29 As I have said, the third respondent had become concerned about the applicant's usage of the mainframes and he asked Mr Best "to keep an eye" on the applicant's mainframe access. The third respondent said that on or around 6 or 7 May 1997, he received information from Mr Best that caused him to carry out further investigations into the applicant's mainframe usage. It is likely it was a little later than this bearing in mind the timing of the events referred to in the previous paragraph. On 7 or 8 May 1997 he asked Mr Graham Littlejohn, who was a computer specialist working under Mr Best, to perform an audit of the mainframe logs to check the applicant's usage. 2. At about the same time, he spoke to the first respondent about the ATO's options if the applicant had been making unauthorised use of its mainframes. 3. Within two to four days, Mr Littlejohn gave the third respondent material showing a number of system violations by the applicant. 4. This person could look at anything in the ATO's computer system. As the third respondent said, he has "the power to corrupt or destroy all the mainframe files that contain data about taxpayers". In late May 1997 the third respondent ascertained that the applicant's system violations were abnormal compared with his peer group and that the amount of time he spent on the mainframe from December 1996 to late May 1997 was over 200 hours. He viewed the problem as a serious one and one which had become urgent. He knew that the applicant was a disaffected staff member who was aggrieved by the actions of the ATO and of some of its staff. 31 At about this time, and quite independently of his concerns about the applicant's access to the ATO's mainframes, the third respondent prepared a report about the applicant's program for returning to work and how it had been carried out between mid-December 1996 and early May 1997. The report, which I will refer to as the return to work report, is dated 27 May 1997. 32 The third respondent decided to confront the applicant about his usage of the mainframes. He decided that at the same time, he would give him the return to work report. The third respondent had spoken to the first respondent by telephone in about mid-May 1997, and he had given her details of the applicant's work history and of his concerns about the applicant's usage of the mainframes. They had discussed the options as to how to proceed and the first respondent had later spoken to a case manager about the applicant's return to work programme and to Mr Molineux, who was based in the ATO's office in Melbourne, about discipline and suspension issues. 33 The third respondent prepared a series of questions to ask the applicant at a meeting he proposed to have with the applicant and he discussed those questions with the first respondent. They agreed that they would not give the applicant prior notice of the fact that they would confront him about his mainframe usage. They decided not to give the applicant notice because security issues were involved and they were concerned that if given notice, the applicant could take steps which could interfere with, or compromise information stored on the mainframe, or otherwise harm the system. 34 For her part, the first respondent held a delegation enabling her to suspend the applicant from duty under s 63B of the PSA. She was briefed on the apparent system violations by the third respondent. For his part, the third respondent was an authorised officer for the purposes of s 61(2) of the PSA and would, if he formed the opinion that the applicant may have failed to fulfil his duty as an officer, provide that opinion to the first respondent under s 63B(1)(b). The evidence is that of the two of them, the third respondent was the one with sufficient knowledge in information technology to determine the adequacy of any answers given by the applicant. Before the meeting, the third respondent had advised the first respondent that, for the reasons he gave, it "would be extremely difficult" to give the applicant other work which did not involve having any access to the ATO's computer systems. 35 The meeting took place on 4 June 1997. The applicant, the third respondent, the first respondent and Mr Molineux were present. Mr Molineux took notes of the meeting and those notes were subsequently produced in typewritten form. He did not otherwise play any part in the meeting. The third respondent asked the applicant the questions he had previously prepared. In the case of many of the violations the applicant said that he had no recollection of the matter about which he was questioned. The third respondent considered that the applicant's responses were unsatisfactory. He and the first respondent left the room in which the meeting was held. They then discussed the matter between themselves. The third respondent advised the first respondent that the applicant's responses were unsatisfactory and that until more was known his opinion was that the applicant was a potential risk to the ATO's computer systems and that until the matter was further investigated he ought to be denied any further access to those systems. The first respondent agreed and she decided to suspend the applicant. She formed the view that the interests of the ATO, particularly its security systems, were best served by suspending the applicant and conducting a more formal investigation. She signed a notice of suspension under s 63B of the PSA and gave it to the applicant. 3. TAKE NOTICE THEREFORE THAT I hereby suspend you pursuant to s 63B of the Act with effect from the time of delivery of this notice to you. 37 The third respondent and the first respondent discussed who should undertake the investigation and they agreed that it should be a person, to use the first respondent's words, "not immediately associated with" the applicant "in order to maximise the objectivity (and perceived objectivity on Colin Dunstan's part) --- of the investigation process". 38 Shortly after the meeting on 4 June 1997 the third respondent instructed Mr David Pasch to examine the apparent system violations of the ATO's mainframe computer by the applicant. Mr Pasch's duties at that time included general mainframe systems programming with the mainframe security product, RACF, as his specialisation. As part of his duties, he was responsible for the maintenance of the RACF product and also for implementing IBM's internal control systems, including maintenance and review of security reporting applications. Mr Pasch was required to assist the security administration teams with investigations of potential security interests. Comment in respect of the recorded behaviour of this User when compared with the access records of his peer group and a number of other ATO officers. An interpretation of TaxLan copies of a number of mainframe listings provided. Violations were recorded against a variety of data, the most serious being the read attempts to NOMAD production data and datasets belonging to users with security administration authorities, as well as an update attempt to commonly-used system EXEC library. Personal datasets were examined in an effort to understand the violations which had been generated. This investigation revealed analysis of DB2 security as well as analysis of fire call and access groups within RACF appeared to have been undertaken by the user. Both the violations generated, plus the analysis that appears to have been performed, can be interpreted as attempts to circumvent security controls and as such explanations need to be obtained. If no acceptable explanations are available, the ATO must consider its actions. The third respondent formulated a further series of questions based on Mr Pasch's report and on 16 June 1997 he wrote to the applicant enclosing Mr Littlejohn's report of system violations, the series of questions he prepared for the meeting to be held on 4 June 1997, the typewritten notes of that meeting and the further questions he prepared based on Mr Pasch's report. The applicant provided a detailed response by letter dated 18 June 1997. 42 Thereafter, the third respondent was involved in briefing the second respondent about the matter. Attempt to look at NOMAD production data. The material included in the data consisted of the personal details of ATO staff including salary and wage details. 2. Attempt to update a system library which is software which makes the operating system run. If the attempt had been successful the operating system may have been compromised and other users could have unwittingly performed activities that they had not intended to. Mr Pasch said that an attempt to update a system library is a common way of trying to "hack" into an operating system, and is termed a Trojan horse style of attack. 3. Attempt to access files used by various administrators, being database administrators, security administrators and other support personnel, and Mr Pasch expressed the view, which I accept, that if a person intended to compromise an operating system, an examination of these files would inform the individual of the security structures that had been set up and any weakness in the system. 4. Attempt to analyse firecall and access groups, that is to say, people that had after hours or emergency type access into ATO computer systems. Mr Pasch expressed the same view in relation to this matter as he did in relation to the matter referred to in 3. He has been employed in the computing field in a number of different capacities including writing, testing and installing computer programs and managing computer software, networks and databases. He commenced working within the ATO in 1986 and he was involved in the establishment of a new computer infrastructure. Thereafter he managed all of the ATO systems software, that is, all the software necessary for the operation of the computer system. From 1995 to October 1997 he was an Assistant Commissioner working in what was known within the ATO as the "individuals non-business line". That section within the ATO was involved in the management of computer systems for the income tax functions of the ATO. In October 1997 he became an Assistant Commissioner for Information Technology in the tax reform project. That position involved him in an examination of systems issues in relation to tax reform. 45 On 18 June 1997 the second respondent was asked by the third respondent to act as an authorised officer under the PSA in relation to a disciplinary issue involving the applicant. At the time, the second respondent was an authorised officer for the purposes of s 61(2) of the PSA. 46 In order to carry out his task under s 61(2) of deciding if the applicant may have failed to fulfil his duty as an officer and, if so, whether he should be charged, the second respondent collected information and communicated with the applicant. 47 As far as collecting information is concerned, the second respondent obtained copies of Mr Pasch's report, a transcript of the meeting held on 4 June 1997 and the applicant's letter to the third respondent dated 18 June 1997. He also obtained written confirmation of his authorisation. The second respondent gave evidence as to his understanding of Mr Pasch's report. He said that he understood Mr Pasch's first conclusion was that it was highly likely that the reports of the system violations were correct. Attempts to read computer files or datasets of persons within the ATO who are responsible for its security system. Those files or datasets may have within them the person's password or USERID. 3. Attempts to change a computer program that contains instructions upon which the mainframe computer systems run. This violation occurred on 28 April 1997. The second respondent understood that Mr Pasch was expressing the opinion that the applicant may have been trying to alter the scope of his authority to do things in the mainframe system in a way that bypassed the need to request the RACF administrator to change the applicant's RACF profile. The third respondent provided the bulk of the information with certain matters being confirmed by either Mr Littlejohn or Mr Best. The third respondent advised the second respondent of the following matters. First, after describing the nature of the BRP project the third respondent said the applicant did not require access to the mainframes for the purpose of writing his paper. Secondly, the third respondent advised the second respondent, and this matter was confirmed by Mr Best, that the applicant never approached them during the course of performing his employment about computer access levels. Thirdly, the third respondent advised the second respondent, and this matter was confirmed by Mr Littlejohn, that on examination of system violations by others there were, apart from password errors, which were relatively common, very few system violations by other people of the type recorded by the applicant. In that conversation you asked that I provide some material to define my role. Attached is a minute from HR Services which describes that role. I also mentioned that I would need to discuss the allegations with you as part of this role this week. Unfortunately, other commitments have generated delays to having that discussion. I will now try to arrange a time during the week commencing 7 July 1997. I will contact you to confirm a date and time. I was interviewed at some length by Mr John Growder and Ms Robyn Orr on 4 June 1997. 2. On Friday, 13 June 1997, Mr Growder advised me that an independent review of my work had been undertaken by an unnamed IBM consultant. 3. Consequent upon this "independent review", Mr Growder handed me a list of 19 questions --- on Monday, 16 June 1997. He directed that I furnish written answers within 2 days --- by close of business on Wednesday, 18 June 1997. 4. Mr Growder had in his possession on 14 June 1997 a reasonably detailed transcript of the interview that I attended on 4 June 1997. (See 1 above. On Wednesday, 18 June 1997, I supplied written answers to Mr Growder's 19 questions --- as per his direction of 16 June 1997. These answers are quite comprehensive, especially in view of the limited time that I was given to respond. My response is 8 typewritten pages in length. If not for being suspended from duty, I had intended to be on recreation leave for the period Monday, 7 July 1997 to Friday, 18 July 1997 inclusive. 2. My sister-in-law and her daughter are visiting from Paris, and are staying with my wife and me. b. In the interim, please carefully review the document I supplied to Mr Growder on 18 June 1997, together with the record of interview I attended on 4 June 1997. Commonwealth Crimes Act, 1914 --- Part III --- Offences Relating to the Administration of Justice. See sections 36A , 41 , 42 and 43 . Also within the Commonwealth Crimes Act 1914 , see section 5. 3. Commonwealth Sex Discrimination Act 1984 , section 94. My understanding that public servants are under an obligation to not follow unlawful directions. This would include directions to aid in the commission of a criminal offence. (I think this may be in the Public Service Act that is available on TAXLAN under the "Commonwealth Managers Toolbox" icon --- as is the text of the Commonwealth Crimes Act 1914 . In my opinion, the second respondent's conclusion was one reasonably open to him. 53 The second respondent was required to travel overseas in August 1997 and on his return at the end of September 1997, he had decided that it was appropriate to charge the applicant with misconduct under the PSA. He considered that the implications of the applicant's attempt at mainframe access could be very serious and that the circumstances surrounding the applicant's attempted security breaches warranted further investigation. He did not consider that counselling would be sufficient. 54 Two charges against the applicant were laid by the second respondent on 13 October 1997. PARTICULARS OF THE CHARGE are that on 28 April 1997 he used a computer located in Information Technology Services, Australian Taxation Office, Canberra, to force a system violation in seeking to update the SYS4.USER.EXEC data set belonging to Systems Software, Communications and Access Control staff, when it was not necessary to do so for his official duties. FURTHER PARTICULARS OF THE CHARGE are that he did so on the occasions, and in respect of the Computer Systems Data Sets, set out in the enclosed schedule. 56 On 28 July 1988 the Australian Government Solicitor ("AGS") wrote to the applicant and set out the reasons for the second respondent's decision. The second respondent adopted what was in the letter from the AGS as a correct statement of his reasons. However, I am instructed that Mr Higham's reasons for making his decision are as follows. Those were the attempted accesses referred to in the record of interview with you by Mr Growder, Ms Orr and Mr Molineux of 4 June 1997, and also referred to by the external consultant in his report of 12 June 1997.  Mr Higham also verified, in an interview with the external consultant, that the attempted accesses occurred from the consultant's own independent analysis; the potential significance of those attempted breaches; and that no other attempted breaches or actual breaches occurred.  Mr Higham verified that you were not advised of the (then) recent internal campaign in relation to "Your Userid, Your Access, Your Responsibility" on your return to work.  Mr Higham verified the nature of the accesses attempted by you to NOMAD (staff records) data.  Mr Higham verified that where you were confronted by limitations to your attempted accesses, you did not approach your supervisor to raise this as an issue, not [sic] attempt through your supervisor to get your access changed in support of your work needs or for any other reason.  Mr Higham assessed the attempted breaches and verified that they were not necessary for you to meet the requirements of your assigned work.  Mr Higham verified the nature of your work at the time through examination of terms of reference for the work and the reports produced by you (as supplied by Mr Growder).  Mr Higham spoke with you by telephone and wrote to you about meeting to discuss the attempted accesses. You responded in writing that you had comprehensively responded to questions by Mr Growder. Mr Higham therefore proceeded on the basis of those questions and your responses thereto.  Mr Higham was unable to determine the motives behind the alleged attempted breaches. Mr Higham did not pursue this aspect as it was not, in his opinion, essential to the notion that misconduct may have occurred.  Mr Higham considered that you may have attempted to breach security on the basis that the attempted accesses occurred, that a number of those, at least, were not necessary for the requirements of your work and that you, contrary to Mr Higham's expectations, did not raise issue with the limitations to your access ability. Officers are not entitled to access merely because it would be convenient for them to know or by virtue of stsus [sic], rank, office or level of security clearance.  Mr Higham considered counselling as an option but, in the light of the potential seriousness of the matter, decided to proceed with the charges. Mr Higham noted that if the system had not detected and inhibited the attempted accesses then there could potentially have been outcomes resulting in criminal charges being made, based on the data that could have been accessed.  Mr Higham also took into account legal advice. 58 As I have said, the applicant was arrested on 4 December 1998. By letter dated 20 March 2001, the applicant was given notice that his employment was terminated. 59 With this factual background in mind I turn to a particular matter involving the applicant's evidence and the applicant's challenges to the evidence given by the respondents and their witnesses. 60 The applicant gave evidence that he reported a security problem to his immediate supervisor, Mr Geoff Best, in May 1997. He said that he did that on 21 May 1997 and that, as a result, he and Mr Best approached the director of computer software, Mr Greg French. Following that approach the applicant said that he was given a read access in relation to technical reference manuals for the resource access control facility. 61 The relevance of this evidence is not immediately apparent. The appellant submitted that it was relevant to "motive" in that it was unlikely (he argued) he would report a security problem if he were attempting to breach security, and it was unlikely that the ATO would give him additional access if it considered that he was a security risk. He also submitted that it showed that he asked for additional access if he needed it. 62 The evidence of the applicant with respect to this topic was not easy to follow. I have considered the evidence, and I have concluded that an accurate summary of what occurred is set out in the two documents the applicant produced at about the relevant time, namely, a discussion paper dated 8 May 1997 and entitled "Single Sign-on --- Some Issues" and his response dated 18 June 1997 to the third respondent's letter dated 16 June 1997. It seems that it was the applicant's opinion that there were one or more security exposures into the mainframe CICS and/or DB2 environment as a result of installation steps for the Composer development tool, and that some time around 21 May 1997 he mentioned his opinion to Mr Best. I cannot accept that as a result of mentioning the matter to Mr Best the applicant was granted additional access. It seems to me that that is very unlikely in view of the other evidence in the case. Furthermore, it seems to me that it is highly likely that if he had been granted additional access the applicant would have referred to that fact in his correspondence. There is no assertion in his correspondence that he was granted additional access. My findings as to what occurred do not advance the applicant's case because, as the second respondent said, the applicant's experience and knowledge about the ATO's security regime and RACF meant that he would know that it was wrong for a user to attempt to obtain access to areas of the mainframe that were not permitted by the user's RACF profile. 63 The first respondent, as delegate of the Commissioner of Taxation, appointed Ms Holland to hold an inquiry into the charges of misconduct against the applicant. That was done under s 62(1) of the PSA on 17 October 1997. The applicant was advised by letter of Ms Holland's appointment. In the result, Ms Holland did not hold an inquiry into the charges of misconduct against the applicant and, as I have said, Ms Holland's evidence does not assist me in resolving the issues in this proceeding. 64 As far as the applicant's challenges to the evidence of the third respondent are concerned, a key aspect of the applicant's case involved the inferences which he submitted should be drawn from certain conduct by the third respondent in 1996 and 1997. I will mention each of the acts and my findings in relation to each of them. The applicant asked me to draw an inference that the third respondent's conduct on 4 June 1997 was motivated by a desire to retaliate against the applicant because the applicant had brought legal proceedings against him. 65 First, it seems that as part of his longstanding complaints against the ATO, officers of the ATO and others, the applicant issued proceedings in this Court against a number of persons, including the third respondent and Mr Geoff Seymour in April 1997. These proceedings consisted of claims for judicial review under the ADJR Act against the Human Rights and Equal Opportunity Commission and other public authorities and civil claims, being claims for misfeasance in public office and defamation, against various Commonwealth public servants, including the third respondent and Mr Geoff Seymour (ACD 30/1997) and private criminal prosecutions against Mr Seymour (ACD 31/1997) and the third respondent (ACD 32/1997) respectively, alleging in each case, to use the applicant's words, "acts of victimisation". The applicant asserted that the proceedings were served on the third respondent and Mr Seymour on 13 May 1997 and I did not understand that to be disputed by the respondents. I find that proceedings broadly of the nature I have described were issued and served. 66 Secondly, it seems that on 27 May 1997 the third respondent wrote to Mr Best advising him that the ATO did not support the applicant's use of recreational leave to undertake his continuing legal actions against fellow staff members and that in the latter situation, "the ATO requires that Mr Dunstan pursue these actions while on leave without pay". I find that an electronic mail message to this effect was sent by the third respondent to Mr Best. The applicant put to the third respondent that such a direction was illegal. The third respondent did not agree with that suggestion and it is not one made out on the evidence. 67 Thirdly, the applicant submitted that there was a pattern of the ATO asking him to do unsuitable jobs and that the third respondent was part of such a scheme and he pointed to the second project, namely, the applications development environment project, assigned to him by the third respondent as an unsuitable job. I reject this suggestion. Having considered the evidence, I am satisfied that the third respondent made all reasonable and proper efforts in the circumstances, including his other duties and obligations, to reintegrate the applicant into the working environment. 68 Fourthly, the applicant submitted that it was significant that a number of events "happened" on 27 May 1997. This was in a context, he submitted, of the first respondent giving instructions to defend on behalf of the third respondent in relation to the proceedings against him. I have already referred to the electronic mail message from the third respondent to Mr Best on 27 May 1997. In addition, at about this time, the third respondent was gathering information about the applicant's usage of the mainframe. Furthermore, the return to work report in relation to the applicant is dated 27 May 1997 although, as the third respondent pointed out, it is likely the report was being prepared over a period of time prior to that date. The fact is that it is simply not of any consequence to say that a number of events "happened" on 27 May 1997. 69 Fifthly, the applicant submitted that there were a number of inconsistencies in the third respondent's evidence. It is not entirely clear whether the applicant submits that these "inconsistencies" are relevant to the third respondent's motive or his credit, or both. In the result, it matters not because insofar as there were inconsistencies they may be explained on the basis that the relevant events happened many years ago. It is true that the third respondent probably first spoke to the first respondent about the applicant slightly later than he deposed to in his affidavit and that he appears to have received a memorandum in relation to the applicant well after his "briefing meeting" with the second respondent, but I do not think that there is anything sinister about these departures from his evidence-in-chief. Nor is there anything significant about the fact that in his terms of reference to Mr Pasch the third respondent referred to "attempted" access or updates whereas in his briefings to the first respondent he might have suggested that one of the violations involved actual access. Again, there is nothing remarkable about the third respondent having concerns (which developed over time) about how long the applicant was taking to complete the first project and at the same time making a general assessment that the applicant was working well. 70 Sixthly, there is a question of the security violations themselves. It is trite to say that this is an application for review under the ADJR Act and not a review of the merits of any of the decisions identified by the applicant. It is not for me to decide if the violations took place and, if so, for what reason. That said, I suppose it is necessary for me to determine if there was material upon which it might be concluded that there were violations and that there may be a reason for them which bears upon the security and integrity of the ATO mainframe system. I have no hesitation in concluding that there was material suggesting that the violations had taken place. Indeed, the applicant did not appear to suggest otherwise. Furthermore, there was material upon which it could be considered that the violations were not within the scope of the tasks the applicant was directed to carry out and that at no time had he sought additional access to the ATO mainframe. Again, I did not understand the applicant to contend otherwise, although if he did, I would reject the contention. The applicant's submissions seemed to be that in good faith he went beyond the scope of the work he was asked to carry out, and that this should have been, and indeed was, known to the third respondent and other officers employed in the ATO. It is true that in the third respondent's return to work report, he noted that in his BRP project paper the applicant went beyond the terms of reference, but there is no evidence that clearly explained each of the violations in terms of the scope of the work the applicant was directed to do. The evidence fell a long way short of establishing that there was no evidence or other material to support an opinion that the applicant may have failed to fulfil his duty as an officer. In fact, having regard to the third respondent's evidence and Mr Pasch's report, there clearly was evidence to support such an opinion. 71 Finally, the applicant referred to the fact that by 18 June 1997 the third respondent had received legal advice that given the current litigation, the investigating officer should be from outside the IT services group of the ATO. That advice relates to the task ultimately carried out by the second respondent and does not bear upon the third respondent's actions on 4 June 1997. 72 I return then to the key allegation made by the applicant in relation to the third respondent, namely, that his actions, culminating in his action on 4 June 1997, were motivated by a desire to retaliate against the applicant in light of the legal proceedings the applicant had brought against the third respondent. I have considered the above points and all the evidence in the case and I reject that contention. I find that the third respondent's actions were not motivated by a desire to retaliate. I find that the third respondent acted in good faith and genuinely formed the opinion that the applicant may have failed to fulfil his duties as an officer. I find that there was evidence or other material to support that opinion, and to justify the forming of that opinion. 73 As far as the applicant's challenges to the evidence of the first respondent are concerned, a number of matters were put to her by the applicant. She was asked about her conduct in early 1998 when she was dealing with the applicant's application for the payment of salary on hardship grounds. Nothing she said reflected adversely on her conduct in 1997, or on her credit. She was questioned about her decision to suspend the applicant from duty on 4 June 1997. What the applicant seemed to put to her was that as she acted on the third respondent's opinion and that, as his purpose was an improper one, namely, a desire to retaliate, her purpose was an improper one. As I have found that the third respondent's purpose was not an improper one, this submission must fail. It was also put to the first respondent that she did not remember certain matters. To a point it was established that she did not have a clear recollection of all matters, but she was a credible witness and the fact that her recollection was not perfect is unsurprising having regard to the lapse of time between the relevant events and the time at which she gave evidence. 74 The first respondent was asked if she took into account the likely or possible effects of suspension on the applicant's mental health. She said that she was aware of the applicant's general circumstances, but her primary concern was security to the ATO. There is no error here. The first respondent was also asked if it would have been relevant for her to know that the applicant had, to use the applicant's words, "spoken with the director of computer security on what [he] believed would be the most effective method of overcoming that security problem". The effect of her evidence was that she did not know that "fact" and that she could only proceed on the basis of the information given at the interview. She described that information as "very little information forthcoming from you on that day". The first respondent was questioned about some matters which appeared in the typed record of interview which did not appear in the handwritten notes to the interview or appeared only in incomplete form. I am satisfied from the evidence of Mr Molineux referred to below that, subject to one matter, Mr Molineux's typewritten record is an accurate record of the interview. The one matter is that I am satisfied from the evidence of the first respondent that she did ask the applicant if he had any comments to make after she had informed him of the course she was going to take, even though that does not appear in the typed record of interview. In any event, it does not seem to me to be a matter of any real significance. 75 As far as the applicant's challenges to the evidence of the second respondent are concerned, the applicant focused on the fact that on his case he had reported to the Director of Computer Security that a weakness existed in the security of the ATO taxpayer data and the claim that there may be innocent explanations for the access violations. If Mr Dunstan had made such a complaint, he did not ever tell me about it. The second respondent said that neither the applicant nor Mr Best told him that the applicant had reported a weakness in the security of the ATO's taxpayer data to Mr Best. None of the evidence given by the second respondent on this topic affected his credibility or supported any of the grounds upon which his decision is challenged. 78 The other matter put to the second respondent was that certain access violations could be explained by quite innocent reasons, including accident, assisting another member in the ATO and, although this is not entirely clear, the access violation being deliberately engineered by another person. 79 The second respondent did not necessarily agree with the examples being put to him but he said that in any event, his role was to establish whether there may have been improper conduct, and the officer conducting the inquiry would "go into far more detail than the process I was undertaking to establish whether inappropriate conduct may have occurred". Again, nothing the second respondent said on this topic affected his credibility or supported any of the grounds upon which his decision is challenged. 80 As far as the evidence of Mr Molineux is concerned, the following emerged from his evidence. After the applicant had been suspended, but before 30 July 1997, the ATO took legal advice from the AGS. The legal advice was dated 29 July 1997 and, generally speaking, it was to the effect that there was no basis upon which to charge the applicant with misconduct. Mr Molineux thought that the advice was wrong and he sought urgent advice from a barrister, Mr Murray McInnis. Mr McInnis's advice is an exhibit before me. Mr Molineux denied this and I have no reason to doubt his denial. Leaving aside the question of how, in any event, such an assertion could affect the second respondent's decision, I do not think I should draw the inference that officers in the ATO were out to "get" the applicant. Those officers were entitled to get a second opinion and that is what they did. I have no reason to think that Mr Molineux's view that the advice from the AGS was wrong was not held in good faith. The second opinion supported the action that was taken thereafter. 82 As far as Mr Pasch is concerned there was nothing in his cross-examination which needs to be detailed. 84 Division 6 of the PSA dealt with Discipline and s 55 in that Division was an interpretation section. Section 63D conferred a right of appeal on an officer who had been the subject of a direction made under s 62(6) other than in minor cases. Section 63G provided for a procedure whereby, in certain circumstances, findings on an inquiry or an appeal could be reviewed by a body called the Merit Protection and Review Agency. 90 In this case, the applicant was suspended from his duties on 4 June 1997. As it happened, both the third respondent and the first respondent were officers authorised for the purposes of s 61(2) of the PSA and both had the delegated authority to make a decision to suspend an officer from duty. As I said earlier in these reasons, in this case the third respondent acted as the officer authorised for the purposes of s 61(2) and he informed the first respondent that he was of the opinion that the applicant may have failed to fulfil his duty as an officer. The first respondent then exercised the power under s 63B to suspend the applicant from duty. The applicant was suspended with salary and he continued to be paid his salary until he was charged on 13 October 1997. On 13 October 1997 the second respondent, who was an officer authorised by the relevant Secretary for the purposes of s 61(2) formed the opinion that the applicant may have failed to fulfil his duty as an officer and, decided that he should be charged and he charged the applicant. 91 Although Ms Holland was appointed to hold an inquiry under s 62(1) of the Act, an inquiry was never held. 92 The respondents' submission that none of the decisions were decisions to which the ADJR Act applied requires an examination of that Act and various authorities. Section 3 of the ADJR Act provides, relevantly, that a decision to which the Act applies "means a decision of an administrative character made, proposed to be made, or required to be made" under an enactment. (3) Where provision is made by an enactment for the making of a report or recommendation before a decision is made in the exercise of a power under that enactment or under another law, the making of such a report or recommendation shall itself be deemed, for the purposes of this Act, to be the making of a decision. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment. Another essential quality of a reviewable decision is that it be a substantive determination. The Chief Justice also said that, having regard to the context, the reference in s 3(2)(g) to "doing or refusing to do any other act or thing" should be read as a reference to the exercise or refusal to exercise a substantive power. The rationale underlying Bond is that Parliament could not have intended the Judicial Review Act to be a vehicle for judicial review of every decision of a decision-maker under a Commonwealth enactment. Some decisions will have a real impact upon a person's rights, privileges or obligations; some will have no such impact, while others are mere stepping stones which may lead ultimately to the making of a decision which does affect the person's position. Counsel for the respondents also referred to two authorities which discussed the provisions in the PSA which provisions I must consider. First, he referred to an earlier case involving the applicant, Dunstan v Farr (1999) 60 ALD 192, and a decision said to have been made on 7 July 1999 and submitted that it was authority for the proposition that a decision to suspend an officer under s 63B of the PSA was not a decision to which the ADJR Act applied. He referred to the reasons of Weinberg J and particularly what his Honour said at 199 [41]. It is true that a decision in issue in that case was a decision to suspend from duty and an invitation to make submissions as to a hardship payment. However, the focus of the case was the hardship payment of salary and the decision to suspend from duty does not appear --- so far as I can tell from the report --- to have been an issue. Weinberg J did not elaborate on his conclusion that the decision "plainly" lacked the characteristics of a decision which may be the subject of a review under the ADJR Act . In the circumstances, I would not treat the decision as authority for the proposition that a decision to suspend from duty under s 63B of the PSA is not a reviewable decision under the ADJR Act . 97 Secondly, counsel for the respondents referred to Buonopane v Secretary of the Department of Employment, Education and Youth Affairs (1998) 87 FCR 173 and submitted that this case was authority for the proposition that a decision to charge an officer under s 61(2) of the PSA is not subject to the rules of natural justice. At the appeal stage there is to be a formal hearing. At the suspension stage the officer is to be given an opportunity to be heard unless particular circumstances exist which make it inappropriate. At the inquiry stage, a formal hearing is not required, but the officer has to be told of the misconduct the subject of the charges and given an opportunity to make a statement in relation to the misconduct. The contrast between this stage (s 62(3) and (4)) and the s 61(2) stage is eloquent. The limited right conferred on the officer under s 61 is to have a copy of the charge furnished to the person specified in subs (3). To import into s 61(2) one of the procedural steps required at the s 62 stage would be to alter the carefully crafted scheme devised by Parliament. This is not a case where Parliament is silent on procedural fairness. It has specified the stages at which fairness is required and the content of that fairness. The intention is manifest that at the earliest stage the officer is not to have the opportunity to make representations as to why charges should not be made against him. ... I will return to the question whether the Court should supplement the statutory scheme after considering the complaint that the applicant had not been afforded procedural fairness at the inquiry stage. 99 In my respectful opinion, his Honour's conclusions are correct and should be followed. 100 In my opinion, the first decision identified by the applicant was not a decision to which the ADJR Act applied. The third respondent formed an opinion that the applicant may have failed to fulfil his duty as an officer and conveyed that opinion to the first respondent. That is not the making of a decision within s 3(2) or (3) of the ADJR Act . Nor is it a decision as that concept has been explained in the authorities. It is not final or operative and determinative. It is a matter the relevant Secretary or his delegate takes into account in deciding whether to take one or other of the courses of action referred to in s 63B(c) or (d). 101 In my opinion, although the matter is not entirely clear, the second decision identified by the applicant was a decision to which the ADJR Act applied. Suspension has an immediate impact in that an officer is precluded from performing his ordinary duties. Parliament has seen fit to confer an opportunity to be heard, albeit, one capable of being defeated in certain circumstances, before a decision to suspend is made. Furthermore, in the case of an officer who has been charged previously with misconduct, suspension operates to bring the payment of the officer's salary to an end. All these considerations suggest an act in relation to a substantive matter and one which is final or operative and determinative and therefore a decision. It is true that s 63B also applied where an officer is first suspended and later charged (in fact that was the case here) and that in such a case, it is the act of charging that brings the payment of the officer's salary to an end. In that case it might be said that both the act of suspension and charging are decisions or at least the act of charging is a decision. I incline to the view that whatever the sequence of events, as a matter of substance the act of suspension is a decision within the ADJR Act and the act of charging is not. The act of charging involves no final conclusions of fact and an inquiry at which the officer concerned has a right to be heard as defined in s 62(3), must be held without undue delay. However, I do not need to decide the point because even treating both the act of suspension and the act of charging as decisions there is simply no ground upon which to impugn either decision. 103 The first ground of challenge to the first decision is that there was a breach of the rules of natural justice in that the applicant was not given notice of the allegations against him, he was not given a reasonable opportunity to respond to them, he was not given an opportunity to be represented at the meeting held on 4 June 1997 and he was not given prior warning that his use of the ATO computer facility was, or may be, inappropriate. It is also alleged that the third respondent should have disqualified himself. 104 In my opinion, the answer to this ground of challenge is that the rules of natural justice did not apply to the first decision. They did apply to the second decision to the extent provided by s 63(1C) of the PSA. In my opinion, Parliament has made clear the extent to which the rules of natural justice apply to the decision to suspend. The first decision is no more than one element or aspect of that decision. For reasons I will give, the challenge to the second decision on the ground of a breach of the rules of natural justice fails. I reject the submission that the third respondent was bound to disqualify himself because of the legal proceedings issued against him. 105 The second ground of challenge to the first decision is that it involved an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made. The particulars of this ground of challenge are that (so it was said by the applicant) the third respondent took into account irrelevant considerations, namely, that the applicant had commenced criminal and civil proceedings against him, that he wished to remove the applicant from his place of employment and that he wished the applicant to have no entitlement to salary payments while conducting legal proceedings against him. This ground of challenge fails. For reasons I have already given, I am not satisfied that the fact that the applicant had commenced criminal and civil proceedings against the third respondent played any part in the opinion formed by the third respondent under s 63B of the PSA. I am not satisfied on the evidence that the third respondent wished to remove the applicant from his place of employment or that he wished the applicant to have no entitlement to salary payments while conducting legal proceedings against him. 106 The third ground of challenge to the first decision is that there was no evidence or other material to justify the making of the decision. That use was also consistent with the manner in which other officers of the Service working in the ATO performed their duties. Rajamanikkam and SGFB dealt with provisions in the then Migration Act 1958 (Cth) which were in similar terms to s 5(1)(h) and s 5(3) of the ADJR Act and, in Rajamanikkam , the Justices made it clear that their analysis also applied to the ADJR Act provisions: at 226 [1], 234 [32]-[34] per Gleeson CJ at 240 [54] per Gaudron and McHugh JJ and at 244 [74] and 255 [110] per Kirby J. An important question debated in those authorities is whether the ground in s 5(1)(h) is made out if one of the matters in s 5(3) is established, or the ground in s 5(1)(h) is made out only if there was no evidence or other material to justify the making of the decision and one of the matters in s 5(3) is established. 109 Sitting as a single Judge of the Court, I think the issue I have identified has, as far as the relationship between s 5(1)(h) and s 5(3)(b) is concerned, been resolved by the Full Court of this Court in SGFB . A party seeking to make out the ground in s 5(1)(h) by establishing that the decision-maker based his decision on the existence of a particular fact and that fact did not exist must also establish that there was no evidence or other material to justify the making of the decision. 110 The allegations in this case suggest that the applicant seeks to make out the ground in s 5(1)(h) by reference to s 5(3)(a). The question whether he does so only if he establishes the matter in s 5(3)(a) and that there was no evidence or other material to justify the making of the decision or whether he does so simply by establishing the matter in s 5(3)(a) has not been authoritatively determined. I did not have the benefit of submissions on the point and, indeed, the applicant was not legally represented. I do not need to resolve the difficult question raised because even on the assumption most favourable to the applicant, that is to say, that all he need do is establish the matter in s 5(3)(a) , the ground in s 5(1)(h) is not made out. 111 One of the matters which must be satisfied in order to make out the ground in s 5(3)(a) is that the particular matter was one the decision-maker was required by law to find established before reaching the decision in question. In considering that matter, it may be noted that there is some artificiality in the assumption upon which I am proceeding, namely, that the act of the third respondent in forming the opinion that the applicant may have failed to fulfil his duty as an officer and informing the first respondent of that opinion is a decision to which the ADJR Act applies. However, proceeding on that assumption, it might be said that the particular matter the third respondent was required by law to find established before reaching his decision was that the applicant may have failed to fulfil his duty as an officer. If that is so, it cannot be said that there was no evidence or other material from which the third respondent could reasonably be satisfied of that matter. There was ample evidence upon which the third respondent could form the opinion that the applicant may have failed to fulfil his duty as an officer. 112 The alternative is that the applicant contends that the particulars are "particular matters" within s 5(3). The particulars are expressed in positive terms and I think to make sense of the allegation it is necessary to construe the particulars as in effect allegations that there was no evidence or other material from which the third respondent could reasonably be satisfied that the applicant's use of the ATO computer facilities was inconsistent with the manner in which he had been performing his duties since he commenced work with the ATO and not in accordance with the requirements of his duties and inconsistent with the manner in which other officers of the Service working in the ATO performed their duties. The immediate difficulty with this submission is that these are not particular matters required by law to be established before the third respondent formed his opinion and conveyed that opinion to the first respondent. Alternatively, for reasons I have already given, it cannot be said that there is no evidence or other material from which the third respondent could reasonably be satisfied that these matters were established. There was ample evidence that the applicant's computer usage was outside the scope of his duties and inconsistent with computer usage by other employees within the ATO. 113 The applicant has failed to establish the matters in s 5(3)(a). 114 Because the applicant was unrepresented, I have considered whether he might have been able to bring his particulars within s 5(3)(b). I have concluded that he could not. The applicant has failed to show the non-existence of any fact relied upon by the third respondent, let alone any "particular fact". Moreover, there was evidence justifying the decision of the third respondent and, as I have already said, showing that there was no evidence is an additional hurdle to review under s 5(1)(h): SGFB . Putting to one side the allegation in relation to the first decision that the third respondent should have disqualified himself, the particulars of breach are in similar terms to the particulars of breach given in relation to the first decision. The first respondent considered whether the applicant should be given notice of the matters of concern before the meeting on 4 June 1997 and decided that because of security concerns he should not be given such notice. On the evidence before me that was a conclusion which was reasonably open to her. The applicant was given notice of the matters of concern at the meeting on 4 June 1997 and to that extent he was given the opportunity to respond. If an opportunity to be heard within s 63B(1C) is satisfied by the notice he was given at the meeting, then the obligation in the subsection was satisfied. To the extent that it was not satisfied by that action, the subsection was nevertheless satisfied because in that event the case fell within s 63B(1C)(b). 116 The second ground of challenge in relation to the second decision is that s 63B(1C) (incorrectly referred to in the statement of claim as s 63B(1A)) was not complied with. This ground of challenge fails for the reasons given in relation to the first ground of challenge. 117 The third ground of challenge to the second decision is that the first respondent improperly exercised the power in s 63B(1) in that she exercised the power at the direction or behest of the third respondent (s 5(2)(e)) of the ADJR Act ). Section 63B(1) provides for an officer authorised for the purposes of subsection 61(2) to inform a person in the position of the first respondent that he is of the opinion that an officer may have failed to fulfil his duty as an officer. That was what occurred here and there is no evidence to suggest that the first respondent did not consider the matters she was required to consider under the section. I find that she did and, in those circumstances, the third ground of challenge fails. 118 All grounds of challenge to the second decision fail. For the reasons I have already given, ([97]-[99] above) the rules of natural justice did not apply in relation to the third decision. If the rules of natural justice did apply in relation to the third decision, nevertheless, there was no breach of those rules. The applicant first alleges that there was unreasonable delay in making the decision. It is convenient to consider this particular with the second ground of challenge which is that the procedures that were required by law to be observed in connection with the making of the decision were not observed in that the decision was not made "as soon as practicable" as required by s 61(2) of PSA. 120 As I have already said (at [55]), at about the time the second respondent made his decision to charge the applicant and in fact charged him, he prepared a report which set out the course of events and details of his decision. It is in similar terms to the statement of his reasons set out in the letter from the AGS dated 28 July 1998 (see [56] above). There was a draft of the report as early as 11 July 1997, and other than the date and the second respondent's name, the draft report and the report are in the same terms. The applicant submitted that in those circumstances the second respondent had been guilty of unreasonable delay and had failed to decide to charge, or to charge, or both, "as soon as practicable" after forming the opinion required by s 61(2). 121 The second respondent gave evidence, which I accept, that he was very busy in July and August 1997 and that he was required to travel overseas in order to carry out a research project. He was overseas from late August to late September 1997. 122 On the facts, I do not think there has been unreasonable delay in making a decision. Nor is the related submission that the decision was not made as soon as practicable as required by s 61(2) of the PSA made out. It has not been established on the evidence that the second respondent formed his opinion at one point in time and decided to charge and did charge the applicant at a different and later point in time. Even if that fact had been established, I am not satisfied that the decision to charge and in fact the charging of the applicant were not done "as soon as practicable" after the relevant opinion was formed. I might add that even if I had found that the second respondent had not made the decision "as soon as practicable" after he formed the opinion required by s 61(2), it would not necessarily follow, in circumstances in which the second respondent did go on to make a decision, that that constituted a reviewable ground within s 5(1) of the ADJR Act . I doubt whether it could be said that the ground that the procedures required by law to be observed in connection with the making of the decision were not observed (that is, s 5(1)(b)) was engaged, and, even if it were, that it would be an appropriate case for an order under s 16(1)(a) quashing the decision to charge. It seems to me that in a case where a decision is not made "as soon as practicable" within s 61(2) there is a good deal to be said for the proposition that the only remedy for an aggrieved party is an order for review in respect of a failure to make a decision under s 7 of the ADJR Act . 123 As part of his first ground of challenge the applicant alleges that he was denied any proper opportunity to defend himself. This particular may be considered in conjunction with the third particular, namely, that before 4 June 1997 the applicant was never advised that his manner of use of the ATO computer facility was or could be improper and, in particular, he was never advised in relation to the internal campaign in relation to "Your USERID, Your access, Your responsibility" or the ATO's computer security policy changes implemented while he was on sick leave and prior to December 1996. I reject these contentions. It seems to me, that it was open to the second respondent to conclude from the applicant's correspondence that the applicant had already put forward all of the information that he wished the second respondent to consider and that he did not wish to meet with the second respondent and, indeed, he did not think that there was any legitimate reason for him to speak to the applicant. 124 I have already dealt with the second ground of challenge to the third decision. 125 The third and fourth grounds of challenge to the third decision are related because the particulars are substantially the same in each case. The third ground of challenge is that the second respondent's decision involved an improper exercise of the power in s 61(2) in that the second respondent took irrelevant considerations into account in exercising the power and failed to take relevant considerations into account. Five particulars are alleged (Paragraphs A-E) one of which identifies a relevant consideration not taken into account and four of which identify four irrelevant considerations taken into account. 126 The fourth ground of challenge is that there was no evidence or other material to justify the making of the decision that "he could reasonably be satisfied that the applicant may have failed to fulfil his duty as an officer within the meaning of s 56(d) of the Act such as to justify charging him with misconduct within the meaning of sections 55 and 56 of the Act". Seven particulars are given, the first five of which are identical to the five particulars given in relation to the third ground of challenge. It is convenient at this point to deal with the sixth and seventh particulars in relation to the fourth ground of challenge and then return to the five particulars common to both grounds of challenge. 127 The sixth particular, paragraph F, is that the second respondent's decision was unreasonable because the applicant's use of the ATO computer facilities during the period December 1996 to April 1997 was not qualitatively different from the use made of those computer facilities by other ATO officers during that period. I do not need to consider whether this is an attempt to plead the ground identified in s 5(1)(e) and (2)(g) of the ADJR Act , or whether if the asserted fact were established that would be sufficient to make out the ground because the asserted fact has not been established. The second respondent relied on information provided to him by the third respondent who in turn had a report from Mr Littlejohn, which supported the conclusion that "apart from password errors (which were relatively common) there were very few systems violations by other people of the type recorded by Mr Dunstan", to use the third respondent's statement to the second respondent. Mr Littlejohn gave the second respondent information to the same effect. The opinions of Mr Pasch, set out in his report, also support this conclusion. 128 The seventh particular, paragraph G is that there was no evidence that the applicant had improperly accessed and/or improperly attempted to access prohibited data. It is not necessary for me to consider whether this is an attempt to plead the ground in s 5(1)(h) or s 5(1)(f) of the ADJR Act . The particular implies a task which was not the task the second respondent was required to undertake. He was required to determine whether the applicant may have failed to fulfil his duty as an officer and, if so, whether he should be charged. There was ample evidence before the second respondent that attempted breaches may have occurred and that the consequences of those breaches would or may be extremely serious. 129 Particular A of the third and fourth grounds of challenge is that the second respondent failed to take into account four matters. First, it is alleged he failed to take into account "the full requirements of the applicant's duties". It was certainly relevant for the second respondent to take into account the nature of the applicant's duties and, in my opinion, he clearly did that. The applicant did not identify the duties he alleges he was required to carry out which were not taken into account by the second respondent and even if the applicant went beyond his duties the evidence went nowhere near establishing that this would explain all of the system violations. Secondly, it is alleged that the second respondent failed to take into account the fact that the applicant reported to the ATO's Director of Computer Security that a serious weakness existed in the security of ATO taxpayer data. I refer to my findings in [62] above. I do not think it is a relevant consideration or, if it is, in my opinion it is "so insignificant that the failure to take it into account could not have materially affected the decision": Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 46 per Mason J (as he then was). Furthermore, the second respondent said in his reasons that he could not make a finding as to the applicant's motive. Thirdly, it is alleged that the second respondent failed to take into account the fact that at no time did the applicant breach ATO security. The second respondent took into account the fact that the system violations were attempted breaches of security. Having regard to the decision he was required to make, he was not required to go any further. Fourthly, it is alleged that the second respondent failed to take into account that the applicant's use of the ATO computer facilities during the period December 1996 to April 1997 was not qualitatively different from the use made of those computer facilities by other ATO officers during that period. As I said earlier, the asserted fact was not established and, indeed, the contrary was established. 130 Particulars B, C and D can be dealt with together. Particular B is an allegation that the second respondent improperly took into account the assertion that taxpayer data could have been improperly accessed if the applicant succeeded in accessing the computer facilities when the computer facilities accessed did not contain any taxpayer data. This seems to me to contain two allegations: first, that there was an error of fact and the computer facilities to which access was attempted did not contain taxpayer data and, secondly, assuming that fact it would be irrelevant. Particular C is an allegation that the second respondent improperly took into account that "with further work" the applicant could have gained the ability to gain access to production taxpayer data, sensitive ATO staff record data and access to computer systems which would put at risk the ability of ATO core business systems to continue to function. Particular D is an allegation that the second respondent improperly took into account the assertion that the applicant was seeking to access production taxpayer data or sensitive ATO staff record data without verifying the assertion. I have already referred to the second respondent's reasons (at [56] above). There was ample evidence in support of the second respondent's conclusions and they were proper matters for him to take into account. 131 Particular E is an allegation that the second respondent improperly took into account the assertion that the applicant had comprehensively responded to the allegations put to the applicant by the third respondent and the assertion that the applicant did not wish to discuss the matter with him when the applicant had in fact requested that a meeting be arranged. As I read the second respondent's reasons he did not take this into account as a consideration and it is no more than a statement of what had happened. Insofar as it is an allegation of a breach of the rules of natural justice, I reject it for the reasons previously given. 132 All grounds of challenge to the third decision fail. That memorandum is dated 30 July 1997 and in it there is a discussion of the applicant's employment and a reference to, among other things, legal advice the second respondent had received from the AGS. 134 The respondents claimed legal professional privilege over those parts of the memorandum which referred to legal advice received from the AGS. They had no objection to the applicant having an edited copy of the memorandum, that is to say, a copy which did not contain reference to the legal advice. 135 The respondents had claimed legal professional privilege over the unedited copy of the memorandum in its list of documents. However an unedited copy of the memorandum came into the possession of the applicant. That came about in the following way. On an interlocutory application in the proceedings the respondents filed written submissions dealing with the application. They attached to those submissions, by mistake, an unedited copy of the memorandum. I accept the evidence of the respondents' solicitor that the unedited copy of the memorandum was attached to the submissions inadvertently, and that what should have been attached to the submissions was an edited copy of the memorandum. 136 The applicant did not dispute the initial claim for legal professional privilege. However, his submission was that privilege had been waived when an unedited copy of the memorandum was sent to him. I ruled that legal professional privilege had not been waived. I delivered my ruling at an early stage of the trial and I said at the time of my ruling that whether the memorandum may become admissible on other grounds was a matter for the parties to consider and that I rejected the application to tender at that stage. 137 These are my reasons for that ruling. 138 The starting point is the Evidence Act 1995 (Cth) ("Evidence Act"), the provisions of which, at least insofar as legal professional privilege (or, more accurately, "client legal privilege") is concerned, apply where, as here, evidence is sought to be adduced. The respondents did not address directly the operation of the Evidence Act and I was taken, in argument, to cases where the common law was the applicable law either because of the jurisdiction or because of the pre-trial (discovery and production) context in which the issue of privilege arose ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1; Bennett v Australian Customs Service [2004] FCAFC 237 ; (2004) 140 FCR 101; Secretary to the Department of Justice v Osland [2007] VSCA 96 ; GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123). Whatever assistance I may derive from those cases, it is clear that my starting point must be the provisions of the Evidence Act . Equally, the applicant did not articulate precisely the legal basis for his submission that the privilege had been waived, although I understood his submission to be based upon the disclosure to him of the unedited copy of the memorandum by the respondents' solicitors. 139 Since the applicant did not dispute the claim for privilege and relied only upon waiver, I was able to proceed upon the assumption that client legal privilege under the Evidence Act was established, under either s 118 or s 119. 140 Sections 121 - 126 provide for circumstances where client legal privilege is lost. For obvious reasons, none of s 123 (which applies in a criminal proceeding), s 124 (which applies where one of a number of joint clients seeks to adduce evidence) or s 125 (which applies to documents created in the furtherance of the commission of specified wrongful acts) applies. The only document in issue in this case is the Seymour memorandum, so s 126 (which provides for related communications and documents) is not presently relevant. 141 Section 121 provides three ways in which client legal privilege does not prevent the adducing of evidence. Clearly, neither subsection (1) (which applies where the client or party has died) nor subsection (2) (which applies where the court would be prevented from enforcing an order of an Australian court were the evidence not adduced) apply. In my opinion, that must mean a communication or document that affects in some fairly direct way what are the actual rights and perhaps also duties of a person. 142 Section 122 , which deals with loss of client legal privilege by consent, required close examination on the facts of the present case. It will be necessary subsequently to consider what, if any, application subsection (1) may have to the present case. Before turning to those operative provisions, however, I observe that the exceptions to the operation of those provisions provided in subsections (3) and (5) were not enlivened by the facts of this case. Subsection (3) relieves the effect of subsection (2) where the disclosure is made by an agent, unless the agent was authorised to make the disclosure. The disclosure in the present case was made by the respondents' solicitors, who are agents of the client. There was no suggestion that the disclosure was unauthorised, but in any event I am satisfied that the waiver of a client's privilege over documents lies within the ostensible authority of the client's solicitor and that ostensible authority is sufficient for the purposes of the proviso in subsection (3). That view is supported in the authorities: Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 at 403 per Goldberg J; Sovereign Motor Inns Pty Ltd v Bevillesta [2000] NSWSC 521 (" Sovereign ") at [24] per Austin J. Therefore, subsection (3) does not operate in this case. Subsection (5), which deals with disclosures between persons with common legal representation or a common interest in a proceeding, is plainly inapplicable. 144 It is unclear on the authorities whether subsections (2) and (4) have exclusive spheres of operation, or whether they overlap to some degree. On one view, subsection (2) applies when the disclosure is made by the client (including the client's solicitor: s 117(1)(b)) and subsection (4) applies when the disclosure is made by some other person. This interpretation has its genesis in Telstra Corp Ltd v Australis Media Holdings Pty Ltd (1997) 41 NSWLR 346 at 350-351 per McClelland CJ in Eq and was described by the Full Court of this Court as "cogent and persuasive": Carnell v Mann (1998) 89 FCR 247 at 261 per Higgins, Lehane and Weinberg JJ. Carnell v Mann was overruled by the High Court (on a different point) ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1) so the Full Court's decision is not binding on me, although it is a persuasive authority (see also J D Heydon Cross on Evidence (7 th Australian ed, 2004) [25300] 838-839). An alternative view is that the subsections operate together, the relevant distinction between the two being knowing and voluntary disclosure (subsection (2)) as opposed to express or implied consent to the disclosure (subsection (4)): see S Odgers Uniform Evidence Law (6 th ed, 2004) [1.3.11100] 474-475. In Sovereign Motor Inns Pty Ltd v Bevillesta [2000] NSWSC 521 , Austin J expressly doubted the interpretation according each subsection an exclusive sphere of operation, but left open the question because his Honour had not had the benefit of argument on the point. I am in a similar position in the present case. Given the doubt attending the question, it would not be appropriate to attempt to resolve the conflicting views without the benefit of full argument where the resolution is unnecessary to the decision. In my opinion, the applicant was unable to establish waiver under either subsection and I was content to proceed on the assumption, without deciding the point, that the applicant may rely prima facie on either subsection. 145 For the purposes of subsection (2), the applicant must establish that the client "knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made [in one of the four specified circumstances]". None of the specified circumstances obtain. Moreover, it is clear that there was disclosure "to another person" (the applicant himself) of the entirety of the evidence, such that no question as to what amounts to "the substance of the evidence" arises. The point turned upon whether the disclosure was made "knowingly and voluntarily". The relationship between mistaken or inadvertent disclosure and voluntary disclosure cannot be expressed definitively. It has been held that disclosure by mistake is not, for that reason alone, involuntary, at least where the disclosure is made in the course of formal discovery: Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 145 ALR 391 at 406 per Goldberg J. The relevant disclosure in the present case occurred when written submissions were served upon the applicant by the respondents. In fact, in the formal discovery process, that is, when the respondents' list of documents was filed, privilege was claimed over those parts of the memorandum dealing with the legal advice from the AGS. Even if some mistaken disclosures can nonetheless be made knowingly and voluntarily within the meaning of subsection (2), I was not satisfied that there was such a disclosure in this case. This is a case "where everything indicates an intention to claim privilege in respect of the document and what has gone wrong is attributable to sheer inadvertence or carelessness": Sovereign at [23] per Austin J; see also BT Australasia Pty Ltd v New South Wales (No 8) (1998) 154 ALR 202 at 208-209 per Sackville J. In Sovereign , Austin J placed weight upon the fact that the solicitor in receipt of the privileged letter mistakenly disclosed must have realised that it was privileged. That is equally true in the present case in light of the respondents' solicitors' letter to the applicant of 7 February 2007 which asserted the privilege. Moreover, the written submissions (to which the unedited copy of the memorandum was attached) referred to the memorandum as "document 49 in the List of Documents", in respect of which privilege was claimed, and claimed to the knowledge of the applicant. This fact militates against the view that the respondents intended to change their position in respect of the privilege and that it was voluntarily waived when the written submissions were served. 146 For the purposes of subsection (4), the applicant must establish that the substance of the evidence has been disclosed with the express or implied consent of the client to another person (with two exceptions, neither presently relevant). Again, no issue regarding "the substance of the evidence" arises and the point turned upon whether there was express or implied consent. Where, as is the case here, the disclosure was made by the client (within the statutory definition, which encompasses agents and hence solicitors: s 117) and not by a third party, it follows from my finding that the disclosure was not voluntary, that the disclosure was not made with express or implied consent. The factors relevant to a determination of whether the solicitors (who, it is to be recalled, had ostensible authority to waive the privilege) consented to the disclosure include the conduct and intentions of the solicitors: Sovereign at [27] per Austin J. As I have said, I accept, based on the evidence before me, that the disclosure was entirely inadvertent and, in such circumstances, it cannot be said that the disclosure was consensual, expressly or impliedly. 147 Waiver of privilege at common law, which is brought about by "the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality" ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ) is described as an "imputed waiver" because it does not depend upon the subjective intentions of the client. Subsection (4) is not satisfied by imputed consent of this species: Sovereign at [28] per Austin J. It is not necessary for the purpose of subsection (4) to consider the common law test and I conclude that subsection (4) is not made out. The common law test is, however, relevant to a consideration of subsection (1) to which I now turn. 148 Subsection (1) provides for the loss of client legal privilege where the evidence adduced is "given with the consent of the client or party concerned". The Full Court of this Court has held that consent in this context is not limited to express consent but reaches cases where the client is deemed to have consented to the disclosure of otherwise privileged material: Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 168 per Branson and Lehane JJ. But this decision was limited to cases where the waiver is based upon conduct other than disclosure. In my view, subsection (1) applies where consent is given to the adducing of evidence in court (rather than disclosure out of court) or where a client engages in conduct inconsistent with the maintenance of the privilege, such as where the substance of legal advice received is relied upon in order to raise an issue in the proceeding. Insofar as the applicant's submission on the waiver of privilege relies upon the inadvertent disclosure of the memorandum in the respondents' written submissions, subsection (1) is of no assistance. 149 Subsection (1), in the applicable sense described above, may have been raised by the applicant in another way and I considered whether privilege may have been waived by some reason other than the disclosure. In particular, in the letter from the AGS dated 28 July 1998 to the applicant the second respondent's reasons are set out and it is said that the second respondent "also took into account the advice". I considered whether the maintenance of legal professional privilege was inconsistent with that assertion and, as such, whether consent to the adducing of the evidence could be imputed and the privilege lost by operation of subsection (1). I was not prepared to conclude that the assertion and maintenance of the privilege were inconsistent because there was nothing before me to indicate that the legal advice said to have been taken into account by the second respondent was the legal advice received from the AGS. 150 It remains only briefly to observe that the common law relating to legal professional privilege, and its reliance to some extent upon notions of fairness, may be relevant to my discretion to exclude evidence under s 135 of the Evidence Act . But this would arise only if I had concluded that privilege was lost under s 122 and the respondent made an application to exclude the evidence for reasons of fairness, notwithstanding its unprivileged status. 151 Legal professional privilege or client legal privilege over the unedited version of the Seymour memorandum has not been lost. I might add that by the end of the trial I had a good deal of evidence of the legal advice provided by the AGS in July 1997. That evidence came from other sources and is referred to in my discussion of Mr Molineux's evidence ([80], [81] above). I will hear the parties as to costs. I certify that the preceding one hundred and fifty-two (152) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | application for judicial review under administrative decisions (judicial review) act 1977 (cth) ("adjr act") where applicant former employee of commonwealth public service where first respondent delegate of secretary under s 63b public service act 1922 (cth) ("psa act") where first respondent suspended applicant from duty pursuant to s 63b psa act where third respondent authorised officer under s 61(2) psa act where first respondent suspended applicant after being informed by third respondent that third respondent of opinion that applicant may have failed to fulfil duty as officer where second respondent authorised officer under s 61(2) psa act where second respondent charged applicant with failing to fulfil duty as officer pursuant to s 61(2) psa act whether third respondent made a decision to which adjr act applies whether first respondent made a decision to which adjr act applies whether second respondent made a decision to which adjr act applies administrative law |
These reasons for judgement should be read in conjunction with those earlier reasons. On 24 November 2009, the Deputy Commissioner renewed his application for the winding up of the company. That application was opposed, nominally, by the company. The effect of the appointment of administrators on 29 October 2009 was to place the company under their control and, while it is under administration and save with the administrators' written approval, to suspend the powers of its officers to exercise their powers or functions. The company has but one officer, its director Mr Mark Tonge. To the extent that the company is itself inhibited from opposing the Deputy Commissioner's application, I am prepared to treat the application as one opposed by Mr Mark Tonge. It is he who has proposed the deed of company arrangement in question. As will be seen, he is to be the beneficiary of particular releases for which that proposed deed provides. The submission made in opposition to the Deputy Commissioner's application was that I should be satisfied, on the material by then to hand, that it was in the interests of the company's creditors for the company to continue under administration rather than be wound up. If so satisfied I am obliged by s 440A(2) of the Corporations Act 2001 (Cth) (Corporations Act) to adjourn further the hearing of the application for an order for the winding up of the company. There was no separate appearance by or on behalf of the administrators appointed on 29 October 2009. Nor even was there an affidavit by one or the other of those administrators giving me the benefit of the results to date of their investigations and their considered opinion as to the advantages and disadvantages of the company's continuing under administration. That is to be lamented. That is so even though, as was explained in the course of the submissions made in opposition to the Deputy Commissioner's application, funds available for the administration have been limited. It emerged from the material read that the second meeting of creditors is to be held on 2 December 2009. A concomitant of the issue as to whether I am presently satisfied in terms of s 440A(2) of the Corporations Act is therefore whether the fate of the company should just be consigned to the decision of its creditors at that meeting. Since 30 October 2009, a deed of company arrangement has been formulated and the administrators have conducted preliminary investigations. I bear in mind that it is a necessary feature not just of this but usually every administration under Pt 5.3A of the Corporations Act that administrators have but limited time for the conduct of investigations. While a final report of the administrators is not in evidence, the draft of a report of the administrators was exhibited to an affidavit of the company's sole director, Mr Mark Tonge. So, too, was the present form of the proposed deed of company arrangement. It will be necessary to detail at some length what is revealed in each of these documents shortly. The position which obtained on 30 October 2009 was that, though the information then to hand concerning the benefits which might flow to creditors under a Deed of Company Arrangement was then general, enough was revealed to admit of satisfaction that it was at least in the interests of creditors for the company to continue under administration for a short time so as to enable the terms of the deed to be precisely formulated, the position in relation to the company's affairs to be investigated at least in a preliminary way by the administrators and for a binding commitment to be made on behalf of a related creditor whom it was said would subordinate his interests to those of other unsecured creditors for the purposes of any distribution under the proposed deed of company arrangement. In effect and as matters then stood, I was persuaded that observations made by Philip McMurdo J in Public Trustee of Queensland v Octaviar Ltd (subject to a Deed of Company Arrangement) (Receivers and Managers) (2009) 69 ACSR 621 told in favour of such satisfaction. It was not at that early stage a patent absence of a basis for satisfaction that it was in the interests of creditors for the company to continue under administration; cf Deputy Commissioner of Taxation v WPS Motorsport Pty Ltd (2009) 71 ACSR 640. It by no means follows that a decision made on the limited materials then to hand is in any way conclusive as to what now should be the fate of the administration. That falls for assessment afresh on the material now to hand. As at 30 October 2009, though it was conceded by the Deputy Commissioner that the effect of the allowance of an objection by the company against an assessment which underpinned the Commonwealth revenue law debt the subject of the statutory demand would have the consequence of reducing that debt once a consequential amended assessment issued, no such amended assessment had been made. Such an amended assessment was made on 20 November 2009. That amended assessment was to issue on 24 November 2009. The effect of that amendment is to reduce the company's debt to the Commonwealth, not to eliminate it. Excluding an amount of $1,137.31 referable to filing fees and disbursements in relation to the winding up application, the amount owed by the company to the Commonwealth and payable to the Deputy Commissioner as at 24 November 2009 is $1,617,815.72. Unless satisfied, the amount of that debt will increase from day to day as the statutory general interest charge accrues. The company incurred the taxation liabilities which underpinned the statutory demand made by of it by the Deputy Commissioner at a time when it was trustee of a trust, the Barr Trust. So much was evident as matters stood on 30 October 2009. What is now revealed is that the company was, until 19 July 2009, the trustee of the Barr Trust. It assumed that obligation as the original trustee of that trust pursuant to a deed dated 26 September 1996. By a deed dated 19 July 2009, the company was removed as the trustee of the Barr Trust and replaced as trustee by FUFM Pty Ltd (FUFM). It is apparent that Mr Mark Tonge is also the director of FUFM. It seems unlikely to be a coincidence that the removal of the company as trustee occurred in the interval between when it filed its ultimately unsuccessful application on 11 May 2009 to have the statutory demand made by the Deputy Commissioner set aside and 20 July 2009, when its application to set aside that statutory demand was dismissed. The deed of removal and appointment does not make any express provision for the indemnification by FUFM from the trust fund of the Barr Trust of liabilities incurred by the company in the ordinary course of its prior administration of that. If it were thought at that time that the company's removal from the office of trustee and that absence of provision might in some way have insulated the trust fund from the claims of the company's creditors or its liquidator if it were wound up, that view was mistaken. That absence of express provision does not affect the position which prevails in equity. The company is entitled to be reimbursed from the trust fund of the Barr Trust in respect of expenses incurred by it in the administration of that trust up to and including the time of its removal as trustee. As was explained in Chief Commissioner of Stamp Duties (New South Wales) v Buckle [1998] HCA 4 ; (1998) 192 CLR 226 at 247, [50] (Buckle's case).by reference to a statement earlier made in Vacuum Oil Co Pty Ltd v Wiltshire [1945] HCA 37 ; (1945) 72 CLR 319 at 335, "the trustee's right to exoneration or recoupment 'takes priority over the rights in or in reference to the assets of beneficiaries or others who stand in that situation'. " I did not understand the submission made in opposition to the Deputy Commissioner's application to gainsay that position. These transactions will be examined in more detail should creditors resolve to place the company into liquidation at the forthcoming meeting of creditors. Given the company did not operate a bank account for some time and made no payments to creditors, no potentially preferential payments were identified. However, the Director of FUFM Pty Ltd, namely Mr Mark Tonge has agreed that any surplus will be contributed to the creditors of Bedroff Pty Ltd in accordance with his DOCA proposal. While the information in regard to amounts is commercially sensitive, the director believes a significant amount is recoverable by the Company in regard to the termination of the contract. I am yet to form a view on the recoverability of same. It is unknown what value this contingent asset would have in a Liquidation scenario. Given 10 of the 13 Lots have now been sold, I believe the Company is entitled to these funds. The bond is secured by way of bank guarantee with Westpac Banking Corporation. However, given the employee is no longer with the Company and the appointment of Administrators, it is the view of the Director that the mortgage should be repaid. I am advised that the dollars can be used to purchase property, building material and other related products. After discussing this asset with the Director I have estimated a cash recovery of $30,000 after costs. This amount may be more or less depending on the assets available for purchase. No damages for insolvent trading will become available under the proposed DOCA. Voidable transactions not available under the proposed DOCA. Please note that the recovery of the preference payments will be subject to costs. Please note that if the costs of the Deed Administrator are less than this amount, only the lesser amount will be drawn in respect to the Deed Administrators' fees. The figure is a reflection of the likely necessary investigations and examinations which may need to be undertaken. I have not adjudicated on this claim at this point in the Administration but intend to do so prior to the second creditors meeting on 2 December 2009. As above, I have not adjudicated on this claim at this point. Please note that should the Company be placed into Liquidation, the related parties would be entitled to prove for their debts assuming their validity. I note that this would include the balance of the employee entitlements as an unsecured debt in accordance with the provisions of the Corporations Act 2001 . FUFM Pty Ltd as trustee of the Barr Trust hereby agrees to pay all surplus funds from the sale of the Coomera Properties, after payment of all secured creditors, to the Administrators for the benefit of the creditors of the Company. The offer by the present trustee, FUFM, to realise these assets and make the net proceeds available pursuant to the deed of company arrangement in substance offers nothing different to that which a liquidator of the company could claim from the trust fund on behalf of that company in the exercise of the right of reimbursement to which I have referred. Though it is evident from the draft report that the administrators are aware that the company acted as trustee of the Barr Trust, it is a significant omission from that draft report that this feature of the law of equity is not highlighted to the company's creditors in the examination of the relative merits of the deed and liquidation. The related party claim which is to be subordinated is at least substantially that of Mr James Malcolm Tonge. In an affidavit read on 24 November 2009, Mr James Tonge describes himself as "unsecured creditor of [Bedroff] with debts owing to me from [Bedroff] in the sum of $2,344,314". That claim is evidenced by a letter from Mr D G Hayes, chartered accountant of WMS Chartered Accountants dated 20 November 2009 exhibited to his affidavit. I note that this liability arose on 1 July 2006 and remains unpaid as of today. Though it is evident from his affidavit that he had read this draft report, Mr James Tonge did not seek to explain the difference in the figures in his affidavit. Nor was it otherwise explained. It would seem that Mr Hayes is either unaware of the change in July in the occupancy of the office of trustee or unaware of its impact. It is unnecessary to decide which. Mr James Tonge's claim for "unpaid beneficiary entitlements" is a claim to be paid from the trust fund of the Barr Trust. It is the responsibility of the trustee for the time being of the Barr Trust to meet that claim insofar as the trust fund is in surplus and subject to any priority claim on that fund. The trustee of the Barr Trust is no longer the company but rather FUFM. Further, even assuming that there remains any surplus after the claims of secured creditors are met, unless and until the company's entitlement to reimbursement, referred to above, is satisfied, it is impossible even to state what the trust fund of the Barr Trust comprises: see also in addition to Buckle's case, CPT Custodian Pty Ltd v Commissioner of State Revenue (Victoria) [2005] HCA 53 ; (2005) 224 CLR 98 at 121, [51] . Again, the absence of any discrimination in the administrators' draft report as between the claims of those such as the Deputy Commissioner who were and remain creditors of the company and those such as Mr James Tonge who, as beneficiaries, have a claim against the trust fund (such as it may be) of the Barr Trust is a significant omission. That employee entitlements are being foregone in the proposed deed of company arrangement is an offer the value of which is moot. As explicitly identified, they amount to no more than $7,000. Further, even this amount and the further statement in para 12.12 of the draft report that the administrators had "received a claim from Mr Mark Tonge in the amount of $300,000 for unpaid wages" is at odds with the statement in para 12.11 of the draft report where the administrators note that, "the company did not have any employees and therefore no employee entitlements are outstanding". Further, under the terms of s 556(1A) of the Corporations Act , the amount of outstanding entitlements to Mr Mark Tonge in respect of the period when he was a director of the company which would enjoy any priority in the event of a winding up is subject to a cap of $2,000. It was for those who would wish to engender the satisfaction that it was in the interests of creditors for the administration to continue so as thereby to occasion an adjournment to resolve or explain such seeming inconsistencies. It has been known since 30 October 2009 that it would be necessary to engender such satisfaction on 24 November 2009. Also of concern in this regard is that it is evident from the draft administrators' report that the company's financial accounts were last prepared to 30 June 2006. Apparently, the administrators were informed that the accounts as at 30 June 2009 "will be prepared". The fact that the case was to come back to court on 24 November 2009 does not seem to have lent any urgency to this task. According to the information in the draft report, the company made a trading profit in the 2006 financial year of $1,036,414. Further, at that time it had net assets of $3,079,098. Seemingly, that profit and those net assets were incurred or held by it in its then capacity as trustee of the Barr Trust. The present extent of information as to the dramatic change since then in the company's fortunes is that the administrators have been advised that "a number of the assets and liabilities have been paid out since [the 2006 accounts] were prepared' and that "the values will have altered due to property prices". Beyond this, the present circumstance of the company is said in the draft report to be the result of the following contributing factors: For the purposes of the Deputy Commissioner's application that the company be wound up in insolvency, the company is, by virtue of its non-compliance with the statutory demand, presumed to be insolvent: s 459C of the Corporations Act . The position revealed in the draft administrators report is that the company is truly insolvent and is so by what on even an optimistic view is a large margin. FUFM is not presently a party to the proposed deed of company arrangement. However, even it were, its offer to provide the net proceeds of the realisation of the assets mentioned is nothing more than an offer to provide that which in equity it is obliged in any event to provide by way of reimbursement to the company. Another benefit said to be a feature of the proposed deed of company arrangement is the full cooperation of Mr Mark Tonge with the deed's administrators in the realisation of the assets identified. Mr Mark Tonge is though, in the event of a liquidation, obliged as a director to do whatever the liquidator reasonably requires of him to help in the winding up: see s 530A(3) of the Corporations Act . Failure to provide such assistance to a liquidator is an offence: s 530A(6) of the Corporations Act . It would not be appropriate for the purpose of deciding whether it is in the interests of creditors for the administration to continue to assume in favour of that course that Mr Mark Tonge would, in the event of a liquidation, commit an offence against the Corporations Act by providing to the liquidator something worse than that which he proposes to provide to the deed's administrators by way of assistance. On analysis, what remains is the offer by Mr James Tonge to contribute under the deed "100,000 Contrabart Dollars", should the deed be accepted. These have an estimated cash recovery value of $30,000 after allowing for realisation costs. This sum, however, would mostly be absorbed in administrators' fees in the event that the Deed of Company Arrangement were to be accepted. The same comment may be made in respect of the sum of $4,400 which is all Mr Mark Tonge seems to be disposed personally to contribute under the terms of that deed. The Deputy Commissioner's submissions highlighted the company's right of reimbursement in equity set out above. He pointed to a series of cases which exemplify particular applications of that right as described in Buckle's case , supra. It is unnecessary to detail these case examples. In terms of the enforcement of this right of reimbursement, he contrasted the absence of FUFM as a party to the proposed deed of company arrangement with the position in the event of a liquidation whereby the liquidator could enforce such a right on behalf of the company. Also highlighted on behalf of the Deputy Commissioner was the subjection of any claim which Mr James Tonge might have on the trust fund of the Barr Trust to the priority which the company would enjoy by way of reimbursement in respect of expenses incurred by it in the course of the administration of that trust. He submitted, and I agree, that when the effect of this priority was recognised, the offer made by Mr James Tonge was of no real value to creditors. Indeed, I would go further and question whether it is correct to regard Mr James Tonge as a creditor of the company at all, given the description of the nature of the debt in the accountant's letter he exhibits to his affidavit. The Deputy Commissioner also noted the absence of any affirmative evidence as to the nature and extent of the trust fund of the Barr Trust. It may, of course, be that the assets which were held in terms of that trust comprise only those forming part of what are described in the draft administrators' report as "available funds". Perhaps the company's accounts as at 30 June 2009 might more aptly be described as the accounts of the Barr Trust for that year if it were the case that the company did not trade in its own right. Again though, the persuasive onus lies not on the Deputy Commissioner. Mr Mark Tonge is the director of both FUFM and the company. His affidavit offers no enlightenment as to the full extent of the assets said to form part of the trust fund. The Deputy Commissioner also pointed to the absence of any particular evidence as to the nature and extent of voidable payments which a liquidator might recover for the benefit of creditors. He also drew attention to the releases found in cl 11.5 of the proposed deed of company arrangement and submitted that, having regard to City of Swan v Lehman Brothers Australia Limited (subject to a Deed of Company Arrangement) (2009) 260 ALR 199 (City of Swan v Lehman Brothers Australia Limited), such a term "may be contrary to the rights of creditors and render the term void". As against this, attention was directed to the recommendation, albeit voiced only in a draft report, of the administrators that it is in the interests of the company's creditors to accept the proposal for a deed of company arrangement. Yet the presence, in the draft report, of what I have described as significant omissions in terms of an analysis of the ramifications of the company's having acted as the trustee of the Barr Trust detracts from giving weight to that recommendation. Indeed, without such an analysis, the draft report is apt to mislead as to the benefits of the proposed deed. The want of any appearance by or on behalf of the administrators meant that I did not have the benefit of submissions from them as to such ramifications or those omissions. In fairness to the administrators, it must be said that the report is but a draft. I do not in truth have any evidence as to the recommendation that the administrators are finally disposed to make or their reasons for such a recommendation. There is no presumption, arising from the presence of Pt 5.3A in the Corporations Act , in favour of allowing the administration to continue so as to allow a vote to be taken at the meeting proposed to be held on 2 December 2009. Rather, what is offered by that Part of the Corporations Act is an alternative to liquidation but an alternative which is regulated by the provisions of that Part. Of course the object of Pt 5.3A of the Corporations Act as expressed in s 435A must be borne in mind, but the question for immediate resolution remains that posed by another of the Part's provisions, s 440A(2). In Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) (2009) 71 ACSR 81 at [20]-[27], I canvassed authorities touching upon the question of the judicial satisfaction to which s 440A(2) of the Corporations Act refers. I shall not repeat afresh what is there stated. The subsection requires that there be some persuasive case that it is in the interests of creditors for a company to continue under administration. On analysis, for reasons given above, the material now to hand reveals no such case. Rather, it reveals a situation where creditors may come to vote at the meeting on the false premise that there is a substantial benefit being conferred in relation to the deed by Mr James Tonge's offer of subordination and more generally on the basis of an absence of consideration of the ramifications of the company's having acted as the trustee of the Barr Trust. I note that the administrators observe in the draft report that: "it is inappropriate for the administration to end and the control of the company returned to its director. The company has ceased trading and has significantly more liabilities than assets". So far as the objects of Pt 5.3A of the Corporations Act are relevant, that observation eliminates as a factor telling in favour of its being in the interests of creditors for the administration to continue that this course will "maximise the chances of the company, or as much as possible of its business, continuing in existence" (s 435A(a)). These matters are in themselves enough to dissuade me from satisfaction that it is in the interests of creditors for the company to continue under administration. There is another consideration that underscores that view. Having regard to cl 11.5 of the draft deed, it is in Mr Mark Tonge's interests for the deed to be approved at a meeting of creditors. If lawful, that clause will confer upon him the benefit of wide releases if the deed were approved. In City of Swan v Lehman Brothers Australia , supra, it was the opinion of each of the judges comprising the Full Court that Pt 5.3A of the Corporations Act could not be employed by creditors so as to prevent the exercise by some of their number of such legal rights as they had against persons other than the company the subject of the deed of company arrangement: (see at [4], [92] and [151]). Clause 11.5 seeks to achieve this so far as Mr Mark Tonge is concerned. That clause seems to me to be an essential feature of the proposed deed. Though City of Swan v Lehman Brothers Australia Limited is presently the subject of as yet unheard applications for special leave to appeal to the High Court, I am for the moment bound to follow the views expressed in the Full Court. For this additional reason, I am not satisfied that it is in the interests of creditors for the company to continue under administration. It does not axiomatically follow that the winding up application must proceed. However, there was nothing put forward that might enliven a residual discretion to adjourn the hearing of the winding up application. To the contrary, it is in the public interest that an insolvent corporation be wound up. I note that Mr Gregory Michael Maloney, an official liquidator, has consented to be the liquidator of the company in the event that a winding up order is made. There was no submission made to me that I should instead appoint the present administrators. There are doubtless some advantages to be gained from the work which they have already undertaken but I do not assume that they will deprive Mr Maloney of that benefit. There may equally be some advantages in a fresh mind being brought to bear on the subject of recoveries for the benefit of creditors. I see no reason not to appoint Mr Maloney as requested by the Deputy Commissioner. It is no reflection on the submissions, which were helpful, made on behalf of the Deputy Commissioner by an officer (Ms Cameron) who had been authorised under the Taxation Administration Act 1953 (Cth) to appear to state that this right of appearance carries with it no entitlement to professional costs. That is in contrast to the position as to professional costs which would prevail in the event that the Deputy Commissioner chose to be represented by a lawyer in the employ of the Australian Government Solicitor or some other person enjoying a right of practice in this Court pursuant to the Judiciary Act 1903 (Cth). That the Commonwealth is thereby deprived of the benefit, such as it may be, of an order in respect of professional costs is a matter for the value judgement of the Commissioner in his general administration of taxation legislation and perhaps also a policy issue for the Attorney as First Law Officer. The Deputy Commissioner is entitled to an order in respect of filing fees and outlays. For these reasons, I make the following orders: Bedroff Pty Ltd ACN 079 158 955 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). Gregory Michael Maloney, an official liquidator, be appointed liquidator of the company. The Plaintiff's costs, be fixed in the sum of $1,137.31 and reimbursed in accordance in with s 466(2) of the Corporations Act 2001 (Cth). I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | liquidations administration statutory demand application to wind up corporation in insolvency failure to comply with statutory demand company not in administration at time of application administrator appointed on day prior to hearing of winding up application whether court was satisfied that it was in interests of creditors to continue in administration rather than to wind up corporation whether court was satisfied that proposed deed of company arrangement was in interests of creditors held deed of company arrangement not in best interests of creditors held continuance of administration of corporation not in the best interests of creditors held corporation wound up corporations |
It has carried on a variety of businesses including leasing of real estate properties, investment management and providing management services to its subsidiaries. The managing director of Cameron Brae has, at all material times, been David Cameron Hazlett ("David Hazlett"). Other directors of Cameron Brae are Kenneth Allen ("Allen") a chartered accountant who was formerly a principal of Hancock & Associates which has, since before the events which have given rise to this application, acted as external accountants and tax agents for Cameron Brae and its subsidiaries. On 30 June 2000, Allen resigned as a partner of Hancock & Associates and, on the next day, became an employee of Cameron Brae. Later, on 19 September 2000, he became a director of Cameron Brae. The other director of Cameron Brae is Peter George Currie ("Peter Currie") who became a director in or about 1993. 2 In 1998, David Hazlett's son, Andrew, was working part-time as a mechanic for Berowra Waters Mariner Pty Ltd, a wholly-owned subsidiary of Cameron Brae. In the year ended 30 June 1998, Andrew Hazlett received a salary of $24,300 from that employment. Since 1998, Andrew Hazlett has been either a full-time or part-time employee of Cameron Brae or one or other of its subsidiaries. 3 On 11 May 1998, the directors of Cameron Brae resolved to contribute $500,000 to a trust fund, the IS & PL Fund, of which International Superannuation & Pensions Limited ("IS & PL"), a company incorporated in New Zealand, was the trustee. The IS & PL Fund was established on 11 June 1993 and was administered in accordance with a trust deed executed on the same date. The IS & PL Fund trust deed has been varied from time to time. It is the desire of the Principal Employer to establish and maintain a superannuation fund for the purpose of providing retiring allowances and other benefits for such of the present and future employees of the Principal Employer (and of any Participating Employer) as shall be eligible to and shall elect to become members of the Fund and obtain the benefits of membership for themselves or in certain circumstances, for their Dependants. The Trustee has agreed to act as Trustee of the Fund in accordance with the provisions of this Deed. Such nomination shall be made to the Trustee. No Member nor Beneficiary nor any Relative of a Member or Beneficiary nor any person claiming through any of them shall have any claim right or interest in respect of Benefits from the Fund or any entitlement to any Benefit from the Fund except under and in accordance with this Deed. Benefits payable to or for the benefit of or in respect of a Member or Beneficiary are personal to that Member or Beneficiary (as the case may be). Upon the Trustee determining in accordance with the provisions of this Deed to make a distribution out of the assets of the fund by paying a Benefit to, for the benefit of or in respect of a Discretionary Class Member, the right and entitlement to and benefit of such Benefit, subject always to the terms and conditions of payment and the provisions of this Deed (all hereinafter referred to as "Conditions"), shall immediately arise and accrue to the Discretionary Class Member concerned who shall, if no Conditions attach to the payment, have a present, vested, indefeasible and absolute entitlement to receive and obtain payment and the full benefit of such Benefit and such right, entitlement and benefit and any obligation, or liability of the Trustee in respect thereof shall forever and fully be satisfied, extinguished and discharged upon payment of the said Benefit. Any right, entitlement or benefit arising pursuant to Clause 24 B shall not confer or give rise to any interest in the Fund or in all or any part of or any assets comprising or forming part of the Fund. Any such Employee shall continue to be a Discretionary Class Member following termination of the employment with the Employer, until their Membership of the Fund ceases pursuant to Clause 8(f). There shall be a separate class of Discretionary Class Members (the "Discretionary Class") for each Employer and all Discretionary Class Members who are Employees or former Employees of the same Employer shall belong to the same Discretionary Class. On the death of a Member of any Class (other than a Discretionary Class Member in their capacity as such) whilst still a Member the Trustee shall, subject to Clause 24, pay the full amount standing to the credit of the Member's Accumulation Account as at the date upon which payment is made in accordance with the provisions of Clause 31. He instructed Cameron Brae's advisers, principally Hancock & Associates, to make further enquiries about the IS & PL Fund after which the directors of Cameron Brae carried a series of resolutions related to the contribution of $500,000 to the IS & PL Fund. That the Company apply to become a Participating Employer of the Fund and complete such documents as may be necessary in this regard and DAVID HAZLETT shall be authorised to sign any such documents for and on behalf of the Company. That the Company nominate selected employees as Discretionary Class Members of the Fund and make contributions so as to promote and foster the objectives set out in the First Resolution. With effect from 7 May 1998, Cameron Brae was admitted as a participating employer of the IS & PL Fund and David Hazlett and Andrew Hazlett were admitted as Discretionary Class members of the same Fund. The Directors UNANIMOUSLY RESOLVED to pay the sum of $500,000 to the Fund as a contribution by the Company pursuant to the terms and provisions of the trust deed of the Fund. Nor is there any evidence of any specific instructions from Cameron Brae to that firm. I infer that the actuarial calculations were supplied together with the text of the resolution as part of a standard form "package" by the promoters of the IS & PL Fund. 8 On 12 May 1998, Cameron Brae made a cash contribution of $500,000 to the IS & PL Fund. After deducting the Trustee's fee of $25,000, the balance of $475,000 was paid to the credit of an account with Goldman Sachs & Co Bank ("Goldman Sachs") in the name Cameron Brae Pty Ltd (IS & PL sub account 77). 9 Thereafter, the amount standing to the credit of that account was invested in money market securities and equities in listed public companies under the management, successively, of independent funds managers, namely Goldman Sachs, Deutsche Bank, BNP Paribas and Clariden Bank. To 1 October 2004, the balance standing to the credit of Cameron Brae Pty Ltd (IS & PL sub account 77) represented by accumulated earnings and the market value of securities as at that date was $630,000. No part of that balance has been paid or advanced by way of loan to Cameron Brae, David Hazlett or Andrew Hazlett. 10 In its tax return for the year ended 30 June 1998, Cameron Brae claimed a deduction for "employee superannuation" of $525,338 which included the contribution of $500,000 to the IS & PL Fund. By an amended assessment issued on 7 February 2003, the Commissioner disallowed the deduction to the full extent of that contribution and imposed additional tax of $36,000 by way of penalty for the understatement. Cameron Brae's objection to the amended assessment was in turn disallowed on or about 9 April 2003. Cameron Brae's appeal to this Court against that objection decision was instituted on 29 May 2003 in proceedings numbered VID 419 of 2003. 11 On 10 February 2003, the Commissioner assessed the amount of the contribution of $500,000 to the IS & PL Fund as a taxable fringe benefit included in, or increasing, Cameron Brae's aggregate fringe benefits amount for the tax year and, accordingly issued a notice of amended assessment for the fringe benefits tax year ended 31 March 1999 and imposed additional tax of $393,775.75 for an incorrect return. Cameron Brae objected to that assessment and that objection was disallowed on or about 26 May 2003. An appeal against that objection decision was instituted on 17 June 2003 in proceedings numbered VID 469 of 2003. The subdivision distinguished between contributions made to complying and non-complying superannuation funds. In the present case, it is common ground that the IS & PL Fund to which the contribution was made was, if a provident, benefit, superannuation or retirement fund, not a complying fund and was therefore a non-complying fund. 16 To the extent that it is relevant in the present case, an "eligible employee" in relation to a taxpayer is defined in s 82AAA(1) as an "employee" of the taxpayer or an employee of the company in which the taxpayer has a controlling interest. An "employee" for the purposes of s 82AAA(1) means a person who is employed by a taxpayer and is engaged in producing assessable income of the taxpayer or is a resident of Australia and is engaged in the business of the taxpayer. 25 Section 136(1) of the FBTA Act defines "employee" and "employer" as meaning respectively a current, future or a former employee or employer. 27 "Associate" is defined in s 136(1) of the FBTA Act as having the same meaning as in s 26AAB of the Act . It is convenient to examine each part of those submissions as it arises in relation to one or other of the issues identified above. The meaning of the term must therefore depend upon ordinary usage, the attributes of a thing thus denominated being those which things ordinarily so described have...the connotation of the phrase in the Act must be determined by one's general knowledge of the extent of the denotation of the phrase in common parlance...I have come to the conclusion that there is no single attribute of a superannuation fund established for the benefit of employees except that it must be a fund bona fide devoted as its sole purpose to providing for employees who are participants money benefits (or benefits having a monetary value) upon their reaching a prescribed age. Since a fund, if its income was to be exempt under the provision, was separately required to be one established for the benefit of employees, each of the three descriptive words 'provident', 'benefit' and 'superannuation' must be taken to have connoted a purpose narrower than the purpose of conferring benefit, in a completely general sense, upon employees. Precise definition may be difficult, and in any case is unnecessary for present purposes. All that need be recognised is that just as 'provident' and 'superannuation' both referred to the provision of a particular kind of benefit' --- in the one case a provision against contemplated contingencies, and in the other case a provision, to arise on an employee's retirement or death or other cessation of employment, of a subvention for him or his estate or persons towards whom he may have stood in some kind of relation commonly giving rise to a legal or moral responsibility --- so 'benefit' must have meant a benefit, not in a general sense, but characterized by some specific future purpose. A funeral benefit is a familiar example. Rather, the terms of the deed confer upon the Trustee an absolute discretion as to whether to pay any benefit to or for the benefit of a Discretionary Class member, when any benefit will be paid in relation to such a member in respect of whom a benefit payment event has occurred and the amount, proportion or value of any benefit which the Trustee may determine to pay. 42 It was acknowledged on behalf of Cameron Brae that the discretionary nature of the trusts on which funds are held under the IS & PL trust was one of the matters which initially attracted it to contribute to what, it contended, was a superannuation fund within the meaning of the legislation because it was being established for the benefit of two of its employees, David Hazlett and Andrew Hazlett. 43 Counsel for Cameron Brae submitted that discretionary powers conferred on the Trustee by cl 53(b) in respect of Discretionary Class members are consistent with the provisions of superannuation funds generally, the trustees of which commonly determine the extent to which beneficiaries with interests in the fund will become entitled (see Lord Foscote writing extrajudicially in The Fetters on Trustees' Discretions (2002) 16 Trust Law International 214 at 214). It was also submitted for Cameron Brae that the present right of a member of a superannuation fund is no more than an expectancy; Re Coram; Ex parte Official Trustee (1992) 36 FCR 250, at 254. Nevertheless, it was pointed out, in the same submission, that, upon the occurrence of a benefit payment event in the present case, the catalogue of "benefit events" in cl 53(c)(i) reproduced at [ 3 ] above makes it clear that one or other or both of the employees would ultimately receive a benefit. 44 However, even if the IS & PL Fund can properly be regarded as a superannuation fund for the purposes of s 82AAE, that will not be determinative of the question of whether Cameron Brae was entitled to a deduction pursuant to that section. Thus, it is necessary to consider the Commissioner's further or alternative argument that a contribution to the IS & PL Fund in respect of Discretionary Class members fails to qualify for a deduction under s 82AAE because the legislation requires the contribution to have been made for the sole purpose of making provision for superannuation benefits for employees. 45 For the contribution to the IS & PL Fund to be deductible under s 82AAE, the contribution must be "for the purpose of making provision for superannuation benefits for an eligible employee". In Walstern Hill J considered that the phrase "the purpose" in s 82AAE connotes a sole, rather than dominant or principal, purpose. His Honour noted that this view was also taken by Pincus J in Federal Commissioner of Taxation v Roche (1991) 105 ALR 95 at 103. On the other hand, Hill J noted in Walstern that a deduction would not be lost if the directors of a taxpayer/employer incidentally took into account, in making a contribution, the tax benefits which the Act makes available where a contribution is made to a superannuation fund properly so-called. In such a case, it may be that the tax deduction is a consequence, rather than a purpose, of the contribution. 46 An examination of the evidence related to Cameron Brae's purpose in contributing to the IS & PL Fund reveals that an actuating reason was the perception that an existing superannuation fund, the CBP Fund, which had been set up to provide superannuation benefits solely for David Hazlett, was "over funded". Allen explained to me that this meant that the Applicant should not make any further significant employer contributions to the CBP Fund because any extra benefits paid to me upon my retirement from the additional employer contributions would be taxed at the maximum personal tax rate. He explained to me that this was largely due to the relatively low reasonable benefits limit ("RBL") that I was entitled to. Since June 1993 it has therefore been the usual practice of the Applicant only to make contributions to the CBP Fund to the extent considered necessary to satisfy the minimum level of contributions required for superannuation guarantee charge purposes and/or to cover expenses of the CBP Fund which have accrued in the year of the contribution or in prior income years, and not to make tax deductible contributions up to the maximum level allowed under Australian tax laws. At about the time the applicant made the contribution to IS & PL Allen and I had been working on a succession plan for the Group which would see Andrew succeeding me upon my retirement or death if he was up to the task. Under that plan, Andrew started as a junior employee of the Applicant on a part time basis performing mechanical work on boat engines for BWM, the position he held when the Applicant made the superannuation contribution to IS & PL in May 1998. In consultation with Allen, I planned that the Applicant's contributions to IS & PL would assist in achieving the Applicant's objectives under the succession plan as the funds contributed to IS & PL could be used to provide retirement benefits either for Andrew or me. The funds contributed to IS & PL could be used to provide Andrew with an incentive to stay with the Group until his retirement. Allen and I also believed that if things didn't work out with Andrew, then IS & PL was structured in a way that the trustee of IS & PL was not locked into paying Andrew any particular amount or level of benefits. If Andrew left the Group before my retirement, the Applicant could apply to the trustee to pay most or all of the superannuation benefits to me on my retirement in addition to any superannuation benefits that I could receive from the CBP Fund. This flexibility appealed to me. I recall discussing the proposal with Mr Hazlett. I recall that the Applicant relied on Mr Ken Allen for detailed professional advice in relation to the contribution. I also recall David Hazlett informing me at the time that Andrew Hazlett was a potential beneficiary of the superannuation fund. At the time I was aware that the Cameron Brae Pension Fund held benefits of approximately $1 million to which David Hazlett alone would be entitled on retirement, and that Andrew Hazlett had no interest in the Cameron Brae Pension Fund. I was also familiar with the Applicant's cash and working capital position and I believed that it was capable of funding a payment of $500,000 to the IS & PL Fund and that it was reasonable for it to do so for the benefit of David Hazlett and Andrew Hazlett. The amount which each of David Hazlett and Andrew Hazlett should receive and, indeed, whether he should receive anything at all was entirely at the discretion of the Trustee. 50 Those circumstances strongly suggest that Cameron Brae's sole, or even its principal, purpose in making the contribution was not to make provision for either David or Andrew Hazlett or his dependants to enable him or them to cope with the exigencies of death, disablement or retirement from employment by Cameron Brae. Had the making of such a provision been Cameron Brae's sole or main concern, it would have been more appropriate for David Hazlett and Andrew Hazlett to have been nominated as members of the "Original Class" of members of the IS & PL Fund pursuant to cl 45(b) of the trust deed. A nomination in that form would have secured to each member, upon his retirement at or after attaining the age of 55 years or upon reaching the age of 65 years, payment of the amount standing to the credit of his accumulation account. It would also have enabled each of David and Andrew Hazlett to have made "member contributions" to the Fund. That facility is denied to Discretionary Class members by cl 22(a)(ii) reproduced at [ 48 ] above. 51 It is true, as Counsel for Cameron Brae pointed out, that no part of the contribution which it made to the IS & PL Fund has been lent back to Cameron Brae for use as working capital. That feature distinguishes the present case from Walstern where Hill J found, at 18, that the directors of the company had created a superannuation scheme in order to "give effect to their desire to take money out of Walstern to invest for their benefit. " However, a purpose described in those terms is by no means exhaustive of those which may preclude a contribution to a superannuation fund or scheme from being one "for the purpose of making provision for superannuation benefits for an eligible employee" within the meaning of s 82AAE. 52 It may also be doubted whether a contribution to a fund administered with a view ultimately to providing benefits to a few of a wider class of employees in respect of whom the employer's contributions were purportedly made has been made for "the purpose" stipulated in s 82AAE; see Raymor Contractors Pty Ltd v Commissioner of Taxation (Cth) (1991) 21 ATR 1410. 53 I am prepared, for the purposes of the argument, to give effect to the presumption erected by s 23 of the Acts Interpretation Act 1901 (Cth) that the words "for an eligible employee" in s 82AAE import the plural and do not require each contribution to be made for the benefit of a single, identified, or specific employee. Nevertheless, if, in the present case, the contribution be regarded as having been made for the benefit of the two employees, David and Andrew Hazlett, it cannot, for the reasons already explained, be said to have been made solely for the purpose of making provision for superannuation benefits for them as a class. That is principally because one Discretionary Member could be totally deprived by an adverse exercise of the Trustee's discretion of any payment out of the Fund despite having satisfied one or other of the requirements on which superannuation benefits are normally conditioned. 54 I am reinforced in this conclusion by several further circumstances. In the first place, there is no evidence that the directors of Cameron Brae gave any consideration, before making the contribution, to what would be an appropriate benefit to be provided to either David or Andrew Hazlett by way of superannuation, if and when he qualified for it. It has to be borne in mind that, in 1998, David Hazlett was already aged 52 years and had, as Mr Currie has deposed, an existing entitlement on retirement to approximately $1 million from the CBP Fund. I accept that a permissible motive for making contributions to a superannuation fund may be the attraction and retention of suitable employees. It was therefore legitimate for the directors to structure a generous superannuation benefit for Andrew Hazlett in the event that he was "up to the task" of succeeding his father as managing director of Cameron Brae. However, for the reasons explained above, by nominating Andrew solely as a Discretionary Class member, the directors did not assure him of any superannuation benefit even if the succession plan were implemented as hoped. Nor was any attempt made to apportion the contribution to reward successful or improved performance or effort or fidelity by either David or Andrew Hazlett as contemplated by par 1(c) of the directors' resolution reproduced at [ 4 ] above. 55 The sole shareholder of Cameron Brae has at all times been Fincove Pty Ltd as trustee of the D C Hazlett Trust, a discretionary trust of which David Hazlett and his family are beneficiaries. I infer that, in 1998, the sole directing or controlling mind of Cameron Brae was that of David Hazlett. In the five years between 1997 and 2001 he had uniformly drawn a salary of, in round figures, $70,000 a year, a very modest remuneration for the managing director of a company claiming to work 60 hours a week whose taxable income (after claiming the disputed deduction) ranged in the same period between $376,700 and just over $1,577,000. The evidence does not indicate how the after tax income of Cameron Brae was distributed to the beneficiaries of the D C Hazlett Trust. 56 In these circumstances, I find that the purpose of Cameron Brae in making the contribution of $500,000 to the IS & PL Fund was to enable David Hazlett, and, if David Hazlett chose, Andrew Hazlett, to take money out of the company as what would be called superannuation benefits, it being recognised that David Hazlett's benefits under the existing CBP Fund could not be increased in a tax effective way. It follows that the contribution was not made for the sole purpose of providing superannuation benefits for eligible employees within the meaning of s 82AAE. The text of s 8-1(1) of the 1997 Act is set out at [ 20 ] above and provided for a deduction of a loss or outgoing incurred in gaining or producing a taxpayer's assessable income unless it was "a loss or outgoing of capital or of a capital nature". 59 In Essenbourne Pty Ltd v Commissioner of Taxation (2002) ATC 5201; 51 ATR 629 Kiefel J held, in the circumstances of that case, where the taxpayer, which carried on a motor dealership, had contributed funds to an employee incentive trust, there was not the requisite connection with assessable income or the business ends of the taxpayer. Rather, the advantage sought was to benefit the principals of the business in the future. In Walstern, the facts of the case warranted a contrary conclusion. 60 In the present case, the purpose of Cameron Brae in making the payment to the IS & PL Fund, which has been identified as serving its business ends, was to attract Andrew Hazlett to become a full-time employee of the company and remain in its employ until he should succeed his father as managing director. It is therefore necessary to determine whether the contribution made in 1998 could, objectively, be reasonably seen at that time as desirable or appropriate in pursuit of that end. I have not been persuaded that the contribution in the form and amount in which it was made could reasonably be regarded, looking at the matter objectively, as likely to advance the business interests of Cameron Brae. Andrew Hazlett, at the time when the payment was made, was only 26 years of age and working as a part-time mechanic. He had apparently not revealed by then any conspicuous commercial or administrative acumen so that his father saw him as succeeding to the position of managing director only "if he was up to the task". Moreover, as David Hazlett frankly conceded in the passage from his affidavit reproduced at [ 47 ] above, he and Mr Allen conceived that the contribution would be made in such a way that the so-called superannuation benefit would accrue to David Hazlett "if things didn't work out with Andrew". Nor could it seriously be suggested that, in 1998, a provision of a further superannuation benefit was appropriate or desirable to preserve David Hazlett's continuing involvement in Cameron Brae's business. 61 A related consideration tends to the same conclusion, even if, contrary to my clear impression, the attraction and retention of Andrew Hazlett as a full-time employee were objectively capable of advancing Cameron Brae's business interests. That is the fact that, because the benefit under the IS & PL Fund was only available to him contingently on the exercise of an unfettered discretion, the contribution to the Fund, when viewed objectively, was not calculated to achieve the desired end. As already indicated at [ 53 ] above, as a Discretionary Member, Andrew Hazlett could be totally deprived of any payment out of the Fund by an adverse exercise of the Trustee's discretion even if Cameron Brae's avowed purpose of attracting and retaining his services were achieved by his succeeding his father as managing director. 62 Counsel for the Commissioner pointed out that Cameron Brae had surplus profits available for distribution in the 1998 income year and that the only employees whom it invited to join the new fund were its effective controller, David Hazlett, and his son, Andrew Hazlett. The economic benefit of the contribution of $500,000 could have been made available to either or both of them without their becoming Discretionary Members of the IS & PL Fund. 63 Without particularizing them, Cameron Brae contended that the facts of the present case differ significantly from those in Essenbourne. Neither the objective circumstances nor the evidence of the subjective intentions of the directors of Cameron Brae suggest that the contribution was made by way of effecting a distribution of profits. Accordingly, it was submitted that the Court should follow the approach taken by Hill J in Walstern and treat the outgoing as having been incurred in gaining or producing the assessable income of Cameron Brae. 64 In Essenbourne the taxpayer, on 30 June 1997, made a contribution of $252,000 to an employee incentive trust in which three brothers who worked in various managerial capacities in the taxpayer's business were each allotted an equal number of units. It was said on behalf of the taxpayer that its purpose in making the contribution was to provide an incentive for one of the brothers, Sam Marino, to continue his involvement in the business as he had allegedly expressed a desire to pursue some outside activity. Kiefel J held that the evidence was insufficient to make out that contention. Her Honour was influenced in reaching that conclusion by the fact that the three brothers were to share equally under the new employee incentive trust. I tend to the view that Sam Marino's position was not really a reason for the payment of the contribution. I do not accept as likely that he referred to there being an imbalance in the superannuation contributions. So far as concerns whether he was dissatisfied and wanted to leave the dealership, these are matters about which he could have given evidence. In these circumstances I conclude that his evidence in this regard would not have assisted Essenbourne. A conclusion that the payment was simply to provide for the three brothers and at the same time to obtain the advantages outlined is more confidently arrived at. A sharing of profits by the three brothers does not have the necessary connexion to Essenbourne's business. The outgoing is not deductible. It is true that Andrew Hazlett did not have the same length of service or involvement in Cameron Brae's business as Sam Marino had in that of Essenbourne. However, as already indicated, the need for his attraction and retention was not as acute. Nor was it subjectively perceived by David Hazlett as a compelling factor. Moreover, the discretion remained in the present case, which did not exist in Essenbourne , for the accumulated IS & PL Fund to be distributed wholly or disproportionately in favour of David Hazlett. As he candidly volunteered in the passage from par 21 of his affidavit quoted at [ 47 ] above, it was that element of flexibility inherent in the scheme involving the contribution of $500,000 which appealed to him. 66 For these reasons, I have been unable to impute to Cameron Brae objectively, or its directors subjectively, the view that the contribution was desirable or appropriate in the pursuit of the business ends of Cameron Brae's enterprise. It follows that it is unnecessary to consider whether the contribution was of capital or of a capital nature within the meaning of s 8-1(2) of the 1997 Act . As defined in s 136(1) of that Act , which is reproduced at [ 22 ] above, a fringe benefit must, for the purposes of this case, be provided to the employee or to an associate of the employee by the employer. It must also be provided during the year of tax or provided in respect of the year of tax. As well, it must be provided in respect of the employment of the employee. 68 Counsel for the Commissioner have contended that the contribution of $500,000 by Cameron Brae to the IS & PL Fund was a fringe benefit because it involved the provision of a "property benefit" or a "residual benefit" to the employees, David and Andrew Hazlett, or to an associate of theirs, being the IS & PL Fund itself. However, it will be clear from the analysis which I have undertaken earlier in these reasons that, until the Trustee of the IS & PL Fund has exercised the discretion reposed by the trust deed, neither David nor Andrew Hazlett can be said to have been "provided" with a benefit of any kind. 69 That, I consider, was the feature on which Kiefel J and Hill J respectively fixed in Essenbourne and Walstern as the criterion for the imposition on the presumptive employer of liability for fringe benefits tax. On this point the case is not distinguishable. Further, far from being of the view that her Honour was clearly wrong, I am of the view that her Honour was clearly right. The definition of 'fringe benefit' in s 136(1) of the FBTA Act makes clear the importance of identification of the employee. The benefit itself is one which is said to be 'in relation to an employee'. The benefit is required to have been provided to the employee (or associate of the employee) and is required to be in respect of the employment of the employee. The definition of 'property fringe benefit', (if that is the kind of benefit relied upon) requires relevantly provision of property to a particular person there referred to as 'the recipient'. The valuation formula relevantly here requires that there be a benefit provided 'to a person' in respect of the employment of an employee. Any contribution made by an individual employee is taken into account in determining the taxable value of the benefit. Although not relevant in the present case, the exclusion of a benefit otherwise deductible to an employee contemplates taking into account the specific circumstances of the employee himself or herself. Income tax is a tax upon the taxable income of a particular employee. While fringe benefits tax is a tax for which an employer is made liable and is payable at the maximum personal income tax rate, the theory of fringe benefits tax legislation is that it operates as a final withholding tax payable by the employer on amounts that essentially are or would be income of the employee: see Kumagai Gumi Co Ltd v Federal Commissioner of Taxation [1999] FCA 235 ; (1999) 90 FCR 274 and National Australia Bank Ltd v Federal Commissioner of Taxation (1993) 46 FCR 252 at 262 per Ryan J. " By contrast, as I have already pointed out, there has been no allocation by the Trustee of the IS & PL Fund between David and Andrew Hazlett as Discretionary Beneficiaries. Accordingly, neither of them can yet be said to have received, by reason of Cameron Brae's contribution, a benefit in respect of any year of tax. A similar consideration was regarded by Merkel J as decisive at first instance in Spotlight Stores Pty Ltd v Federal Commissioner of Taxation [2004] ATC 4,674 where, at the time when the contribution was made, no employees of the taxpayer had become beneficiaries of the incentive fund. 71 At least equally significant in the present case is the fact, implicit in the findings made earlier in these reasons, that the contribution of $500,000 was not made by Cameron Brae in its capacity as the employer of David and Andrew Hazlett in respect of the employment of either of them. That finding was contrary to the contention of Cameron Brae that the contribution was by way of providing superannuation benefits to those employees. Had that contention been upheld, the contribution would have been into a non-complying fund as defined in s 267(1) of the Act and so would not have been exempt from fringe benefits tax by virtue of s 136(1)(j)(i) of the FBTA Act . In this respect the present case is distinguishable from Caelli Constructions (Vic) Pty Ltd v Commissioner of Taxation [2005] FCA 1467 where Kenny J found that payments made to a building industry redundancy fund were made in respect of the employment of each employee for whom a "Workers Account" had been raised in the books of the fund to which payments were credited. 72 Because the contribution provided no entitlement in the nature of a superannuation benefit to either David or Andrew Hazlett, but only an expectancy of a favourable exercise of discretion by the Trustee of the IS & PL Fund, it cannot be characterized as having been made in respect of the employment of either of them. This feature assimilates the present case to Indooroopilly Children Services (Qld) Pty Ltd v Commissioner of Taxation [2006] FCA 734 and provides a further point of distinction from Caelli (supra). The contribution was made, as I have found, to establish a flexible mechanism for distributing, between David and Andrew Hazlett, surplus income derived by Cameron Brae in the tax year ended 30 July 1998. The fact that it was expected, or hoped, that an entitlement in Cameron Brae to a deduction under s 82AAE of the Act or s 8-1(1) of the 1997 Act would render it tax effective is not to the point. 73 Merely because a benefit is provided by one person to another who happens, coincidentally, to be an employee of the provider, does not entail that the provision is one in respect of the employment. If it were otherwise, a gift, for example, by a father to his son who happened to be employed in the father's business, would be taxable as a fringe benefit whereas an otherwise identical gift to another child not so employed would not be exigible to FBT. It arises because of the words "in respect of the employment". A mere causal link with the employment of the employee will not be sufficient. Essenbourne submits that, at least until the issue of Bonus Units, there is not a sufficient connexion with the brothers' employment. It seems to me that the substantial link at this point is as between the payment and the deduction sought by Essenbourne. It is not necessary for me to further consider the point for, in my view, the payment by Essenbourne to the trustee does not qualify as a fringe benefit as it is defined. It is, therefore, unnecessary to consider the application of the anti-avoidance provisions in s 67 of the FBTA Act . Cameron Brae's appeal in proceedings numbered VID 469 of 2003 must, accordingly, be upheld, the Commissioner's decision to disallow its notice of objection must be set aside and the objection to the assessment of fringe benefits tax should be allowed in full. Section 222C(4) defines "authority" as including taxation legislation, material admissible under s 15AB(1) of the Acts Interpretation Act 1901 (Cth) (such as explanatory memoranda and second reading speeches), a decision of a court and a decision of the Administrative Appeals Tribunal. 77 Counsel for Cameron Brae submitted that, if it were held that the contribution of $500,00 was not deductible, its contention that the contribution was deductible nevertheless satisfied the criteria for establishing a reasonably arguable position. The applicant relied on the guidelines for the application of s 226K outlined by Hill J in Walstern and endorsed by a Full Court of this Court in Pridecraft Pty Ltd v Federal Commissioner of Taxation (2005) 213 ALR 450; (2004) 58 ATR 210; 2005 ATC 4001, at [108]. 78 In Walstern, Hill J emphasised that, when considering whether an argument advanced by a taxpayer is about as likely as not correct, the decision-maker does so from the standpoint that the taxpayer's argument has already been found to be wrong. It was therefore submitted on behalf of Cameron Brae, that the Court, having reached this point in its consideration, should be careful not to allow hindsight to affect its view of the merits of the taxpayer's argument. It was said to be sufficient, as Hill J made clear in Walstern , if, after weighing the contentions for and against liability to tax, the balance is such that those advanced by the taxpayer can objectively be said to be one that "while wrong could be argued on rational grounds to be right". 79 I have not overlooked the caveat against hindsight which Hill J entered in his very clear explanation in Walstern of the application of s 226K of the Act . However, it should be apparent from the foregoing reasons that the contribution of $500,000 was not deductible because it could not be characterized as having been made for the sole purpose of providing superannuation benefits for employees of Cameron Brae or as having been an outgoing incurred in gaining or producing Cameron Brae's assessable income. The inability to characterize the contribution in either of those ways reflected provisions in the IS & PL Trust Deed, the existing superannuation provisions for David Hazlett, other circumstances personal to David and Andrew Hazlett and aspects of Cameron Brae's business. It was not objectively arguable that a different view could respectably be taken of any of those matters, particularly in light of the candid concessions made in some of the affidavits relied on by the taxpayer. On the other hand, the arguments for deductibility depended on a selective analysis of the trust deed, and a blinkered concentration on what were perceived to be the commercial advantages to Cameron Brae of attracting and retaining Andrew Hazlett's participation in the business. In these circumstances, I am not satisfied that the claim for the deduction reflected an application of the law which, when the claim was made, was reasonably arguable as having been correct. There will therefore be an order in proceedings numbered VID 419 of 2003 that the application be dismissed and that Cameron Brae pay the Commissioner's costs of that application. 81 In respect of the assessment of fringe benefits tax, the dispositive orders have already been indicated at [ 74 ] of these reasons. There will also be an order in those proceedings numbered VID 469 of 2003 that the Commissioner pay Cameron Brae's costs of those proceedings. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. | income tax deduction claimed for contribution to offshore fund governed by trust deed allowing benefits to be paid to discretionary members at trustee's discretion director and his son (an employee of taxpayer) nominated by taxpayer as discretionary members whether contribution made for sole purpose of making provision for superannuation benefits for an eligible employee whether contribution a loss or outgoing incurred in gaining taxpayer's assessable income. fringe benefits tax whether fringe benefits tax payable in respect of contribution to a fund governed by trust deed allowing benefits to be paid to discretionary members at trustee's discretion two employees of taxpayer nominated as discretionary members trustee's discretion not yet exercised. taxation penalties whether contention in support of claimed deduction was reasonably arguable. taxation taxation |
The applicants' notice of motion dated 24 November 2006 be dismissed. The question of costs on that notice of motion be reserved. The matter be listed for directions at 9.00 am on Friday 31 August 2007. The defence of Selected Seeds be filed and served within 7 days of the date hereof. The seventh cross-respondent be given leave to appear at the trial of the claim on the originating process. The question of costs on the notice of motion be reserved. The first cross-respondent/second cross-claimant have leave to appear at the trial of the claim on the originating process. 2. The question of costs on the notice of motion be reserved. 5 The relevant parties have now made submissions on the questions of costs reserved in the above orders. Landmark Operations Limited, Mr Michael Gargan, Selected Seeds Pty Ltd and Top End Rural Supplies Pty Ltd be jointly and severally liable to pay the applicants' costs of and incidental to the notice of motion to be taxed in default of agreement. 2. Each of the parties liable under the above order be at liberty to apply for orders as to the appropriate contribution to the said costs as between them. On Selected Seeds Pty Ltd's notice of motion dated 29 March 2007 the costs of the notice of motion be reserved save and except that there be no order as to the costs of the hearing on 13 July 2007. 6 My reasons for making these orders follow. Landmark opposes such an order and submits that there should be no orders as to the costs of the application. Mr Michael Gargan, Selected Seeds and Top End Rural Supplies also oppose such an order but, unlike Landmark, each submit that, in fact, the applicant should pay his or its costs of the application. 8 In the course of submissions, the applicants suggested that they should be awarded costs on a solicitor and client basis, but there are no circumstances in this case which warrant such an order ( Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 ; (2001) 109 FCR 77. 9 The application was unsuccessful. The usual order as to costs in those circumstances is that the costs of the successful party to an application are paid by the unsuccessful party: Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 (" Oshlack ") at 96-97 [66]-[68] per McHugh J. There are exceptions to the usual order or circumstances in which it is not made. The difference between the majority and minority in Oshlack was as to the width of the exceptions to the usual order or circumstances in which it is not made. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute. Apart from anomalous examples in the equity jurisdiction, there are very few, if any, exceptions to the usual order as to costs outside the area of disentitling conduct. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party. 12 The cross-respondents --- Mr Michael Gargan, Selected Seeds and Top End Rural Supplies --- submit that the usual order should be made in this case. In the course of their submissions they also submitted that the application for separate trials was premature. 13 The applicants submit that costs should be awarded in their favour because the application would have succeeded had Selected Seeds (in its application for leave to defend) not put forward an arguable plea of proportionate liability on 25 July 2007. There is an analogy here with costs thrown away. The applicants submit that their costs associated with the application are in effect wasted costs because had Selected Seeds raised the arguable plea of proportionate liability earlier, they would not have been incurred (see the discussion of costs thrown away in G E Dal Pont, Law of Costs (2003) [p 23] [14.36]). 14 The relevant events in chronological order are as follows. 15 The applicants commenced this proceeding on 3 April 2006, and issued their application for an order for separate trials on 24 November 2006. As at the latter date, Landmark had filed a defence and issued a cross-claim against Mr Michael Gargan. On 15 September 2006, Mr Michael Gargan issued cross-claims against Simon and Kate Gargan, Selected Seeds, Australian Premium Seeds Pty Ltd, Seed Testing Laboratory of Australia Pty Ltd, and the State of Queensland. 17 It is significant that the application issued by the applicants did not then come on for hearing until almost two months later. The oral submissions on the application were heard over two days on 18 and 19 January 2007. Between 24 November 2006 and 18 January 2007, defences to various cross-claims were filed and further cross-claims were issued in February and March 2007. 18 Landmark, Mr Michael Gargan, Selected Seeds and Top End Rural Supplies each opposed the application for separate trials. Landmark did so on grounds often pressed in opposition to an application for separate trials. I refer to [68] of my previous reasons. Selected Seeds, although submitting that the application was premature, submitted that there was sufficient before the Court for it to decide that the application should be dismissed. It raised an additional submission to the submissions put by Landmark. That additional submission involved the proportionate liability provisions set out in my previous reasons (at [52]-[57], [63]-[65]). In those reasons, I refer to the contentions advanced by Selected Seeds (at [53], [58], [59] and [62]). For convenience, I will use the shorthand reference to those contentions adopted in argument, namely, the "causation model" and the "liability model". Selected Seeds submitted that the causation model was at least arguable and that for that reason (together with other matters which were similar to those matters advanced by Landmark) an order for a separate trial should not be made. The submission that the causation model was arguable was a prominent submission on the hearing of the applicants' application in terms of the time it occupied. For reasons set out in my previous reasons, the causation model is not an arguable construction of the proportionate liability provisions (at [50]-[67]). As I said in my previous reasons, the liability model was advanced very much as a subsidiary argument and at that time there was, to say the least, little to indicate that any of the cross-respondents were directly liable to the applicants (at [50], [68]). 19 Mr Michael Gargan and Top End Rural Supplies put submissions similar to those put by Selected Seeds. They submitted that, in fact, they had no choice but to make submissions in opposition to the application for separate trials after the applicants applied for an additional order during the submissions on 18 and 19 January 2007. It should be noted that at no time did the applicants oppose any of the cross-respondents being given leave to appear at the hearing of the applicants' claim against Landmark. 21 Each application came on for argument on 13 July 2007. The proposed defence put forward by Selected Seeds at the time of the argument on 13 July 2007 raised a number of factual issues apparently not raised by Landmark and those issues are identified in [75] below. In addition to the proposed defence it raised two allegations under the proportionate liability provisions of the TPA and the PLA. First, it pleaded that Australian Premium Seeds and Seed Testing Laboratory were each liable to the applicants and were concurrent wrongdoers within the relevant provisions. However, no particulars were provided such that it could be concluded that either of them was even arguably liable to the applicants. Secondly, it pleaded that Mr Michael Gargan, Simon and Kate Gargan, Australian Premium Seeds, Seed Testing Laboratory, State of Queensland, and Top End Rural Supplies were concurrent wrongdoers within the construction of the relevant provisions previously advanced by Selected Seeds and which I have rejected as not being arguable. After submissions on 13 July 2007, Selected Seeds put forward a different proposed defence. This proposed defence raised proportionate liability as part of a plea only that the cross-respondents were directly liable to the applicants and it contained particulars in support of that allegation. I granted leave to defend in terms of that document. Mr Michael Gargan maintained his application as originally made which I refused as far as leave to defend was concerned. I made that decision for two reasons. First, for the reasons I have given, the broader construction of the proportionate liability provisions is not arguable and, secondly, Mr Michael Gargan's proposed defence raises nothing more than what is contained in Selected Seeds' proposed defence and I do not consider it appropriate to grant leave to defend to more than one cross-respondent. Selected Seeds' application should be granted in preference to that of Mr Michael Gargan because its application was the first in time and, more importantly, its proposed defence does not contain a plea as to the proportionate liability provisions which I have concluded is not arguable. On hearing that Selected Seeds had been given leave to defend, Top End Rural Supplies withdrew its application for leave to defend and was content with an order that it have leave to appear at the hearing of the applicants' claim against Landmark. The seed delivered to the applicants by Landmark was in fact jarra grass seed. 2. It is of no consequence that the seed was not "pure seed or certified as such". 3. The applicants adopted inappropriate farming practices and this caused the failure to achieve a commercially viable crop of jarra seed and hay in the first and subsequent germinations. Contributory negligence by the applicants. A failure to mitigate by the applicants and issues as to the loss and damage claimed by the applicants. 6. The effect of the proportionate liability provisions on Landmark's liability to the applicants on the basis Michael Gargan, State of Queensland, Simon Gargan and Kate Gargan, Selected Seeds, Seed Testing Laboratory and Top End Rural Supplies and each of them is liable to the applicants. Some of these matters are not raised in Landmark's defence and in other cases it is unclear whether they are raised in a way which will enable Landmark to bring forward a positive case at trial. It was the latter plea which led to the dismissal of the application for separate trials (see my previous reasons at [69]). As soon as the arguable plea of proportionate liability was put forward, the applicants effectively acknowledged that their application could not succeed. On 10 August 2007, counsel for the applicants said that the applicants recognised "that that has devastating consequences for our application". 24 The application was not premature. A number of cross-claims had been issued and there was sufficient for the applicants to mount an argument that there should be an order for separate trials. While Selected Seeds and the other relevant cross-respondents submitted at the time that the application was premature, they submitted that the application could be dealt with on the material before the Court. They advanced an unarguable construction of the proportionate liability provisions, that is, the causation model. 25 The application would have succeeded but for the arguable plea of the proportionate liability provisions (that is, the liability model) which was not advanced until Selected Seeds put forward its proposed defence on 25 July 2007. I suggested in my previous reasons that the applicants' case for the principal order was a strong one (at [22], [68]). It seems to me that for the reasons set out in those paragraphs, this was an appropriate case for a separate trial. It would probably have been necessary for me to make other orders as well including, perhaps, the additional order sought by the applicants. 26 The Federal Court Rules do not require that an application for leave to defend be made by a particular time. Such an application can be made on any directions hearing or on the trial or hearing of the cross-claim (O 5, r 12). However, that is not decisive here where the issue is which party is liable for the costs of a particular application in all the circumstances of the case. I am not satisfied that the step which defeated the application, that is, a properly particularised and arguable plea of proportionate liability put forward on 25 July 2007 could not have been put forward earlier in a way which would have avoided the costs, or the bulk of the costs of the application. As I said earlier, another way of viewing the matter is that the applicants' costs of the application are costs thrown away on the application for leave to defend in terms of the proposed defence put forward by Selected Seeds on 25 July 2007. 27 In the circumstances set out above, it seems to me that the proper order is that Landmark, Mr Michael Gargan, Selected Seeds and Top End Rural Supplies should pay the applicants' costs of the application for an order for separate trials. The liability is joint and several, but it is not necessarily the case that as between the parties who are liable each should make an equal contribution to that liability. I will give the parties who are liable liberty to apply for orders as to the contribution to be made as between them. I think the costs of the hearing on 13 July should be dealt with in a way different from the other costs associated with the respective applications. Selected Seeds was successful in obtaining leave to defend in relation to a draft defence dated 24 July 2007. That was not the defence which was the subject of submissions on 13 July 2007. The draft defence which was the subject of submissions contained an unarguable plea of proportionate liability based on the causation model, and a plainly inadequately particularised plea of proportionate liability based on the liability model. The fact that a draft defence of that nature was put forward is a reason not to award costs to Selected Seeds. On the other hand, I think it is correct to say that although the applicants' approach on 13 July 2007 to the applications for leave to defend was measured and not one of outright opposition, they did not concede the application and Selected Seeds has been successful in its application to defend the applicants' claim on a number of grounds including those I identified in [75] of my earlier reasons (see [22] above). Having regard to these circumstances, the appropriate order in relation to the hearing on 13 July 2007 is that there be no order as to costs. 29 The other costs of Selected Seeds' application for leave to defend should be reserved. That seems to me to be the appropriate course because the fate at trial of the defences raised by Selected Seeds in its defence may be relevant to the question of the appropriate order as to costs of the application for leave to defend. 30 Having regard to the way in which the applications proceeded and were argued, I think the same orders should be made on the notices of motion issued by Mr Michael Gargan and Top End Rural Supplies, respectively. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | costs where applicant's application for separate trials refused where ground on which application refused not raised until six months after hearing of application where application would otherwise have succeeded whether applicant ought to have its costs of application for separate trials whether costs thrown away procedure |
Murdaca applied to the Administrative Appeals Tribunal ("the AAT") under s 43 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act "), for review of the disqualification. On 18 March 2008, the AAT set aside the disqualification: Murdaca v Australian Securities and Investments Commission [2008] AATA 209. 2 ASIC has appealed to this Court, pursuant to s 44 of the AAT Act , contending that the decision of the AAT is affected by several errors of law. ASIC's principal complaint is that the AAT misconstrued and misapplied s 206F of the Act . I agree. These reasons for decision identify the errors and explain why the matter will be remitted to the AAT, differently constituted, to be heard and determined according to law. B. The notice required Murdaca to demonstrate why he should not be disqualified from managing corporations. In these circumstances, you are required to demonstrate, in accordance with subparagraph 206F(1)(b)(i) of the Act , why you should not be disqualified from managing corporations. ... In making a decision under subsection 206F(1) of the Act ASIC is required to give you an opportunity to be heard in relation to why you should not be disqualified from managing corporations. The documents on which these concerns are based are listed in Attachment "B". On 20 February 2007, Murdaca applied to the AAT for review of the disqualification. On 2 April 2007, the AAT refused Murdaca's application for a stay of the disqualification. 5 On 10 August 2007, ASIC and Murdaca each filed a statement of facts and contentions ("SFCs") in the AAT. A copy of the historical company extract for each company is at ST1, and ST2. Each of these companies was placed into liquidation in a creditors['] voluntary winding up. In each case, Mr [Ross] McDermott was the administrator and subsequently the liquidator. In each case, he lodged a report with [ASIC] pursuant to section 533 of the Act . These reports are referred to at T5.8, page 149-150. A copy of these reports is at ST3 and ST4. The company was wound up on 4 April 2003. In his section 533 report, the liquidator stated that he believed that, at the time of being wound up, [Murdaca] was a "deemed director". The company was wound up on 4 April 2003. Again, the liquidator stated that he believed that, at the time of being wound up, [Murdaca] was a "deemed director". Witnesses were called by both parties. The parties filed and served written submissions after the hearing. As noted earlier, the AAT set aside the disqualification. Before turning to consider the AAT's decision it is necessary to consider s 206F of the Act and its proper construction. ASIC maintains a public register of disqualified directors and other officers: s 1274AA of the Act . Disqualification can be automatic (s 206B) , by reason of court order (ss 206C , 206D and 206E ) or as a result of a discretionary decision by ASIC when certain preconditions exist, including an adverse report by a liquidator as to the solvency of a company the person has managed (s 206F). It is the last category of disqualification that is at issue in this appeal. 10 The phrase "managing corporations" is addressed in s 206A of the Act . 11 "Officer" of a corporation is defined in s 9 of the Act and is in analogous terms. These latter capacities are sometimes described as being a "deemed director" or a "shadow director": Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159 ; (2006) 24 ACLC 1526. Such descriptions can, at times, be misleading. Names and labels aside, what is required is a critical assessment of the way in which a corporation is managed and then an assessment as to whether the conduct of the person concerned falls within one or more of the categories identified. 12 Returning to the substantive provision at issue, s 206F(1)(a)(ii) specifies two conditions to be satisfied "within 7 years immediately before ASIC gives a notice under paragraph (b)(i)" (emphasis added). The conditions are: (1) the person must have been an officer of 2 or more corporations; and (2) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under s 533(1) of the Act about the corporation's inability to pay its debts . 13 Section 206F , in its current form, was introduced as part of the Corporate Law Economic Reform Program Bill 1998 (Cth) ("CLERP"). The predecessor to s 206F was s 600 of the Corporations Law ("the Law"). Although the language of the sections is not identical, a number of earlier decisions that considered s 600 of the Law continue to be of assistance. 14 As those earlier decisions make clear, the preconditions to the operation of the section are just that --- preconditions. For example, ASIC is not denied jurisdiction if the matters contained in a s 533 report have been wholly or partly rectified: Jorgensen v Australian Securities and Investments Commission (1999) 30 ACSR 481 at 483 and Dwyer v National Companies and Securities Commission (1988) 13 ACLR 716 at 720. As Heerey J said in Jorgensen , once s 533 reports have been lodged regarding two or more relevant corporations in respect of which the person was an officer within the previous seven years, the jurisdiction to make the order is established: at 483. Whether the matters in the report have been wholly or partly rectified is a matter that goes to the merits of whether ASIC, or in this case the AAT standing in the shoes of ASIC, should exercise the jurisdiction to make a disqualification order, not the existence of that jurisdiction. 15 The fact that a precondition to the enlivening of the jurisdiction under s 206F(1)(a)(ii) is the mere issue of a s 533 report of a particular kind and that the merits of the report are considered by ASIC under s 206F(1)(c) and (2) when deciding whether it should make a disqualification order is not surprising. Under s 533 of the Act , a liquidator of a corporation must report to ASIC if it appears that a company may be unable to pay its unsecured creditors more than 50 cents in the dollar. A liquidator need not demonstrate or prove that the company is unable to pay its unsecured creditors 50 cents in the dollar. 16 Moreover, once the preconditions are met, ss 206F(1)(b) of the Act specifies what ASIC must then do. It requires ASIC to give the person a notice in the prescribed form requiring them to demonstrate why they should not be disqualified. In the present case, the notice was in the form set out in [3] above. Prior to reaching a decision, ASIC, in addition to giving the notice, must also make available to the person all the material available to ASIC on which the decision will be based and provide the person with an opportunity to respond to, make submissions and call evidence in relation to the material before ASIC: Laycock v Forbes (1997) 150 ALR 186 at 193-94. That does not necessarily mean an oral hearing: Jorgensen at 486. 17 In practical terms, s 206F has a logical structure and operation. Section 206F(1)(a) provides a filter --- if a person has been an officer of two or more corporations within the last seven years where the liquidator of each company has filed a s 533 report, then ASIC is entitled to serve a notice on that person requiring them to demonstrate why they should not be disqualified. Put another way, the legislature has decided that the mere fact those prescribed events occurred within the seven years is sufficient to permit ASIC to require the person concerned to demonstrate why they should not be disqualified. The person served with the notice has a choice. They may take the opportunity (see [16]) to demonstrate why they should not be disqualified or they may choose to stand silent. Either way, ASIC proceeds to determine whether the disqualification is justified by reference to the matters set out in s 206F(2). Of the matters to be considered, one is mandatory (s 206F(2)(a)) and the others are discretionary (s 206F(2)(b)). For present purposes it sufficient to note that ASIC advanced four grounds of appeal. Each ground of appeal alleged an error of law affecting the AAT's decision. 19 The errors identified by ASIC were: (1) the determination by the AAT that it was not necessary to consider matters relating to AAMIC; (2) the determination by the AAT that MPP was not a company that fell within s 206F(1)(a)(ii) ; (3) the determination by the AAT that it was not necessary to consider Delitat and TMVP; and finally (4) the determination by the AAT that it was not necessary to consider the totality of the evidence concerning Murdaca's conduct in relation to the management of corporations. The determination by the AAT that it was not necessary to consider Murdcaca's involvement in AAMIC was an error. 21 In the present case, contrary to the third of the conclusions of the AAT set out above, the preconditions to the operation of s 206F were satisfied --- within seven years immediately before ASIC gave the notice under s 206F(1)(b)(i) to Murdaca, Murdaca had been an officer of three corporations (being the three corporations specified in the notice including AAMIC) and within 12 months after Murdaca ceasing to be an officer of those corporations, each was wound up and a liquidator lodged a report under s 533(1) of the Act about the corporation's inability to pay its debts. 17.05.05 AMI Director and secretary from 13.09.00 --- 02.01.03 04.03.03 Yes. 08.03.05 MPP Director from 10.11.00 --- 02.01.03 04.03.03 Yes. What is relevant for purposes of s 206F(1) , as noted earlier, is no more and no less than the mere fact that the reports had been lodged and contained statements to the effect that it appeared that the company in question might be unable to pay more than 50 cents in the dollar to its unsecured creditors. The AAT was thus not entitled to exclude Murdaca's involvement in AAMIC from consideration on the basis that, because the s 533 reports in respect of MPP and AMI were erroneous or should not have been lodged, there were less than the two corporations required by s 206F(1) and thus the jurisdiction under s 206F(2) was not enlivened. What impact or significance should attach to Murdaca's conduct in relation to AAMIC in the context of the making of a disqualification order is ultimately a matter for the AAT when the matter is remitted to it to be determined according to law. On remittal, the AAT may yet decide that Murdaca's involvement in AAMIC is not relevant to, or does not justify, disqualification; the point here is only that it cannot do so on the basis that it lacks jurisdiction. The contrary view expressed by the AAT in the decision under review reveals that the AAT failed to properly construe s 206F(1)(a)(i) and that error may have affected the result below. As a result, the AAT concluded that the liquidator of MPP had incorrectly reported to ASIC under s 533 of the Act when a condition for the operation of s 533 of the Act (that it appear that MPP might be unable to pay its unsecured creditors more than 50 cents in the dollar) had not been fulfilled. 24 In this respect, the AAT failed to properly construe s 206F(1)(a)(ii) and s 533(1)(c) of the Act . 25 To repeat, s 206F(1)(a) specifies two conditions to be satisfied within seven years immediately before ASIC gives a notice under paragraph (b)(i): (1) the person must have been an officer of two or more corporations (sub-par(i)) and (2) while the person was an officer, or within 12 months after the person ceased to be an officer of those corporations, each of the corporations was wound up and a liquidator lodged a report under s 533(1) of the Act about the corporation's inability to pay its debts (sub-par(ii)): see [13] to [15] above. In the present case, both preconditions were satisfied (see [21]-[22] above) by establishing merely that reports to the relevant effect had been lodged, erroneously or not, and the AAT had jurisdiction to make a disqualification order. Whether it proceeded to make such an order depended upon its proper consideration of the matters specified in ss 206F(1)(c) and 206F (2), and under those sections it would be entirely proper to consider whether the contents of the reports were correct, whether the matters referred to had been in some way rectified, or other such factors. 26 In addition to making the procedural error of considering that it could go behind the lodgement of the reports into their contents for purposes of the jurisdictional analysis (as opposed to the merits analysis), the AAT's analysis of the contents of the s 533 report lodged by the liquidator of MPP was itself erroneous. That is, the AAT ignored the express words of s 533(1)(c). As noted earlier (see [15]), under s 533 of the Act , a liquidator of a corporation must report to ASIC if it appears that a company may be unable to pay its unsecured creditors more than 50 cents in the dollar. A liquidator need not conclusively, whether on the balance of the probabilities or otherwise, demonstrate or prove that the company is unable to pay its unsecured creditors 50 cents in the dollar. That it later turned out that MPP could in fact pay its unsecured creditors in full (or that it had no unsecured creditors) does not impugn the propriety of the liquidator's conclusion at the time that it appeared that the company might not be able to meet its debts. 27 MPP was a company that satisfied the preconditions of s 206F(1)(a). As a result, the AAT decided that they could not "arise for consideration for disqualification". The AAT went on to state that "their relevance was related to the justification for disqualification and the period of that disqualification, if that became necessary": [2008] AATA 209 at [5] . 29 The AAT's reasons for decision on this aspect of the matter are by no means clear. It appears that the AAT accepted that it had a discretion to consider Delitat and TMVP under ss 206F(1)(c) and 206F (2), but not under s 206F(1)(a). To the extent that the AAT intended to suggest that because the notice (see [3] above) did not refer to Delitat and TMVP it was not open to the AAT to have regard to Murdaca's involvement in these two latter corporations for purposes of the jurisdictional analysis, that is an error of law for the reasons set out in [39]-[41] below. 30 Moving to the merits analysis, the preconditions to the operation of s 206F having been satisfied, the Delitat and TMVP circumstances were, as the AAT appears to have accepted, relevant to its consideration of whether to exercise the disqualification power under ss 206F(1)(c) and 206F (2). As with AAMIC, the significance to be attached to Murdaca's conduct in relation to Delitat or TMVP in the context of the making of a disqualification order is ultimately a matter for the AAT when the matter is remitted to it to be determined according to law. 32 Once the preconditions to the operation of s 206F are satisfied, the task of the AAT (standing in the shoes of ASIC) is to satisfy itself that the disqualification is justified. As s 206F(2)(b)(i) of the Act provides, the decision-maker is entitled to have regard to a person's conduct in relation to management, business or property of any corporation, to whether the disqualification would be in the public interest and to any other matter that the decision maker considers appropriate. The AAT's refusal to consider Murdaca's conduct in relation to AAMIC, Delitat and TMVP was an error of law. As has already been stated, the significance to be attached to Murdaca's conduct in relation to any one of those entities in the context of the making of a disqualification order is ultimately a matter for the AAT when the matter is remitted to it to be determined according to law. The AAT may well decide that, even though it has the jurisdiction to make the order, it is not satisfied that such an order is justified. Murdaca's principal complaint appeared to be that because ASIC did not afford him an opportunity to cross-examine the liquidators who compiled the s 533 reports referred to in the notice served on Murdaca (see [3] above) the hearing before ASIC was "vitiated by jurisdictional error" and that there was therefore nothing for the AAT to review. There is a complete answer to this contention. 35 Consistent with the authorities (see [16]) to the effect that an oral hearing is not required, there was nothing to suggest that ASIC failed to comply with its statutory obligations in the manner in which it conducted that oral hearing. Moreover, even if there was an error of the kind complained of by Murdaca (and there was not), such an error would not deprive the AAT of the statutory authority to deal with the application on the merits. That is not to say that the provisions in s 206F(1)(b) for notice and opportunity to be heard have no teeth at all. Suppose that ASIC decided to disqualify a person the day after issuing a notice and without providing any opportunity to be heard, whether by written submission or otherwise. Upon an application for review under s 43, the AAT could set aside the disqualification decision on that basis alone. The AAT would not, however, be deprived of the power to decide de novo whether, with the benefit of proper notice and opportunity, disqualification might still be justified. 36 To understand why, it is necessary to return to the basic structural provisions of the AAT Act and the authorities explaining those provisions. Section 43(1) of the AAT Act gives to the AAT "all the powers and discretions that are conferred by any relevant enactment on the person who made the decision...". Important consequences flow from that provision. It is all the "powers and discretions" which ASIC had when making the disqualification order, not the procedures which bind ASIC, to which the AAT accedes: cf Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed [2005] FCAFC 58 ; (2005) 143 FCR 314 at [41] and [44]. The AAT's procedures are prescribed by s 39 of the AAT Act : see also Sullivan v Secretary, Department of Transport (1978) 1 ALD 383 at 402-403. As a result, any failure on the part of ASIC to comply with its statutory procedures will not deprive the AAT of statutory authority to deal with an application for review of the decision of ASIC. Any such defect is "cured" by the AAT when an applicant is made aware of the substance of the allegation made against them and the AAT provides them with an opportunity to respond to the allegations: eg Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344 at [32] . 37 Counsel for Murdaca attempted to distinguish the foregoing authorities on the basis that, in contrast to the relevant provisions in the migration legislation, the requirements of s 206F(1)(b) are substantive preconditions to the enlivening of the administrative disqualification jurisdiction rather than procedural due process requirements, such that a defect could not be cured on review by the AAT. In effect, counsel took the view that the AAT's review of a s 206F disqualification decision by ASIC was not and could not be a hearing de novo. That view is entirely inconsistent with the basic structure of ss 39 and 43 of the AAT Act as explained by the case law. In the absence of any explicit legislative statement to that effect in s 206F(1), the submission must be rejected. 38 The contention that ASIC's decision (and therefore the AAT's) was vitiated by jurisdictional error based on a denial of natural justice is thus both without foundation and irrelevant. Murdaca submitted that because the notice listed three companies (see [3] above) and did not refer to Delitat and TMVP, it was not open to the AAT to have regard to these two latter corporations for some, if not all, purposes. In support of that contention, counsel for Murdaca submitted that a notice in the prescribed form must list all of the corporations relied upon to ensure that someone in the position of Murdaca is accorded natural justice by being provided with all proper particulars at an early stage. I reject those contentions; a s 206F(1) notice is not the equivalent of a pleading which defines the limits of the case that may be put. 40 As noted earlier, s 206F(1)(a)(ii) specifies two conditions to be satisfied. Once those preconditions are met, s 206F(1)(b) of the Act requires ASIC to give the person a notice in the prescribed form requiring them to demonstrate why they should not be disqualified. Service of the notice, therefore, is important. But that is neither the end of s 206F nor the end of the enquiry. Importantly, s 206F(1)(b) does not require any or all of the s 206F(1)(a) preconditions to be stated in the notice itself; it merely requires that the notice be in the prescribed form. The contents of that form are governed by regulation: Corporations Regulations 2001 (Cth) at Schedule 2 Form 5249. (Of course, the fewer the relevant matters that are put in the notice, the more likely it is that a reviewing decision-maker might find that proper notice and opportunity to be heard were not given. ) As noted earlier, the preconditions are the filters which identify which person or persons might be subject to a disqualification order. There will inevitably be facts and matters outside the four corners of the notice which will support the discretion to make such an order and facts and matters which might tend against the making of such an order. 41 Before reaching a decision, the decision-maker must make available to the person all the material available to it on which the decision will be based and provide the person with an opportunity to respond to, make submissions and call evidence in relation to the material before ASIC: Laycock . Provided that proper notice and opportunity to be heard are given, the fact that a relevant matter is not stated in the initial s 206F notice will not in itself provide a basis for consideration of that matter to be excluded. That obligation to provide due process is an obligation which exists separately from (though it is not unrelated to) the requirement to issue the notice. A s 206F(1)(b) notice is merely the initial way in which ASIC puts certain of those matters before the person in respect of whom a disqualification order is being considered. Murdaca's complaint about the form of the notice is also without foundation. That contention is also rejected. As noted earlier (see [17]), s 206F has a structural logic and operation pursuant to which the jurisdictional analysis and merits analysis are separate. 43 Section 206F(1)(a) provides the filter --- if a person has been an officer of two or more corporations within the last seven years where the liquidator of each company has filed a s 533 report - then ASIC is entitled to serve a notice on that person requiring them to demonstrate why they should not be disqualified. The person served with such notice has a choice. They may take the opportunity (see [16]) to demonstrate why they should not be disqualified or they may choose to stand silent. The contents of the s 533 reports will be before ASIC. Absent a challenge to the contents of a s 533 report (in whole or in part) or material in the possession of ASIC casting doubt on the veracity of a s 533 report, I can identify no reason why ASIC should be required to conduct some further or separate enquiry to verify the matters contained in a s 533 report prepared by a liquidator of a company. If there are matters contained in a s 533 report that a person subject to a possible disqualification order seeks to challenge, then the person will have notice of those matters and an opportunity to address them. 44 Counsel for Murdaca nevertheless repeatedly expressed the concern that "if in fact [Murdaca] had done nothing wrong and was vindicated in respect of every corporation, if he was vindicated in respect of all three corporations, according to ASIC they would still be able to disqualify him. " This concern reflected a misunderstanding both of ASIC's submissions and the distinction between the existence of a power or discretion and the circumstances in which the power or discretion may be lawfully exercised. 45 What s 206F says is only that, when certain base conditions are established, a power is enlivened and ASIC is entitled to serve notice on a person requiring them to demonstrate why the power should not be exercised. If that onus is discharged by the person, then to exercise the power regardless would be a miscarriage or abuse of the discretion. To take counsel's own hypothetical concern, if it is indeed found on remittal that Murdaca's involvement with respect to the corporations and matters properly before the AAT is such that he should be "vindicated" (e.g. all of the companies were in fact solvent and/or Murdaca was not involved in the companies' misfortunes), then no reasonable decision-maker could be satisfied that disqualification was justified in those circumstances. In other words, ASIC (or the AAT standing in ASIC's place) would not be able to disqualify Murdaca. Accordingly, the contention that Murdaca will be subject to the unfettered whims of ASIC if inquiry into the contents of the s 533 reports is considered as a merits, rather than jurisdictional question is also without foundation. The question is what should now happen? 47 Much of Murdaca's submissions before this Court were directed at the futility of remitting the matter to the AAT for determination according to law. Some of the factors relied upon by Murdaca were that the disqualification imposed by ASIC was about to expire and that Murdaca had already served 18 months of the two year disqualification prior to the AAT's decision. In my view, those matters are not determinative. As noted earlier, ASIC maintains a public register of disqualified directors and other officers: s 1274AA of the Act . The register performs an important public duty. Any notice of disqualification under s 206F(3) is contained on that register (s 1274AA(2)(b)) and a person may search the register (s 1274A). In other words, a disqualification decision has important consequences (i.e. it is a "black mark" on a person's public record) which persist even after the disqualification period itself expires. Whether Murdaca's name should be on that register is an issue to be determined according to law even if the period of disqualification under the original decision of the delegate (which will become operative again with the setting aside of the AAT's decision) is about to expire. 48 In the circumstances, the appeal should be allowed, the decision of the AAT set aside and the matter remitted to the AAT for hearing and determination according to law. Given the nature of the issues that will arise when the matter is reheard, it is appropriate to direct remitter to the AAT differently constituted. 49 Before leaving the form of orders, it is necessary to address a submission made by Murdaca that, on remittal, the AAT's findings of fact in relation to particular corporations should not be re-agitated. The way in which the AAT conducts a review of the disqualification is prescribed by the AAT Act and the authorities that have considered it. For present purposes, it is sufficient to note that the question for the AAT is "not whether the decision which the decision-maker made was the correct or preferable one on the material before him . The question for the determination of the [AAT] is whether that decision was the correct or preferable one on the material before the [AAT] ": Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 and Shi v Migration Agents Registration Authority [2008] HCA 31 at [98] - [101] . Where, as here, there is no statutory provision confining the AAT to the material before ASIC, the material before the AAT on remittal may include such information about conduct and events that occurred after the decision under review as exists at the time the AAT makes its decision : Shi . 50 Finally, the respondent should pay the applicant's costs of and incidental to the appeal. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | nature of appeal under s 43 of administrative appeals tribunal act 1975 (cth) whether tribunal, standing in the shoes of the australian securities and investments commission (asic) in deciding whether a person should be disqualified from managing corporations, is limited to consideration of material before asic or any material properly before the tribunal at the time of its decision whether procedural defect in proceedings before original administrative decision-maker can be "cured" by adequate notice and opportunity to be heard in s 43 proceedings before tribunal whether consequences of disqualification (i.e. recording of the disqualification in the public register) is such as to prevent mootness and require remittal to tribunal even where period of disqualification will likely expire prior to decision. asic's power to disqualify person from serving as director of corporations under s 206f of corporations act 2001 (cth) whether asic may rely on facts and circumstances relating to corporations not stated in statutory notice whether disqualification power is enlivened even if it is subsequently demonstrated that the some or all of the materials in support of the factual preconditions to the exercise of the power were erroneous. administrative law corporations |
On 30 January 2007 the applicants instituted proceedings against the parties who are now the third, fourth, fifth and sixth respondents in the proceedings. The proceedings are listed before Jacobson J. My understanding is that on 15 June 2007 his Honour made an order the effect of which was to provide for the consolidation of the two sets of proceedings. 2 The proceedings as presently constituted were the subject of a Consolidated Application filed 2 July 2007 and a Consolidated Statement of Claim filed 2 July 2007. The Consolidated Application seeks relief in respect of alleged infringements of various sections of the Copyright Act 1968 (Cth), a section of the Trade Marks Act 1995 (Cth) and relief pursuant to ss 80 , 82 and 87 of the Trade Practices Act 1974 (Cth) in relation to alleged contraventions of ss 52 and 53 of the Trade Practices Act 1974 (Cth). 3 The fifth respondent is Francis George Bernard Cragen, who is apparently the principal director of the third respondent, Impact Gaming Pty Limited. 4 On 21 August 2007 an exhibition was held at the Sydney Convention and Exhibition Centre at Darling Harbour in Sydney. The exhibition was apparently known as the Australasian Gaming Expo, which I presume to be an exhibition in respect of products in the gaming industry, such as poker machines. The applicants are, as I understand it, manufacturers of such machines and the third respondent is, as I understand it, involved in the business of repairing and supplying parts for gaming machines and making second-hand gaming machines available for sale. 5 I have been interrupted by senior counsel for the applicants to indicate that I need not be expansive in relation to the reasons for the costs order that I propose to make as it is not the intention, at least of the applicants or of the fifth respondent, to seek to challenge whatever order I may see fit to make in respect of costs, by way of appeal. In the circumstances I will be brief but I will say a little more about the matter. 6 A chance encounter occurred when two officers of the applicants ran into the fifth respondent in a hotel at Darling Harbour near to the Sydney Convention and Exhibition Centre on 21 August 2007. It is plain beyond argument that the fifth respondent did not pursue the two officers of the applicants whose names were Stephen Parker, sometimes referred to as Steven Parker, and Peter Gardner. The fifth respondent was in the company of a small number of people at the time the incident occurred. 7 In the space of five minutes an incident took place when Mr Gardner and Mr Parker happened into the bar where the fifth respondent was already standing drinking with the people who were with him. When the parties were some distance removed from one another the fifth respondent spoke in a derogatory manner of Mr Parker using words to the effect 'Parker, you little f...c..., you bastard, what are you doing to me? ' That was Mr Gardner's recollection of the communication. Mr Parker's recollection of it was in these terms --- according to Mr Parker the fifth respondent said, 'You can f... off. You are nothing but a f...c... Go away. 9 Before the motion was filed, but more than a month after the incident, a request was made for an undertaking by the fifth respondent not to have contact with the applicants' employees. I will not go into the chain of correspondence in any detail beyond indicating that the fifth respondent viewed the applicants' demands as being unwarranted and proffered undertakings which were not acceptable to the applicants in their terms. 10 Upon the motion coming before the Court today the fifth respondent sought an adjournment of the motion. Following a short adjournment an accommodation was reached between the applicants and the fifth respondent as to the manner in which the motion should be disposed of. An undertaking was given to the Court by the fifth respondent and on the basis of that undertaking the Notice of Motion was, by consent, dismissed leaving for determination the question of costs. 11 Each party has sought an order that the other pay the costs. It seems to me that it would be inappropriate to make any order for costs against the fifth respondent unless it could be demonstrated that there was some basis upon which the court would have, in the exercise of its discretion, ordered relief of the kind sought. 12 I was taken by senior counsel for the applicants to an instance where Jacobson J granted this type of relief in Sony Entertainment (Australia) Ltd v Smith (2005) 64 IPR 18. The conduct there complained of was conduct by a Mr Smith, who made direct approaches to officers of one of the applicants over a period of time on 8 and 9 August 2002 which his Honour described as the sending of a series of threatening SMS messages. A further order was made in respect of similar conduct in relation to another party. 13 It is said by the applicants that the conduct complained of was in the nature of contempt of court and that it was appropriate for threatened contempt to be the subject of restraint by injunctive relief. Reliance was placed upon a passage from Lord Wilberforce's speech in Raymond v Honey [1981] UKHL 8 ; (1983) 1 AC 1 at page 10 where his Lordship said, 'any act done which is calculated to obstruct or interfere with the due course of justice, or the lawful process of the courts, is a contempt of court. ' The principle only needs to be stated for it to be apparent that it has no application whatsoever to the circumstances of this case. It could hardly be said that the abuse meted out by Mr Cragen from a distance to Mr Parker on his arrival at the bar and a demand that he go away could be seen to be calculated to obstruct or interfere with the due course of justice. 14 I have also been referred by senior counsel for the applicants to the judgment of Deane J in a decision of the Full Court of this Court in Australian Builders Construction Employees and Builders' Labourers' Federation v Commonwealth of Australia (1981) 37 ALR 470, with which Bowen CJ agreed and Evatt J expressed his general agreement. In that judgment (at 474) his Honour identified three categories of contempt, one of which was contempt in 'abusing parties who are concerned in causes'. 15 It seems to me that the remark passed in the chance encounter in the bar could not answer the description of such a contempt. The presence of Mr Parker and Mr Gardner in the bar was not as parties to a case or in any way related to the presentation or preparation of the case. A different outcome may well follow if one was concerned with (say) abuse of a litigant by another litigant in an elevator on the way to a level in the Law Courts Building where a case concerning the parties was about to commence. 16 Had I been called upon to deal with this matter on the merits I would have had great difficulty in granting relief such as has been offered by the fifth respondent. Indeed, I would not have been disposed to grant any relief at all on the material to which my attention has been directed. It seems to me that the threats against the fifth respondent and the letters demanding undertakings from him have been unwarranted and he is entitled to his 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 Graham. | motion for injunction to restrain the fifth respondent from having contact with officers of the applicants, following gratuitous abuse meted out in a chance encounter in a city bar. no question of contempt by abuse of parties who were concerned in the current proceedings. motion dismissed by consent upon the giving of an undertaking to the court. costs |
It is not necessary to repeat any of the matters dealt with in that judgment. It suffices to observe that shortly after the judgment was handed down, counsel for the first respondent ("the Minister") contacted my chambers to signal that an application for non-publication of the reasons of that judgment would be made. On Wednesday 30 April 2008, such an application was made. I heard the application, sitting as a single judge. 2 By agreement between the parties, the reasons of the Full Court, as well as the transcript and written submission relating to the hearing of that appeal, were kept confidential until the hearing of the non-publication application on 30 April 2008. At the hearing of this application, I made an interim order that the information remain confidential until the determination of this application. 3 The application by the Minister is for an order that the reasons, transcript and written submissions relating to the appeal not be published until after the determination of any special leave application before the High Court. Such an application must be filed within 28 days from the date of judgment: see Pt 41 r 41.02.1 of the High Court Rules. The Minister seeks this order on the basis that publication of the Full Court's reasons (or the transcript or written submissions relating to the proceeding) would adversely impact the Minister's ability to obtain relevant information and thereby properly discharge his functions under the Migration Act 1958 (Cth). It is also said that publication may have an adverse impact on any persons giving information to the Minister to enable him to carry out those functions. 4 Although counsel for the appellant opposes the application, he is unable to identify any significant prejudice his client might suffer if the application is granted. However, he draws the Court's attention to the important public interest in transparent justice, and notes that the Full Court, in its reasons for judgment, expressly found that the information should not be treated as confidential. 5 Notwithstanding the submissions advanced by counsel for the appellant, I consider that, in the absence of any identified prejudice to the appellant, it is appropriate that the information be treated as confidential until the determination by the High Court of any application for special leave to appeal, or until the expiry of 28 days from the date of the judgment, or until any decision is made not to seek a special leave to appeal. Such orders are made to preserve the subject matter of any appeal. In making this determination, I record that I consulted with Justice Finn and Justice Besanko, and am grateful to their Honours for their comments in relation to this matter. 6 I do not consider that any order should be made as to costs of this application by the Minister. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | application for non-publication judgment said to disclose confidential information prejudice of non-publication. migration law |
On 14 January 2009, I made an order under section 447A(1) that the period within which the administrator of the company must convene a meeting of creditors under section 439A of the Act be extended up to and including 16 February 2009: see Chamberlain, in the matter of South Wagga Sports and Bowling Ltd (Administrator Appointed) [2009] FCA 25. An earlier extension had been granted by Emmett J on 11 December 2008. The order which I made on 14 January provided for the meeting to be held during the extended convening period or within five business days of 16 February and the meeting was duly held on 20 February 2009. At that meeting, the creditors resolved to adjourn the meeting to 6 March 2009, in view of the matter put before the meeting which indicated that a number of parties had expressed the possibility of the company entering into a deed of company arrangement. The meeting was reconvened on 6 March 2009 but the creditors resolved to further adjourn it to 20 April 2009. The meeting was duly reconvened on that date. Shortly before the meeting of 20 April, Mr Chamberlain was contacted by a well-known businessman in Wagga, who advised that he and three other well-known Wagga businessmen were going to put forward a proposal for the club which would involve a deed of company arrangement in a form which was proposed to Mr Chamberlain at that time. However, Mr Chamberlain was informed that there were still a number of issues which needed to be considered in respect of the proposal for a deed of company arrangement. and the creditors resolved at the meeting that it should be adjourned to allow the issues which needed to be resolved with the proposal of the local businessman to be dealt with. Mr Chamberlain informed the creditors that a further extension would involve the necessity for an application to the court, and the creditors resolved that Mr Chamberlain should make that application for an extension of the adjournment period to 1 June 2009. However, because of a number of complications involved in the matter, Mr Chamberlain has determined that it is appropriate to seek an extension of the adjournment period to 15 June 2009. These complications are set out in correspondence from the solicitors for the party proposing the deed of company arrangement. It is unnecessary for me to set those matters out in detail but it is sufficient to say that I am satisfied that the concerns expressed by Mr Chamberlain are well-founded. The affidavit filed by Mr Chamberlain states that during his appointment as administrator of the company, the club has traded profitably, achieving a positive net income. The proposed deed of company arrangement is based upon the establishment of a deed fund which will be made up of a sum of no less than $250,000 to be advanced to the company. Provision is made in the draft deed for a further sum to be advanced but that is subject to certain conditions precedent. The establishment of the deed fund is conditional upon a number of matters referred to in the draft deed forwarded to Mr Chamberlain by the solicitors on 23 April 2009. If the minimum deed fund of $250,000 is provided, Mr Chamberlain estimates that the return to creditors would be approximately 20 to 25 cents in the dollar, whereas if the company is wound up, the estimated return to creditors would be between zero and 10 cents in the dollar. The return to creditors may even be in the order of 50 to 60 cents in the dollar, subject to a number of unspecified factors. The effect of the relevant provisions of the Act is that if I do not make an order today extending the time during which the meeting can be adjourned, the maximum adjournment period will expire tomorrow. That would mean that the company would go into liquidation and the creditors would therefore be deprived of the possibility of a greater return than that which is estimated on the winding up. Mr Chamberlain has formed the view that the creditors will not be prejudiced by a further adjournment because the company is trading profitably. It would also appear that a majority of the creditors are local Wagga businessmen, all of whom want the club to continue its operations. In Re LOCM Pty Ltd (Administrators Appointed) (1997) 79 FCR 35 , Goldberg J came to the view that the court has power under section 447A to make an order extending the time fixed by section 439B(2). His Honour was of the view that the effect of the authorities was that it was not appropriate to extend the period for more than the 60 days which was then the maximum provided under section 439B(2). Goldberg J considered in some detail the authorities which have dealt with the power under section 447A. More recently, in Re Bosnjak Holdings Pty Ltd [2005] NSWSC 527 , Young CJ in Eq came to the view that the power under section 447A is wide enough to authorise an adjournment for a further 60 days from the period set out in the statute. His Honour said that that is the maximum which should ordinarily be allowed. Section 439B(2) now states that the period of the adjournment, or the total periods of adjournment, must not exceed 45 business days. Here, the section 439A meeting was convened on 20 February 2009 and there have been further adjournments as mentioned above. The adjournment which is now sought is 40 business days from 20 April 2009. It may be argued that this period is a significant extension of the period of 45 business days from the date of the meeting prescribed by s 439B(2) , but even if that is so, it is my view that the authorities to which Goldberg J referred in Re LOCM are wide enough to permit the order which is sought. His Honour observed that the power under section 447A is not limited to the operation of filling in gaps in the legislative scheme but that its operation enables the alteration of the operation of a provision in Part 5.3A in relation to a particular company, in particular circumstances. It is true, of course, as the authorities have established, that the legislative intention is that administrations under Part 5.3A are to proceed expeditiously and that the spirit of Part 5.3A is to prevent administrations from being unduly extended. Nevertheless, that needs to be balanced against the policy expressed in a number of the leading authorities that the court ought also to bear in mind the interest of the creditors in obtaining the possibility of a greater dividend than that which would follow from a making of a winding-up order; see for example Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611 at 613. Here, the creditors have requested the administrator to grant an extension up to 1 June but for reasons mentioned above, the administrator has taken the view that a slightly longer period may be required. In the particular circumstances of this case, it seems to me to be appropriate to exercise the power conferred under 447A to make the order which is sought. I will therefore make orders in accordance with the draft orders provided to me. I will sign and date the orders, in accordance with the draft dated 27 April 2009 and that will be placed with the court papers. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application to extend the period of adjournment of the second meeting of creditors beyond period allowed in s 439b(2) of the corporations act 2001 (cth) creditors had resolved to adjourn meeting beyond the prescribed period court has the power under s 447a to extend the adjournment period balance between need for expeditious administration and the interests of creditors. corporations |
2 He applied for a Protection (Class XA) Visa on 22 June 2005. In a statement dated 21 June 2005 the Appellant set forth that he was born into a Sunni Muslim family but converted to Ahmadiyya Muslim Jamaat on 1 January 2000. He went on to state that as he had " changed my religion faith, I am now disowned by family and close relatives ". The claim for the visa was refused on 18 August 2005. 3 There thereafter followed two hearings before the Refugee Review Tribunal, each of which was set aside by the Federal Magistrates Court. The decision of the Tribunal which was the subject of review by the Federal Magistrates Court now under appeal is that handed down on 19 February 2008. That decision affirmed the decision of the Minister's delegate not to grant a protection visa. The Federal Magistrates Court dismissed the application made to that Court: SZIAI v Minister for Immigration [2008] FMCA 788. 5 When the appeal was called on for hearing, Counsel for the Appellant only sought to press the second and fifth Grounds. The remaining Grounds were abandoned. 6 Notwithstanding the terms in which the second Ground of Appeal is now expressed, it is understood that this Ground seeks to contend that the Tribunal should have made further inquiries and, in failing to make those further inquiries, there was a failure to make such inquiries as the Tribunal was authorised to make pursuant to s 427(1)(d) of the 1958 Act and that the decision of the Tribunal was unreasonable. This was an argument raised before the Federal Magistrates Court and resolved against the now Appellant. 7 The fifth Ground of Appeal was an argument raised before the Federal Magistrates Court by the form of Application as filed in that Court. The argument, however, was there abandoned by Counsel then appearing for the now Appellant . This Court is not exercising the original jurisdiction conferred by the Commonwealth legislature upon the Federal Magistrates Court by s 476 of the 1958 Act. The original jurisdiction of this Court conferred by s 476A of the 1958 Act is -- and is expressed to be -- a " limited jurisdiction ". See: SZITU v Minister for Immigration & Citizenship [2008] FCA 758 at [32] per Greenwood J. 9 No argument was advanced, however, on behalf of the Respondent Minister denying the jurisdiction of this Court to entertain the fifth Ground sought to be advanced. The Respondent Minister's position was that this Court should decline to entertain the fresh ground -- not as a matter of jurisdiction -- but rather as a matter of discretion. No Notice of Objection to the competency of the appeal had been filed. Counsel for the Respondent Minister submitted that leave to raise an argument as to non-compliance with s 91R(3) should be refused in circumstances where that was an argument raised for resolution before the Federal Magistrates Court, where the now Appellant was there represented by Counsel, and where (for whatever reason) Counsel then appearing for the now Appellant expressly abandoned reliance upon any alleged non-compliance. 10 In the absence of submissions being advanced which properly addressed the concerns as to jurisdiction, and where ultimately it is unnecessary to do so, the present appeal has not been resolved on the basis that this Court does not have jurisdiction to entertain the proposed further Ground of Appeal . If the issue had been pursued, it is considered that it should have been resolved not by a single Judge of this Court but by the Full Court constituted by three Judges. A FAILURE TO MAKE INQUIRIES? These documents were provided in support of the now Appellant's claim that he had changed his religious faith. Each document provided an address and a mobile phone number whereby those providing the documents could be contacted. 12 Before the Tribunal the question as to whether the now Appellant had changed his religious faith was clearly raised as a central issue to be resolved. During the course of the hearing before the Tribunal, the Tribunal informed the now Appellant that the Ahmadiyya Muslim Association would inform the Tribunal whether a person was or was not an Ahmadi. He was asked whether he consented to an inquiry being made of the Association. As the Tribunal recorded, " if he was telling the truth they would be well-qualified to comment ". If he did not consent, he was further advised that the Tribunal was " minded to draw an adverse inference ". It was after the Tribunal hearing had concluded that the now Appellant's representatives advised the Tribunal that he consented to an inquiry being made. 13 On 15 November 2007 the Tribunal caused an inquiry to be made of the Ahmadiyya Muslim Association of Australia. On 10 January 2008 that Association replied to the Tribunal by annexing a letter received from the Ahmadiyya Muslim Jamaat, Bangladesh. Please refer to your letter No. 386 dt. 25.11.07 regarding [SZIAI]. For your kind information on enquiry our Khulna Jamaat informed me that they could not find out any such name in their record. Both the certificates submit by him are fake & forged. Moreover as you know local Ameer/Presidents can only issue certificates for transfer of a member from one local Jamaat to other Jamaats within the country. Only National Ameer can issue a certificate for international travel/transfer of a member. 14 The now Appellant was invited to respond to the information received by the Tribunal. He cannot, however, otherwise prove that to be so. 15 The Tribunal proceeded to accept the evidence provided by the Association. 17 It was understood that Counsel for the Appellant contended that the failure to make inquiries constituted a denial of procedural fairness. That submission was resisted by Counsel for the Respondent Minister. It was his contention that by reason of s 422B of the 1958 Act " there is no scope for the operation of general requirements of procedural fairness outside the specific provisions of Div 4 of Pt 7 of the Act ": NBKT v Minister for Immigration and Multicultural Affairs [2006] FCAFC 195 at [85] , [2006] FCAFC 195 ; 93 ALD 333 at 353 per Young J (Gyles and Stone JJ agreeing). 18 There was, however, no opposition to advancing the submission as to a failure to make inquiries in terms of the decision being unreasonable. So structured, the dispute centred upon whether or not it was unreasonable not to have made further inquiries. No submission was advanced on behalf of the Appellant, nor could it have been advanced, that the power of the Tribunal to make further inquiries imposed upon it " any duty or obligation to do so ": Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32 at [43] , [2004] HCA 32 ; 207 ALR 12 at 21---2 per Gummow and Hayne JJ. See also: SZJBA v Minister for Immigration and Citizenship [2007] FCA 1592 at [46] , [2007] FCA 1592 ; 164 FCR 14 at 25 per Allsop J; WAGJ v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 277 at [24] . Nor was any submission advanced on behalf of the Respondent Minister that there was not a line of inquiry which was readily available to the Tribunal and centrally relevant to the task being undertaken: eg, Li v Minister for Immigration and Citizenship [2007] FCA 1098 at [28] , [2007] FCA 1098 ; 96 ALD 361 at 367 per Kenny J. The simple submission advanced on behalf of the Respondent Minister was that there was material upon which the Tribunal could justifiably have based its decision and there was, in those circumstances, no duty to inquire further. The response of the Association was disclosed to the now Appellant and he provided his response. 19 The position advanced by the Respondent Minister, that review is available where there has been a failure to make inquiries, is consistent with the proposition that jurisdictional error may be exposed by a failure to inquire and that such a failure may render a decision manifestly unreasonable: Minister for Immigration and Citizenship v Le [2007] FCA 1318 at [60] , [2007] FCA 1318 ; 164 FCR 151 at 172---3. On the one hand, the authorities establish that the Tribunal has no general obligation to initiate enquiries or to make out an applicant's case for him or her. These authorities stretch back over the life of the Tribunal... On the other hand, there is authority for the limited proposition that, in certain rare or exceptional circumstances, the Tribunal's failure to enquire may ground a finding of jurisdictional error because the failure may render the ensuing decision manifestly unreasonable in the sense used in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223 (Wednesbury Corporation). [61] In Wednesbury Corporation [1948] 1 KB at 230, Lord Greene MR summarised what he saw as a fundamental common law principle when he said "[i]t is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere". He added that "to prove a case of that kind would require something overwhelming". A finding of jurisdictional error on the ground of unreasonableness is rare compared with other grounds: see Applicant M17 of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1364 at [29] per North J. It is sometimes said that there must be something exceptional about the case to attract the ground. [62] Although the position in Australia may differ from that in England, the decision in Wednesbury Corporation [1948] 1 KB 223 would support the proposition that an exercise of power that is unreasonable in this sense may ground a finding of jurisdictional error. ... [63] The concept of vitiating unreasonableness has been extended to the manner in which a decision was made. Thus, a failure by a decision-maker to obtain important information on a critical issue, which the decision-maker knows or ought reasonably to know is readily available, may be characterised as so unreasonable that no reasonable decision-maker would proceeded to make the decision without making the enquiry... In this circumstance what vitiates the decision is the manner in which it was made. In circumstances where a migration agent forwards by way of facsimile a cover sheet together with a five page submission and where only the cover sheet is received, it has been held to be unreasonable for the Tribunal not to inquire about the missing pages: SZJBA v Minister for Immigration and Citizenship [2007] FCA 1592 , 164 FCR 14 per Allsop J. 20 In the present appeal, the January 2008 letter provided by the legal representatives of the now Appellant did not make any request for further inquiries to be made. The Tribunal itself, however, was alert to the prospect that a relevant inquiry could be made. The applicant referred to the letter he had produced from Md Nuruzzaman and he noted that it bore a telephone number which could be used to contact him. Nuruzzaman and Md. Millat Hossein were "fake & forged" was a very powerful piece of information from an obviously independent source, and the Tribunal was entitled to rely on that information as persuasive. When that information was put to the applicant for comment, all he could do was disagree and maintain that he was an Ahmadi. [70] Clearly, in the light of reliable information that the 'certifications' purporting to be from Md. Nuruzzaman and Md. Millat Hossein were fakes and forgeries, the Tribunal was not acting unreasonably when it decided not to telephone either of the authors of those documents. What would have been the point? 22 The independence of the source of information from the Association may readily be accepted. And the independence of the information so obtained may well be a reason why ultimately that information should prevail. But, in the absence of inquiries being made, the two diametrically opposed views remained untested. The " point " of making an inquiry of either Mr Nuruzzaman or Mr Hossain (or both), was to obtain their input into the views otherwise being expressed in apparently persuasive terms by the Ahmadiyya Muslim Jamaat in Bangladesh. They may or may not have been able to provide further assistance; but the failure to make an inquiry stripped the Tribunal of their input. It was an inquiry centrally relevant to the issues to be resolved and an inquiry which could readily have been made. An inquiry of the Association may have provided a basis upon which its conclusions as to the certificates being " fake & forged " could be accepted or rejected. 23 The fact that there was evidence which the Tribunal clearly regarded as " reliable information ", namely the letter from the Association, did not absolve it of the requirement to make further inquiries. Whether or not it was unreasonable for the Tribunal not to make further inquiries is not to be resolved by reference to whether there was evidence upon which a particular decision could have been made. Even if there was such evidence, as there was in the present proceeding, it may nevertheless remain unreasonable not to make further inquiries where a finding is to be made which is centrally relevant to the decision to be made and where there is readily available further information which is of immediate relevance to the decision to be made. 24 Nor is the fact that the now Appellant was shown the letter from the Association and extended the opportunity to respond considered sufficient to absolve the Tribunal of the requirement to inquire further. It would, perhaps, not have further advanced the case for the now Appellant to have responded by contending that he adhered to the Certificates previously provided; nor would it have advanced the Department's position to have contended that there was now information supporting its contention. Information immediately relevant to an assessment as to whether the " certificates " of Messrs Nuruzzaman and Hossain were " faked " or " forged " was not information in the possession or control of the now Appellant; information relevant to that assessment was presumably best able to be obtained from those providing the " certificates ". If an inquiry is required to be undertaken, it must be an inquiry of those who can provide meaningful assistance. An opportunity for the Appellant to make submissions, in the circumstances of the present appeal, did not strip the Tribunal of its obligation to make inquiries. It could not reasonably have reached a conclusion either accepting the Certificates provided by the now Appellant or the Association's letter without further pursuing which documents were to be accepted. 25 The circumstances in which a decision of the Tribunal should be set aside by reason of a failure to make inquiries, it is acknowledged, may be a confined category of case: Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47 ; (1985) 6 FCR 155. The circumstances under which a decision will be invalid for failure to inquire are, I think, strictly limited. It is no part of the duty of the decision-maker to make the applicant's case for him. It is not enough that the court find that the sounder course would have been to make inquiries. But, in a case where it is obvious that material is readily available which is centrally relevant to the decision to be made, it seems to me that to proceed to a decision without making any attempt to obtain that information may properly be described as an exercise of the decision-making power in a manner so unreasonable that no reasonable person would have so exercised it. ... This decision was subsequently endorsed by the Full Court: Luu v Renevier (1989) 91 ALR 39. See also: Tickner v Bropho [1993] FCA 208 ; (1993) 40 FCR 183 at 197---8 per Black CJ. It will be a relatively rare case in which a statutory decision is vitiated because of the decision-maker's failure to make inquiries. It will need to be apparent that relevant material was readily available to the decision-maker, but ignored. The circumstances in which an obligation may be imposed upon an administrator to make further inquiries is thus repeatedly said to be " strictly limited ": Wecker v Secretary, Department of Education Science & Training [2008] FCAFC 108 at [109] per Greenwood J (Weinberg J agreeing). And the fact that it is no part of the task of the decision-maker to make out an applicant's case is also repeatedly recognised -- it was referred to at the outset by Wilcox J in Prasad and subsequently emphasised: eg, Luu v Minister for Immigration and Multicultural Affairs [2002] FCAFC 369 at [50] , [2002] FCAFC 369 ; 127 FCR 24 at 40---1 per Gray, North and Mansfield JJ. 26 Whether or not it is unreasonable not to make further inquiries may well depend upon the availability of further information and its importance to the factual issues to be resolved. It may also depend upon the subject matter of inquiry and an assessment of the comparative ability of individuals to provide or to obtain relevant information. There may thus be little (if any) scope for a duty upon a decision-maker to inquire into facts well known to an applicant and facts within his power to adduce: eg, Singh v Minister for Immigration and Ethnic Affairs (1985) 9 ALN N13. In refugee cases, reference may also be made to the comparative difficulty in some circumstances confronted by an applicant seeking refugee status and the comparative ability of decision-makers to elicit further information: cf Taylor S, Informational Deficiencies Affecting Refugee Status Determination: Sources and Solutions (1994) 13 U Tas LR 43. And an assessment as to whether further inquiries should be undertaken may also take into account the importance of a decision upon an individual -- an administrative decision-making process which impacts upon an individual's freedom or a claimed ability to live in freedom may warrant more extensive inquiries being undertaken than one, for example, where the imposition of a modest pecuniary penalty is under consideration. 27 Notwithstanding considerable reservation, it is considered that the Tribunal should have proceeded to make an inquiry of either Mr Nuruzzaman or Mr Hossain or the Association. The issue to which the Certificates were directed was properly accepted by Counsel for the Minister as being centrally relevant to the decision reached. The second Ground of Appeal , construed as it was argued as a contention that the Federal Magistrates Court erred in not concluding that the Tribunal's decision was vitiated by reason of a failure to make inquiries, thus prevails. 28 Any decision which requires a further inquiry to be made, it must be accepted, poses " the risk that an inquiry could never be satisfactorily concluded in the knowledge that another unturned stone may be hiding additional relevant information ": McMillan J, Recent Themes in Judicial Review of Federal Executive Action (1996) 24 FL Rev 347 at 381. But, in the present appeal, a simple phone call may well have been all that was required. The importance of the decision to the Appellant and his family, it is considered, warranted at least such a simple step being undertaken. 29 The Tribunal, it may be noted, had no hesitation in suggesting that an inquiry should have been made of the Association and no hesitation in suggesting that an adverse inference could be drawn against the Appellant in the event that he did not consent to such a course. In the absence of any submission now being advanced that a reasonable apprehension of bias may have arisen on the part of the Tribunal by confronting the Appellant with such a choice, it is unnecessary to make any comment upon the course in fact pursued by the Tribunal. But, having embarked upon its preferred course of making an inquiry of the Association, the Tribunal was thereafter committed to making a further inquiry to resolve the diametrically opposed evidence exposed before it. There may be no general obligation to make inquiries to test the authenticity of documents produced to the Tribunal: eg, Minister for Immigration and Ethnic Affairs v Singh (1997) 74 FCR 553. But where an inquiry initiated by the Tribunal itself places the authenticity of documents otherwise before it in issue, further inquiries should be made to attempt to resolve the conflict that emerges. Having confronted the Appellant with the choice of consenting to an inquiry being made of the Association, or an adverse inference possibly being drawn, it was incumbent upon the Tribunal to at least make a further inquiry of the nature now advanced by the Appellant. No reason has been advanced to explain why the argument now sought to be advanced was previously abandoned by the now Appellant. In any event, the fifth Ground of Appeal is considered to be without sufficient merit to now warrant the granting of leave. Before that Court the now Appellant was represented by Counsel. For whatever reason, that ground was there abandoned. 32 In the absence of some explanation as to why an argument which has previously been raised and abandoned should now be resurrected, it is difficult to see why leave should be given not only to raise the Ground on appeal but to raise it by way of an application to amend the Notice of Appeal as filed, that application being filed only shortly before the hearing of the appeal. The purpose of an appeal is to permit the correction of error, not to permit a fresh application to be brought on different grounds occasioned by a change of counsel: Ngaronoa v Minister for Immigration and Citizenship [2007] FCAFC 196 at [1] per Moore J, at [29]---[30] per Bennett and Buchanan JJ; 244 ALR 119. 33 A party is normally bound by the manner in which it has previously conducted its case: Metwally v University of Wollongong [1985] HCA 28 ; (1985) 59 ALJR 481. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. Appl'd: Gomez v Minister for Immigration and Multicultural Affairs [2002] FCAFC 105 at [18] , [2002] FCAFC 105 ; 190 ALR 543 at 548---9 per Hill, O'Loughlin and Tamberlin JJ. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The importance of litigants, especially in the present statutory context, raising all arguments in need of resolution in the Federal Magistrates Court cannot be underestimated. If a party is entitled to raise issues for the first time on appeal, the appeal court will become de facto the primary court. That is undesirable. It is particularly undesirable where the appellate jurisdiction of the Court is being exercised by a single judge and any right of appeal from that single judge is to the High Court. If a party is entitled to raise an issue for the first time on appeal in this Court, the High Court will be burdened by applications for leave to appeal from judges sitting alone who have not had their decision reviewed. That must be particularly undesirable from the High Court's point of view. [25] Moreover, to allow new grounds of appeal is to defeat the purpose of the legislation which requires that judicial review of a decision of the Refugee Review Tribunal to be within solely the jurisdiction of the Federal Magistrates Court. If new grounds are advanced on appeal, it effectively means that the jurisdiction is being exercised by this Court. 34 More generally, there is a legitimate interest in public law matters being resolved in a timely and efficient manner: cf Iyer v Minister for Immigration and Multicultural Affairs [2001] FCA 929 at [62] , [2001] FCA 929 ; 192 ALR 71 at 86 per Gyles J. 35 In some circumstances it may be accepted that an argument may be permitted to be raised even though it has been " unequivocally disclaimed " before the trial judge: eg, C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539 at [32] ---[35], [2000] FCA 1539 ; 52 IPR 42 at 57---61. The argument there sought to be raised on appeal was an argument important to trade mark law and one where it was conceded that no further evidence would have been relied upon had the argument been pursued at trial. 36 In the present appeal, if the s 91R(3) argument is to be pursued, no further evidence is required to be adduced on appeal. But, and whatever other difficulties would otherwise have been confronted, a fundamental difficulty is that the argument is one without substance. This provision, it has been said, " suffers from a lack of clarity ": SZJGV v Minister for Immigration and Citizenship [2008] FCAFC 105 at [10] , [2008] FCAFC 105 ; 102 ALD 226 at 231 per Spender, Edmonds and Tracey JJ. 38 The contention sought to be raised concerns the fact that the Tribunal correctly concluded that the Appellant's conduct in attending the Ahmadi mosque in Australia was to be disregarded. I consider, therefore, that his conduct in attending the Ahmadi mosque here is to be disregarded in accordance with subsection 91R(3) of the Act. Such a " perception ", it was contended, could only have been founded upon the Appellant's attendance at the mosque. 40 Why the source of the Tribunal's " perception " could only have been the attendance at the mosque was not satisfactorily explained. The perception may well have been founded upon the Tribunal's assessment as to whether the now Appellant was indeed " a witness of truth ". In the face of the Tribunal's assurance that it disregarded the Appellant's attendance at the mosque, there is no reason to question that assurance. 41 Leave to raise this additional Ground of Appeal is refused and, even if leave had been granted, the Ground itself would have been dismissed. The appeal be allowed. 2. The orders of Scarlett FM in the Federal Magistrates Court of Australia on 18 June 2008 be set aside. 3. An order in the nature of a writ of certiorari quashing the decision of the Second Respondent. 4. An order in the nature of a writ of prohibition prohibiting the First Respondent from acting upon, giving effect to, or proceeding further on the basis of the decision of the Second Respondent. 5. The matter be remitted to the Second Respondent to be determined according to law. 6. The First Respondent is to pay the Appellant's costs of the proceeding before Scarlett FM and of this appeal. 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. | application to raise ground of appeal abandoned below jurisdiction or discretion role of appellate court to correct error public law need for timely decisions certificates filed by appellant inquiry initiated by tribunal unearthed opposing evidence certificates said to be " fake & forged " further inquiry required appeal allowed migration |
The application before the Federal Magistrate sought judicial review of a decision of the Refugee Review Tribunal (the Tribunal) signed on 29 June 2005 and handed down on 22 July 2005. The Tribunal affirmed a decision of a delegate of the first respondent to refuse to grant a protection (class XA) visa to the appellant. 2 The appellant filed an application for extension of time to file and serve a notice of appeal on 13 February 2007, attaching an affidavit in which the appellant asserts that he had miscalculated the 21 day timeframe for the lodging of an appeal. An extension of time was granted to the appellant pursuant to orders dated 20 March 2007. He claimed to have been actively involved in the Bangladesh Chatra League (the BCL) which was the student wing of the Bangladesh Awami League. During the 2000 elections, the appellant claimed to have been threatened by a breakaway faction of the BCL as well as supporters of the opposition Bangladesh National Party (the BNP). The appellant claims that he and his family received threats and he was advised to leave the country for his own safety. 4 The appellant first arrived in Australia in 2001, travelling on a student visa. In 2003, he returned to Bangladesh and claims to have been subjected to attacks from his political opponents. He said he only partially reported these attacks to the authorities because of corruption within the police force. While in Bangladesh, the appellant claims to have been made aware of three separate warrants for his arrest and subsequently returned to Australia out of fear from further persecution and adverse treatment upon his return to Bangladesh. The Tribunal asked the applicant what he was sued for. He stated someone was killed in his area and he was blamed so he was not in his area for two or three months. When he came back he saw the students were collecting money from the people and threatening them. The Tribunal asked the applicant what happened with the BNP and them wanting to sue him. He stated the upper level politicians influenced the police not to take any action. The Tribunal asked the applicant why he had not mentioned this before the hearing. The applicant stated he provided the arrest warrants. The Tribunal noted that he had never stated that these arrest warrants were in relation to the BNP suing him. ... The Tribunal noted he had not stated before the hearing that these arrest warrants were issued at the end 1998 or beginning of 1999 by the BNP who were accusing him of killing someone, despite the fact that these were important facts. It also put to the applicant it had some serious doubts about the incident in 1998 when the BNP accused him of murder given he had not raised this before the hearing. The Tribunal put to the applicant being accused of murder and having an arrest warrant issued against him was very serious however he had not mentioned this in his statements to either the Department or the Tribunal therefore it had some reservations about the veracity of this claim. The applicant stated he did not think he had to explain all the issues against him. He just gave all the papers. The Tribunal noted he had only claimed he was pressured by the BNP and not that he had been accused of murder, which was a significant thing. The applicant stated he was not actually guilty of what was in those warrants. They were issued in order to harass him. The Tribunal put to the applicant it understood that but the fact was he was accused of killing one of the BNP's people yet he had not mentioned it until today. He had also claimed it was the reason why the BNP were still interested in him and had the army and police pursuing him. The applicant stated it was not only for that reason. There were many clashes between his party and the BNP. It accepted that in 1999 the applicant and the President of the Mirpur Dhaka branch of the BCL disagreed about the direction the Awami League was taking in relation to gaining support for the upcoming election. It accepted that from 2000 the applicant again made his opposition known to the Awami League's actions of using the BCL to collect money and threaten people to support it. It accepted his actions may have led to him being forced out of his position in the BCL and being asked to leave the party. However, it did not accept that any attempt had been made on his life. It also did not accept that the appellant was of any interest to either the Awami League or the BNP after he left the party and it rejected assertions that he was pursued by authorities on the basis of his political opinions. In particular, the Tribunal noted inconsistencies in the appellant's evidence, including contrasts between his original application where he claimed to have been 'in pressure' from political opponents and his later claims at the Tribunal hearing which included that he had been accused of murder and was wanted by authorities. It does not accept that the BNP sued him for killing someone at the end of 1998 or beginning of 1999. The Tribunal notes the applicant only made this very significant claim for the first time at the hearing. The Tribunal does not accept the applicant would have failed to raise this claim at an earlier stage, given its importance, if it had occurred. It notes all the applicant had previously claimed was that the BNP had put pressure on him, as well as the Awami League. The Tribunal finds being accused of murder and having a warrant issued for your arrest is considerably more serious than having pressure on him. Although the applicant explained he had provided the arrest warrants, the Tribunal notes that he never stated what these arrest warrants were related or [sic] or who had been responsible for their existence. Given the lateness of this claim, the Tribunal does not accept the applicant was sued by the BNP for killing someone in 1998 or 1999. It therefore does not accept he had to go into hiding for a couple of months as a result of the warrant for his arrest or that any upper level politicians of the Awami League influenced the police not to take any action. The Tribunal is satisfied the three arrests warrants are not legitimate on the basis that all three documents have no dates recorded on them anywhere. The Tribunal has no idea when these alleged arrest warrants were actually executed given that there is no date provided. It does not accept that any court in Bangladesh would issue a warrant for the arrest of someone without recording at the very least the date on which the warrant was made. Therefore, on the face of these documents, the Tribunal does not accept that these warrants are credible. The Tribunal concluded that the appellant did not show a well-founded fear of persecution now or in the reasonably foreseeable future should he return to Bangladesh. It was whether the Tribunal had failed to give to the applicant - as required by s 424A of the Migration Act 1958 (Cth) (the Act) - particulars of the reason, or part of the reason, for affirming the decision under review, namely, that there was an inconsistency between the statement of the appellant with his protection visa application that the BNP had put pressure upon him and his information to the Tribunal that such pressure arose from him being sued by the BNP for murder. In particular, this required his Honour to consider whether the failure to mention the murder charge in the appellant's original application and then to have it raised at the Tribunal hearing amounted to 'information' that is required to be made available for comment pursuant to s 424A of the Act. That section does not apply to information 'that the applicant gave for the purpose of the application' (the reference to application being understood as a reference to the application to the Tribunal for review as opposed to the original application for a protection visa: see SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 and s 424A(3)(b)). The other issue before his Honour was therefore whether this exception was applicable on the facts. 9 In relation to the first issue, whether the failure to mention the nature of the murder charge in the protection visa application constituted 'information', the Federal Magistrate regarded the issue as not assisting the appellant because it was beyond doubt that the information in the original application had been adopted so that the exception in s 424A(3) of the Act was applicable if s 424A had been engaged. It appears on pages 129---135 of the Court Book (CB). There can be no doubt that the statement attached to the printed form of the application appearing at pages 133---135 is part of the applicant's application to the Tribunal. I want your kind reconsideration about all my papers submitted and the circumstances provided below that made me to apply RRT. In the second letter I specifically mentioned my position and provided corroboration evidence as asked by the Department of Multicultural and Indigenous Affairs. That statement is the one that makes reference to him being " in pressure from both my party and the opposition " and the one used by the Tribunal to highlight the apparent inconsistency going to credit between the original protection visa application and the evidence given by the applicant at the Tribunal. That document refers to the issue of the three warrants, without it specifying the warrants were issued (or at least one of them) in respect of him being sued for murder. Specifically, the appellant asserts that the Tribunal was obligated to provide him with particulars as to how information contained in his visa application regarding statements that the BNP had placed pressure on him, was to be used in the Tribunal's decision making process. The appellant argues that this information was wrongly classified by the Federal Magistrate as information falling within the exception contained in s 424A(3)(b). That is supplemented by other briefer passages to similar effect. The appellant submits that the paragraph betokens jurisdictional error as being identical to the impugned reasoning in SZECF v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 89 ALD 242 at [26]-[28]-[30] and [34]; SZDKK v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1203 at [25] - [25] ; SZEEU [2006] FCAFC 2 ; 150 FCR 214 per Weinberg J at [158] and Allsop J at [220]-[221]; SXSB v Minister for Immigration and Citizenship [2007] FCA 319 at [19] ; NBKS v Minister for Immigration and Multicultural Affairs [2006] FCAFC 174 ; (2006) 156 FCR 205 at [32] - [39] per Weinberg J at [74] per Allsop J; SZGGT V Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 435 at [72] ; SZGDB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 431 at [25] - [26] and SZCNP v Minister for Immigration and Multicultural Affairs [2006] FCA 1140 at [17] . To the extent that cases such as MZWPK v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1256 at [14] and SZEKY v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1138 at [19] - [23] say as much, in my respectful view, they limit too narrowly the operation of the section. That, of course, is one way that the information is a part of the reason. Another would be the inconsistency between the information and what was now being said. If the Tribunal considers that inconsistency relevant to the assessment of the claims, it may be that the information would be part of the reason. If a Tribunal says that it does not believe an applicant for reasons that can be seen to include the fact that one thing was said in the prior statement and another at the hearing, or the fact that if what is now being asserted at the hearing is true it would have been in the prior statement in that form, the information would be part of the reason. The information is the knowledge imparted to the Tribunal of a prior statement in a particular form. The significance given to it by considering it in the light of evidence is the product of mental processes. This significance and those mental processes are not information, but rather, are why the information is relevant for s 424A(1)(b). It is only when that information is part of the reason for the decision that it engages the section: [29]. Reference was made to [32]-[39] where Weinberg J canvassed decisions to support the proposition that there is no uniformity in the case law on whether the term 'information' in s 424A of the Act is confined to positive statements of fact or whether it can encompass omissions. He concluded that each case must depend upon its own particular circumstances, there being no reason in principle why an omission which is plainly adverse to an applicant's case should be treated any differently than a positive statement. Allsop J accepted the same position at [74]. At the same time, the weight of authority indicates that artificial distinctions should not be drawn between information that is provided by an applicant in the course of his evidence in chief rather than in answer to questions posed by the Tribunal. The appellant contends when this is done there was no affirmation of specific facts nor active affirmation of the accuracy of what was advanced in the primary application. 16 In support the appellant's submissions canvas a number of decisions, to which reference will be made in large part in the reasoning below. The first was by republication and the second by adoption. 18 As to republication, the first respondent contends that republication occurred by way of the statement which accompanied the application to the Tribunal for review. That was a statement of the appellant in which he stated 'so I was in pressure from both of my party and the opposition'. Later at AB133 the appellant stated in his letter to the Tribunal seeking review 'I want your kind reconsideration about all my papers submitted and the circumstances provided below that made me to apply RRT'. It is submitted that his Honour was correct to find that this statement was an effective restatement. 19 Authority for this is sought firstly in the reasoning of Rares J in SZGGT [2006] FCA 435. The precise terms in which the republication was said to have taken place are not set out in his Honour's judgment. Each case will obviously depend on its own facts. Of course, there will be cases where the applicant puts forward everything in the departmental file provided originally by him or her to the delegate. But such a result flows from the facts of the individual case. If the Parliament had intended otherwise it would have been easy to make the natural exception in s 424A(3) of the material which the applicant provided to the Minister originally and then to provide, as is now discretely provided in s 424A(3)(b) , for other information. Because the Parliament has identified the elements integral to a fair procedure of review in the way in which Division 4 of Part 7 of the Act provides, I do not think it appropriate to add glosses to that or to provide easy means for avoiding consequences which may be inconvenient in the construction of the provision. For republication to thus occur, it is said by the first respondent that there is no distinction to be drawn between a physical handing up of the previously published material and a mere submission: cf M55 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 131. 21 Additionally the first respondent submits that support for the objective approach favoured by Rares J is to be found in other single judge decisions in VWBF v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 851 ; (2006) 154 FCR 302 at [44] per Heerey J; SZCNP [2006] FCA 1140 at [18] per Tamberlin J; and SZDAP v Minister for Immigration and Multicultural Affairs [2006] FCA 1598 at [22] per Middleton J. 22 As a further and alternative contention the first respondent argues that it is open to the Court to find that information was adopted by way of oral evidence and argument provided at the hearing. It is submitted that the issue is to be judged on whether the review applicant can be said, on the basis of the material before the Court, to have been aware of the information and with that awareness to have affirmed the information. This proposition is said to find support in SZEEU [2006] FCAFC 2 ; 150 FCR 214 and NBKT [2006] FCAFC 195 ; 156 FCR 419. 23 The starting point of the facts which the first respondent contends would have supported a finding of adoption is the claim made by the appellant before the Tribunal in which he claimed for the first time that the pressure was experienced as a consequence of his having been sued for murder. He just gave all the papers. 24 Based on this, the first respondent contends the appellant should be understood as affirming the information so that, consistently with the adoption line of authorities, the application of s 424A(3)(b) was attracted. Additionally I accept that without the application of the exception in s 424A(3)(b) , the Tribunal would have been in jurisdictional error in the critical passage of its reasons unless it had complied with s 424A(1)(c) and invited the applicant to comment on it. 26 On the issue of republication and adoption, there is a 'blizzard of cases': VWBF [2006] FCA 851 ; 154 FCR 302 at [23] per Heerey J. It is necessary, in the light of the facts in this appeal, to distinguish and put to one side generally those cases raising the issue of whether information has been given for the purpose of the application to the Tribunal where the information has been elicited as the consequence of a question from the Tribunal to an applicant. Of more relevance here on their facts are those cases where the applicant has expressly advanced information that had been initially given to the Department as part of the case on review to the Tribunal. In drawing this distinction in MZXFQ v Minister for Immigration and Citizenship [2007] FCA 826 Kenny J cited as illustrative of this latter category M55 [2005] FCA 131 at [25] per Gray J; VUAV v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1271 at [11] per Merkel J; SZGGT [2006] FCA 435 at [24] and [50] per Rares J; SZCKD v Minster for Immigration and Multicultural Affairs [2006] FCA 451 at [37] per Graham J; VWBF [2006] FCA 851 ; 154 FCR 302 at 312 per Heerey J; and SZCBQ v Minister for Immigration and Multicultural Affairs [2006] FCA 1538 at [12] per Bennett J. As her Honour stated, in these cases s 424A(3)(b) was held to apply. Examination of the manner of giving in each of them may be instructive in relation to the effect of the words used by the appellant. 27 In M55 [2005] FCA 131 the applicant's barrister had forwarded a written submission to the Tribunal prior to the hearing of the application for review. That stated that the applicant's claims were set out in a detailed statement to the Department, an interview and in the application for a protection visa. Gray J found that the applicant thereby invited reference to these materials so that it could be concluded the information (deriving from a copy passport in the materials) had been given to the Tribunal. In VUAV [2005] FCA 1271 the applicant had stated in his application to the Tribunal 'please refer to my previous statement for further information', which was accepted as being a reference to his visa application. In SZGGT [2006] FCA 435 the applicant for review had written that he had given full explanations in his previous statement and that certain matters were as he had explained before. However, this left undetermined the extent of the incorporation by reference and, adopting the objective approach referred to above, Rares J held the incorporation extended only to what had been said to the Department about his activities in China and not the whole of the information which had been given to it contained in the file. In SZCKD [2006] FCA 451 the information had been provided to the Tribunal by the applicant's agent in a 31 page facsimile including a number of other documents. In VWBF [2006] FCA 851 ; 154 FCR 302 the information in question was advanced on behalf of the applicant in a letter from his migration agent which stated that the applicant had already sent a statement to the Tribunal and requesting reference to a number of earlier statements and interviews. In SZCBQ [2006] FCA 1538 the applicant had stated in his application to the Tribunal 'Please Refer my Statement Claim of my Refugee Application'. I am unable to distinguish from this variety of language found to have effect as a giving for the purpose of s 424A(3)(b) from the language used by the present appellant. He expressly invited reconsideration about all his papers submitted. 28 Examination of the language on its own does not lead to any different conclusion. On application of the appellant's own test, the form of words used by an applicant can be construed as an express request to consider all the claims of the applicant put forward before the delegate and to amount to an explicit affirmation of those claims. The words request 'reconsideration about all my papers submitted'. Point 1 in the words used asserts the information provided was creditable. 29 The appellant asserts that the bare reference to 'the first application' and 'the letter' are insufficient to bring the exception in s 424A(3)(b) into play. This is a matter to be judged in the circumstances. Those circumstances include a preceding reference to a reconsideration 'about all my papers submitted and the circumstances provided below that made me to apply' to the Tribunal. Those words are themselves sufficient to bring into application the exception and the later reference to the first application and the letter must be construed within that context. There may be good reasons for requiring that the applicant affirm or actively give specific "information" for the purposes of the review, in order for the exemption in s 424A(3)(b) to apply. Both SZEEU [2006] FCAFC 2 ; 150 FCR 214 and NAZY 87 ALD 357 suggest that the exception may not apply where the appellant does no more than affirm the accuracy of a statement which contains many diverse pieces of information. In one of the five appeals considered in SZEEU [2006] FCAFC 2 ; 150 FCR 214, SZBMI , the appellant's protection visa application attached a written statement in which the appellant explained in some detail the circumstances in which he had fled overseas from Bangladesh ("the flight information"). Before the Tribunal, the appellate confirmed that he had read his earlier statement before signing it and that it contained true and correct information. This evidence founded a submission that the flight information had been adopted at the hearing before the Tribunal and consequently fell within the exception in s 424A(3)(b). Moore J did not accept that this evidence transformed the flight information into information that the appellant had provided to the Tribunal in his application for review. His Honour added that, in his opinion, the approach of Jacobson J in NAZY 87 ALD 357 was correct. Weinberg J said ( SZEEU [2006] FCAFC 2 ; 150 FCR 214 at [157] ) that the adoption of the earlier statement by the appellant did not render it information provided by him in his application for review. Allsop J agreed with Moore J that the flight information fell within s 424A(1). His Honour did not expressly address the exception in s 424A(3)(b): SZEEU [2006] FCAFC 2 ; 150 FCR 214 at [219] . Subsequently, the applicant stated in his application to the Tribunal that he had been convicted of an offence in India. In the course of the hearing, the Tribunal asked the applicant who had completed the protection visa application for him in English, as he was not fluent in English. The applicant said that a friend had completed it for him. Later, the Tribunal asked the applicant to explain the inconsistency between the statement in the protection visa application and his subsequent statement that he had been convicted of an offence. The applicant's response was that the inconsistency was as a result of a translation. In these circumstances, it is not difficult to understand Jacobson J's conclusion ( NAZY 87 ALD 357 at [39]) that it cannot be said that the appellant provided the information in the protection visa to the Tribunal as part of his application. It is, however, another step to accept the general proposition that information given in the course of a Tribunal hearing must be put forward in chief before it can fall within the exception in s 424A(3)(b). In the first place the appellant in NBKT [2006] FCAFC 195 ; 156 FCR 419 relied 'heavily' on NAZY 87 ALD 357 at [48]. In NAZY 87 ALD 357 the Court held that the exemption in s 424A(3)(b) applies to information from a protection visa application which an applicant for review expressly adopts and puts forward as part of his or her application for review. He also held that information provided by an applicant during questioning by the Tribunal member in the course of a hearing does not fall within the scope of s 424A(3)(b) and that the mere adoption of an earlier statement at the hearing before the Tribunal does not render it information given by the applicant for the purposes of the review. What the Tribunal did was to note what the appellant said in the written statement made at the time he applied for a protection visa. The Tribunal thereby gained knowledge of what the appellant had said at that time about his experiences in Bangladesh. It was knowledge used by the Tribunal in assessing the credibility of the appellant and assessing the veracity of the account given by the appellant to the Tribunal. I do not accept that, by adopting the statement at the hearing before the Tribunal, that information was transformed into information provided by the appellant in his application for review. In my opinion, the approach of Jacobson J in NAZY v Minister for Immigration and Multicultural and Indigenous Affairs was correct. If the Tribunal comes to know of what was said by an applicant at a point before any application for review was made, and views what was said at that time as material to its assessment of what was later said by an applicant, then the mere adoption of the earlier statement during the review process would not result in the knowledge (and relevantly information in the present appeal) being comprehended by s 424A(3)(b). 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. 32 Returning to [59] in NBKT [2006] FCAFC 195 ; 156 FCR 419 it is apparent that Young J was drawing on authority relevant to instances of information being elicited during the hearing before the Tribunal, which is not this case. Young J at [62] accepted that the information in NBKT [2006] FCAFC 195 ; 156 FCR 419 given by way of written submission from her advisor was given for the purposes of s 424A(3)(b) , applying VWBF [2006] FCA 851 ; 154 FCR 302 at [51] . 33 Furthermore, as was stated by Young J in NBKT [2006] FCAFC 195 ; 156 FCR 419 at the commencement of [59], the authorities 'highlight the importance of giving careful consideration to the nature of the information that is said to fall within s 424A(3)(b) and the circumstances in which it is communicated to, or elicited by, the Tribunal'. Applying that approach I do not consider the decision reached by his Honour can be said to be in error. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | application for protection visa appeal from federal magistrate whether tribunal failed to comply with statutory obligation to give appellant information whether information was within exception to obligation whether appellant had given information to the tribunal migration |
The appellants are a husband and wife and their child. The adult appellants were born in Sierra Leone and arrived in Australia in February 2008. Shortly afterwards they applied to the Minister for Immigration and Citizenship for protection visas, which is the visa which may be granted to a person if the Minister is satisfied that he or she is owed protection obligations by Australia under the Convention Relating to the Status of Refugees done at Geneva on 28 July 1951, as amended by the Protocol relating to the Status of Refugees done in New York on 31 January 1967. Their application for that visa was dealt with by a delegate of the Minister who, on 16 June 2008, determined to refuse it. The appellants, as was their right, then sought a review of that decision before the Refugee Review Tribunal ("the Tribunal"). The Tribunal reviewed the delegate's decision on 2 September 2008 and concluded that it should be affirmed. Undeterred, the appellants sought judicial review of the Tribunal's decision in the Federal Magistrates Court. A number of grounds were advanced in that Court, however, only two remain relevant to the issues which arise in this Court. The appellants had argued that they had a well founded fear of persecution in Sierra Leone because of their support for a political party known as the Sierra Leone Peoples Party ("the SLPP"), as well as their support for the former president of Sierra Leone, a Mr Kabbah. The appellants left Sierra Leone in 1999 during a brutal civil war which, as the delegate found, lasted from 1991 to 2002, killed 20,000 people, left thousand of others maimed and ultimately resulted in the displacement of half the population. Of course, that was sometime ago and the critical issue was, in substance, what would occur if the appellants were to return to Sierra Leone in 2008. No doubt to that end, the solicitor acting for the appellants sent a detailed written submission to the Tribunal on 1 August 2008. It touched upon a number of topics. Relevantly, for present purposes, it contained quotations from an article entitled "Sierra Leone: Political Violence Rife in Kono" which was published on the allafrica.com website on 2 July 2008. That article documented persecution and harassment of SLPP members by operatives of another political party known as the APC. Included in the allegations in the article were accounts of violent assault, property damage and mob violence against various SLPP members. That article was dated 2 July 2008 and hence was issued a few weeks before the submission on behalf of the appellants was lodged with the Tribunal on 1 August 2008. The Tribunal conducted a hearing on 6 August 2008. In that letter the Tribunal indicated that it accepted there had been violence at the time of the presidential elections in 2007, however, it made no reference to the material in the letter of 1 August 2008 which suggested violence against SLPP members in July 2008. The Tribunal accepts that problems remain in Sierra Leone, as referred to in your representatives' submission to the Tribunal dated 1 August 2008, in particular severe youth unemployment and a lack of basic services. However, as discussed at the hearing on 6 August 2008, what the Tribunal has to look at is whether there is a real chance that you or your wife or your son will be persecuted for one or more of the five Convention reasons if you return to Sierra Leone now or in the reasonably foreseeable future. So far as your and your wife's claims based on your real or imputed political opinion in favour of the SLPP and the former president, Tejan Kabbah, are concerned, as discussed at the hearing on 6 August 2008 the Tribunal accepts there was violence at the time of the parliamentary and presidential elections in Sierra Leone in 2007. However the information available to the Tribunal suggests that the polls themselves were generally free and fair and that the police and the army acted professionally to put a stop to violence generated by all sides (Human Rights Watch, World Report 2008 (relating to events of 2007) in relation to Sierra Leone, copy attached). As the Tribunal put to you and your wife, this information is relevant to the review because it makes it difficult for the Tribunal to accept that there is a real chance that you or your wife or your son will be persecuted for reasons of your real or imputed political opinion in favour of the SLPP and the former president, Tejan Kabbah, if you return to Sierra Leone now or in the reasonably foreseeable future. In any event, the Tribunal afforded the appellants the opportunity to make further submissions by 26 August 2008 which the appellants took up. On 25 August 2008, the appellants put on a further affidavit. That affidavit made reference to matters suggesting oppression in Sierra Leone but did not point out that the Tribunal appeared to have overlooked the article of 2 July 2008. ` Pausing there, it might neutrally be said that the Tribunal had not appreciated that the article of 2 July 2008 suggested violence in 2008 --- this much was clear from its letter of 12 August 2008 --- and that the appellants (or their solicitors) had, in turn, overlooked the Tribunal's own inadvertence. Such a state of affairs was bound to lead to confusion. I consider that, if supporters of the SLPP or the former president had been being attacked, prosecuted or killed by the present government, the present ruling party, the APC, or its supporters following the change of government in 2007, the SLPP would have drawn attention to this . An allied submission was that the Tribunal had denied the appellants procedural fairness by failing to indicate to them that it was going to disregard the evidence of the article of 2 July 2008. The Federal Magistrate was persuaded that the core issue was whether there was violence during the 2007 elections. His Honour then reasoned the case was one where the Tribunal had failed "to point out to them all of the weaknesses in their case" which did not, without more, involve a breach of the rules of procedural fairness. In my opinion, the learned Magistrate has erred in his approach to the Tribunal's review. The issue was not whether there was violence during the 2007 elections. The issue was whether the appellants faced persecution in 2008 if they were to return to Sierra Leone. The Tribunal's process of reasoning in that regard was, in my opinion, wholly unsatisfactory. I have emphasised various portions of the quotation set out above from its reasons. Proposition (a) is wrong. There was before the Tribunal the article of 2 July 2008 to which reference has already been made which precisely contained the allegation that, as at July 2008, members of the SLPP were being attacked by members of the APC. The Tribunal in fact rejected that evidence on the basis that the claims were not made by the SLPP itself (ie. Proposition (c)). It is difficult to reconcile that statement with Proposition (b) (which referred to claims by the SLPP) but it is not necessary to decide the matter on that basis. In effect, the Tribunal has rejected as untrue the account contained in the article because of the absence of a corroborating claim made by the SLPP to the same effect. The appellants were not afforded the opportunity to make any submission about this reasoning, such as it is. They were not told that the article of 2 July 2008 was to be treated as being untrue. They were not informed that their case was to fail because they had not provided proof from the SLPP itself that its members were being attacked in July 2008. This was not some peripheral issue; it was the central question debated before the Tribunal. It is true, as the Minister submitted, that the Tribunal had given the appellants an opportunity to establish that they might be subject to violence if they returned to Sierra Leone. That opportunity was given both at the hearing on 6 August 2008 and subsequently again by means of the letter sent to the appellants on 12 August 2008. On both occasions the Tribunal signalled that it did not think that the appellants had established that they faced risk if they returned. What the Tribunal did not say was that it was proposing to reject the only evidence on the topic of violence in June/July 2008 on the basis of the Tribunal's own surmise that that evidence must be wrong because if it were to be right then the SLPP would itself have complained. The critical step in that reasoning is the conclusion that the SLPP had not complained about violence in June 2008, a matter which the Tribunal inferred from the absence of any evidence to that effect. It follows that the Tribunal regarded the absence of evidence about the SLPP's complaints as to violence against its members in June/July 2008 as a critical issue. In fact, as its reasoning shows, it was the determinative matter in the Tribunal's consideration. It is true that the Tribunal was not obliged to point out the weaknesses in an appellants' case to them. I would not, however, regard that principle as being in any way apposite to the present appeal. Here what the Tribunal did was to reject uncontradicted third party material on the basis of an assumption --- itself unproven before the Tribunal --- that there had been no complaint by the SLPP. That the Tribunal committed the fallacy of confusing the absence of evidence with that evidence of absence is, in the present context, besides the point although it can hardly be calculated to increase one's sense of confidence in the correctness of the outcome. Rather, the important matter is that the absence of evidence upon which the Tribunal acted was a direct result of the Tribunal not indicating to the appellants that it would not accept the article of 2 July 2008 unless corroborated by the SLPP. The appellants not being warned in that way took no steps to prove that the SLPP had also raised the matter. To conclude in those circumstances that the article's veracity was to be rejected because it had not been corroborated by the SLPP resulted in a hearing which was unfair, in my opinion, seriously so. The categories of procedural fairness are neither closed nor susceptible of exhaustive definition. One category which is however established is that which obtains when a decision maker decides the case by reference to an issue which the party before it could not be reasonably expected to have anticipated. SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 228 CLR 152 is one such case. There, the Tribunal unaccountably rejected two aspects of an applicant's case which had been accepted by the delegate and which had not been questioned by the Tribunal during its hearing. That was held to be procedurally unfair. I do not think that a different principle can apply here. It follows that there was a denial of procedural fairness. The appeal must be allowed with costs. Sending the letter to him was said to be legally ineffective. The second argument in (b) must fail on the facts. The letter of 12 August 2008 was not only sent to the appellant husband but also to the appellant wife's solicitor who was her authorised representative. By doing so, the letter was taken to have been given to her. As to the first argument in (a), the appellant wife submitted that the Tribunal had failed to give her a chance to provide comments on the passage of legislation in Sierra Leone in 2007 which was said to strengthen the position of women in that country. This mattered because it was used by the Tribunal as a reason for discounting the appellant wife's claim based on persecution of her as a woman of a particular ethnic background. Any obligation to provide that information to her can only have emerged from the operation of s 424A(1). However, the information in question was not specifically about the appellant wife but was instead just about a class of persons of which the second appellant was but a member. Accordingly, it could not be information of the kind at which s 424A(1) is directed: see s 424A(3). The appellant's reliance upon s 424AA is, I think, misconceived. The provision creates no imperative duties; rather, it is an enabling provision which permits the Tribunal, if it wishes, to give particulars at an oral hearing. It has no application to the letter of 12 August 2008. This ground of appeal should be rejected. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. | application for review of decision to refuse protection visas whether denial of procedural fairness in disregarding evidence failure of tribunal to afford right to comment under ss 424aa and 424a migration act 1958 (cth) failure of tribunal to deliver correspondence to appellant migration migration |
Stating the matter very briefly; the University alleged that in 1997 Dr Gray, who was until March 1997 a professor and full-time employee of the University, and who until 1999 was employed by the University on a fractional appointment, assigned to the second respondent (Sirtex), a public company, intellectual property rights in micro sphere technologies used in the treatment of liver cancer. On the public listing of the shares in Sirtex, Dr Gray acquired a large number of shares in Sirtex. The University claims that the micro sphere technologies were developed whilst Dr Gray was employed by the University, that the intellectual property rights in the invention belonged to the University and that, consequently, the shares issued to Dr Gray in Sirtex are held on trust by him for the University. 2 On 17 April 2008, following a trial lasting some 50 days, French J delivered judgment in the proceeding. He dismissed the University's claim. 3 Before the trial Dr Gray had given an undertaking not to deal with his shares in Sirtex. However, the undertaking given by Dr Gray lapsed on the delivery of the judgment in his favour. On 8 May 2008, the University appealed against the judgment of French J. The appeal is listed for hearing in the November 2008 sittings of the Full Court. 4 Since the date of the judgment the solicitors for the University have searched the share register of Sirtex approximately three times a week for the purpose of monitoring any movements in respect of Dr Gray's shareholding. Until 27 August 2008, there was no change in Dr Gray's shareholding in Sirtex. On 27 August 2008, a search of the Sirtex share register revealed that Dr Gray had transferred 16,462,283 shares to ACN 132 442 114 Pty Limited (ACN) --- a company in which Dr Gray owns all the shares and is the sole director. Before the transfer of those shares Dr Gray had a relevant interest in 17,522,283 shares in Sirtex --- comprising the 16,462,283 shares held in his own name and 1,060,000 shares held by companies in which Dr Gray has a relevant interest. 5 On 5 September 2008, the University sought an undertaking from Dr Gray not to dispose of the shares in ACN and the cash proceeds from the sale of the shares to ACN, and an undertaking from ACN not to dispose of the shares in Sirtex. Such undertakings were not forthcoming. This resulted in the University making an application for an interlocutory injunction against Dr Gray and ACN, and an application to amend the originating application by adding a further respondent, namely, ACN and adding claims against ACN arising from the events which occurred on 27 August 2008. The relief sought included a declaration that ACN held the shares on trust for the University and related relief. 6 I deal in this judgment with the University's application to amend the originating application by the addition of ACN and the further claims. Dr Gray and ACN oppose the application on the grounds that no amendment can be made to the originating application to plead the proposed causes of action because final judgment has been delivered. The University contends that O 13 r 2 of the Federal Court Rules (the Rules) contemplates an amendment can be made "at any stage of any proceeding" and this includes after the final judgment. 7 There have been occasions when courts have permitted amendments to be made to an originating process or statement of claim after judgment, or after reasons for judgment had been delivered. 8 Thus, in the case of Singh (Santosh Kumari) v Atombrook Ltd (trading as Sterling Travel) [1989] 1 WLR 810, the Court of Appeal permitted an amendment to be made changing the name of a party after final judgment. 9 In the case of FF Seeley Nominees Pty Ltd v El Ar Initiations (UK) Ltd (No 2) (1990) 55 SASR 314 , Zelling AJ permitted a plaintiff to amend its statement of claim after he had delivered reasons for judgment on the basis that the statement of claim may not have been sufficient to ground an order against the second defendant for damages. Zelling AJ rejected the contention that there was a general restriction on the power of courts to allow amendments of pleadings after judgment. 10 Further, in the case of Genocanna Nominees Pty Ltd v Thirsty Point Pty Ltd [2006] FCA 1335 , Lander J gave leave to the applicants to amend their statement of claim after he had delivered reasons for judgment but before the judgment was entered. Lander J said that one of the reasons why he had not entered orders was that he thought it would be appropriate to allow the second applicant and third applicant to consider his reasons in case they wished to make any application to amend their pleadings. It appears that the statement of claim relied upon at the trial needed to be amended in order to accommodate the expert evidence which had been led at trial. Lander J allowed the amendment on the basis that the respondents had always been on notice of the applicants' claim for loss and damage in the manner contemplated by the proposed amendment, that the trial had been conducted on that basis and that justice required that he allow the proposed amendment. 11 Also, it is not uncommon for the Court in the exercise of its appellate jurisdiction to permit an amendment to be made to the pleadings in the course of an appeal. 12 However, in my view, the position in this case is distinguishable from those referred to above. In this case, the proposed amendment seeks to plead, and claim relief in respect of, facts and matters which have occurred after the date of judgment. In each of the cases referred to above, however, the amendments related to events or circumstances which occurred or existed before the judgment or reasons for judgment. Further, as to the amendments of pleadings on appeal, such amendments will generally be allowed only in relation to matters which were litigated at trial. The court is then only formalizing the actuality of the case being made. 13 In my view, O 13 is not to be construed as permitting the amendment of the originating application or pleadings to plead causes of action based on facts and matters which occurred after the date of the judgment. A construction of the Rules which would permit amendment in those circumstances would be inconsistent with the finality principle and the principle that an appeal in this Court is by way of a rehearing directed at correcting error. (See Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 ; (2001) 117 FCR 424 at 432-440. If it were not so the main arena for settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. 14 It follows, that in my view, the process adopted by the University in seeking to obtain relief against ACN in respect of the events of 27 August 2008 by the amendment of the originating application is not permitted by the Rules. The University's application to amend the originating application in terms of the minute filed in Court is dismissed. In light of the fact that I have, pending the appeal, granted interlocutory injunctive relief against Dr Gray and ACN arising from the events of 27 August 2008, I will require the University to commence a separate proceeding against Dr Gray and ACN within 7 days. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | the applicant claimed a beneficial interest in shares held by the first respondent in the second respondent applicant's claim dismissed at trial applicant appealed while the appeal was pending the first respondent transferred shares to a third party whether the applicant may amend its application to include claims based on events which occurred after the judgment in the trial practice and procedure |
The first is the Ngarla application (WAD 6185 of 1998) which was filed by the Ngarla people on 28 July 1997 and comprises a geographic area of some 10,806 square kilometres. The second is the Ngarla #2 application (WAD 77 of 2005) which was filed on 7 April 2005. In that proceeding, the Ngarla people claimed native title over an area west of, and adjacent to, the land of the Ngarla application. The third proceeding is the Njamal #10 application (WAD 6003 of 2000) brought by the Njamal people and filed on 25 May 2000. 2 This is an application for a consent determination of native title rights and interests held by the Ngarla people in respect of land and waters within the Pilbara region of Western Australia that has been designated "Determination Area A". The parties have signed a Minute of Proposed Consent Orders which recognises the native title rights and interests held by the Ngarla people in relation to Determination Area A. They ask the Court to make a determination of native title according to the terms on which they have agreed and to do so without holding a further hearing. 3 Determination Area A comprises part of the land and waters covered by the two Ngarla applications. It also includes areas of overlap with the Njamal #10 application. The balance of the land and waters covered by the Ngarla application and the Ngarla #2 application include areas of geographical overlap with a further proceeding, the Warrarn application (WAD 0082 of 1998). There are also areas the subject of mineral leases. The parties have designated these lands as "Determination Area B". They agree that mediation should continue in relation to Determination Area B and that no determination of native title should presently be made in respect of that area. 4 The parties also agree that some areas within the Ngarla applications have been the subject of acts which have extinguished native title. These areas are outside Determination Area A. The parties ask the Court to declare that they be excluded from the Ngarla applications. 5 I congratulate the parties on the agreement they have reached and acknowledge the efforts of the National Native Title Tribunal in assisting the parties. It means that the parties can decide for themselves how best to institute an arrangement that satisfies their respective rights and interests in a way that, as appropriate, recognises the rights and interests of the other parties'. The nomination is in writing and the Corporation has given its consent to the nomination. I am satisfied that the requirements of the Act and of the Native Title (Prescribed Bodies Corporate) Regulations 1999 (Cth) have been met. 7 The Court may make orders giving effect to an agreement reached between the parties where the agreement relates to the proceeding or part of the proceedings without holding a hearing ' if it appears to [the Court] to be appropriate to do so ' (ss 87(2) and (3) of the Act). The Court may also, if agreement is reached on a proposed determination of native title in relation to an area included in the area covered by an application, make an order in, or consistent with, the proposed determination without holding a hearing if the Court considers it would be appropriate to do so (s 87A(4)(b)). 8 There are, however, certain pre-conditions where a consent determination is made under s 87 or s 87A. The notification periods for the Ngarla #2 application and the Njamal #10 application ended on 9 November 2005 and 17 April 2001, respectively. It follows that the first precondition is satisfied. 10 The second and third preconditions are also satisfied. The agreement is in writing and has been signed on behalf of the parties to the three proceedings in which the determination is to be made. It was filed with the Court on 9 May 2007. 11 As to the fourth precondition, three matters should be noted. The first is that the agreement relates to part of the land and waters the subject of the Ngarla applications. The making of a determination of native title in respect of those parts is a matter that falls within subs 87(3) of the Act. It follows that the Court may make orders determining that native title exists in relation to Determination Area A while leaving the issues outstanding in relation to Determination Area B for resolution at a later date ( Munn (For and on behalf of the Gunggari People) v Queensland [2001] FCA 1229 ; (2001) 115 FCR 109 at [6] ). This approach has been taken in a number of cases in northern Western Australia under s 87 ( Nangkiriny v State of Western Australia [2002] FCA 660 ; (2002) 117 FCR 6; Nangkiriny v Western Australia [2004] FCA 1156 ; James on behalf of the Martu People v State of Western Australia [2002] FCA 1208 ; Hughes ). 12 Secondly, as has been noted, the Njamal #10 application overlaps the land and waters of Determination Area A. The Court may only make one determination of native title for any given area (s 68). If two or more proceedings before the Court cover the same area, the Court must make such order as it considers appropriate to ensure that, to the extent that the applications cover the same area, they are dealt with in the same proceedings (s 67(1)). Orders of that nature were made on 27 March 2007 and the applicant in the Njamal #10 application consents to a determination of native title being made in favour of the Ngarla people in respect of Determination Area A. 13 Thirdly, the proposed orders must set out details of the matters mentioned in s 225 of the Act (s 94A). I am satisfied that they do so. 14 A question has arisen as to the section of the Act under which the power of the Court is to be exercised. Traditionally, the Court has exercised the power to make a consent determination under s 87 of the Act. However, by amendments commencing on 14 April 2007, s 87(1)(d) was inserted. That subsection provides, in effect, that an order cannot be made under s 87 unless the Court is satisfied that an order in, or consistent with, the terms of the agreement reached between the parties cannot be made under s 87A, which was introduced under the same amending Act ( Native Title Amendment Act 2007 (Cth)). While it may not have been contemplated that s 87A should apply where there has been consent by all the parties to the proposed orders it does, in its terms, do so. 15 The Native Title Amendment (Technical Amendments) Bill 2007 (Cth) ('the Bill') proposes that s 87(1)(d) be repealed. The purpose of repealing the subsection is apparently to avoid uncertainty as to when orders can be made pursuant to s 87 (Explanatory Memorandum to the Bill at [1.299]---[1.300]). However, this has not yet occurred. The agreement in respect of Determination Area A in these proceedings comes within that description. 18 Section 87A(1)(c) nominates the parties to such agreement for the section to apply. Parties specified in subss 87A(1)(c)(i) and (ii), (there is no subs (iii)) (iv), (v) and (vi) are all parties to the agreement. The State of Western Australia ('the State') and the Commonwealth of Australia are parties, but neither the Commonwealth Minister nor the State Minister individually are parties. No relevant local government body is a party to the proceedings. Therefore subss 87A(1)(c)(vii), (viii) and (ix) are not applicable. 19 The conditions of subss 87A(2) and (3) have been complied with. All parties within the category of s 87A(1)(c) consent to the orders sought, whether the power is exercised under s 87 or s 87A. All parties with a proprietary interest in Determination Area A have signed the proposed consent orders under s 87A. All parties have signed the proposed consent orders under s 87. 20 Two of the parties represented by Ms Sisto, namely Strelley Pastoral Pty Ltd ('Strelley') and the applicant in the Warrarn proceeding, have consented to the orders sought pursuant to s 87. By force of circumstance, because of the timing of the appreciation of the application of s 87A, Ms Sisto has been unable to obtain instructions in relation to orders made under s 87A from the Warrarn applicants. She informs the Court that the Warrarn applicants do not consent but nor do they oppose the orders being made under s 87A. Further, Ms Sisto has confirmed that neither the Warrarn applicants nor Strelley hold a proprietary interest in Determination Area A. The orders sought under s 87A are the same as those sought under s 87. Counsel for all of the other parties, including the Ngarla applicants and the State are satisfied that neither Strelley nor the applicant in the Warrarn proceeding are persons falling within s 87A(1)(c). 21 No objection has been made that must be considered under s 87A(5). Further, for reasons already given (see [12] and [13] above), the Court has power to make orders in the form proposed (s 87A(4)(a)). Accordingly, I am satisfied that orders may be made under s 87A, subject to consideration of whether it is appropriate to do so. 22 The exercise of the Court's discretion pursuant to s 87A imports the same principles as those applying to the making of a consent determination of native title under s 87. The discretion conferred by s 87A and by s 87 must be exercised judicially and within the broad boundaries ascertained by reference to the subject matter, scope and purpose of the Act ( Hughes at [8] citing Lota Warria (on behalf of the Poruma and Masig Peoples) v Queensland (2005) 223 ALR 62 at [7]). 23 Justice North observed in Ward v State of Western Australia [2006] FCA 1848 at [6] ---[9] that the Act is designed to encourage parties to take responsibility for the resolution of native title proceedings, without the need for litigation. The Court's power must be exercised flexibly and with this purpose in mind. Orders may be made where the Court is not provided with all of the evidence or the primary facts substantiating native title where the Court is satisfied that the parties have freely and on an informed basis come to an agreement ( Hughes at [9]). 24 If, of course, an agreement were reached where there was nothing to support the claimed connection of the applicants to their country, or the determination appeared to be unfair or unjust, the Court might conclude that a determination would be inappropriate and decline to make the orders sought ( James at [4]). That is not the case here. 25 The continuous connection of the Ngarla people with Determination Area A is acknowledged by all of the parties. There is also evidence to support that connection. The Ngarla Native Title Claim Connection Report ('the Report'), prepared by Dr Nicholas Smith, describes the traditional and enduring connection of the Ngarla people to their country within the claim area. They share a distinctive Ngarla identity, a distinct language, and a distinct law and kinship system. They have a contemporary attachment to the land and waters and continue to use the land and waters for subsistence practices. Those practices have been somewhat modified over time in a way that can be traced to practices utilised by their ancestors. However, as the authors of the Report note at 142, '[i] t stands to reason that claimants no longer live in exactly the same manner as their ancestors did prior to European settlement; and it would be unrealistic to expect them to do so '. The Report concludes that the testimony and evidence indicate that, despite the impact of colonisation, Ngarla people maintain a physical and spiritual connection with their homelands and have continued to do so (at 247). 26 The Report describes how the Ngarla people, a compact claimant group, identify as belonging to the wider regional cluster of Pilbara Aboriginal peoples but are distinct (at 9). There are criteria by which individuals identify and are identified as Ngarla (at 10-11). The most recognisable feature of Ngarla membership is knowledge of Ngarla country and its resources (at 35). Many of the claimants have an extraordinary detailed knowledge of Ngarla country. The adults devote time in passing on this knowledge and in this way Ngarla traditions are reinforced and transmitted. The claimants' self-identification is grounded and perpetuated in a range of customary beliefs and practices, namely law, language and kinship (at 37). 27 The State has had regard to the Report in connection with other written and audiovisual material provided by the applicants. It commissioned an independent anthropologist to review that material. I am informed that the State, which represents the community generally, has had regard to the requirements of the Act and has satisfied itself ' through a rigorous and detailed assessment process ' that the determination is justified in all the circumstances. 28 Apart from Ngarla and Njamal peoples, other indigenous interests are represented by the Yamatji Marlpa Barna Baba Maaja Aboriginal Corporation and the Nomads Charitable and Educational Foundation. Fishing, mining, pastoral, pearling, shell collecting and telecommunication interests are also represented and agree upon the orders sought. The parties are all legally represented. 29 I am satisfied that it is appropriate to make the proposed orders and declaration in the terms sought by the parties. I do so pursuant to s 87A of the Act, or in the alternative pursuant to s 87 of the Act. I make orders in accordance with the agreement reached by the parties. That includes an order that the Corporation is to hold the determined native title in trust for the native title holders pursuant to s 56(2) of the Act. 30 The parties acknowledge that the effect of the making of the determination is that the members of the native title claim group, in accordance with traditional laws acknowledged and the traditional customs observed by them, should be recognised as the native title holders for Determination Area A. The order that the Court will now make determines, under the laws of Australia, that native title exists according to the traditional laws and customs of the Ngarla people and that native title is held by those people. The order does not grant native title; it recognises what has long been held. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. Native title exists in relation to that part of Determination Area A which is landward of the lowest astronomical tide of the mainland coast in the manner set out in paragraph 5 of this determination. 3. Native title does not exist in relation to that part of Determination Area A which comprises land and waters seaward of the lowest astronomical tide of the mainland coast, as shown on the maps at Attachment 1 to the First Schedule. 4. The native title rights and interests are held in trust by the Wanparta Aboriginal Corporation, a prescribed body corporate for the purposes of section 56 of the Native Title Act 1993 (Cth), for the Ngarla people as common law holders of native title. The Ngarla people are described in the Fifth Schedule. 5. Notwithstanding anything in this determination the native title rights and interests include the right to take and use ochre to the extent that ochre is not a mineral pursuant to the Mining Act 1904 (WA), but not other minerals and petroleum as defined in the Mining Act 1904 (WA), Mining Act 1978 (WA), the Petroleum Act 1936 (WA) and the Petroleum Act 1967 (WA). 7. Sections 47A and 47B of the Native Title Act 1993 (Cth) apply to disregard any prior extinguishment in relation to the areas described in the Sixth Schedule. 8. The native title rights and interests are subject to and exercisable in accordance with the laws of the State and the Commonwealth including the common law. 9. The nature and extent of other rights and interests in relation to Determination Area A in existence at the date of this determination are those set out in the Fourth Schedule. 10. "Determination Area B" means the land and waters described in the Second Schedule and depicted on the maps at Attachment 1 to the First Schedule. In the event of any inconsistency between the written description of an area in this determination and the area as depicted on the maps at Attachment 1 to the First Schedule, the written description prevails. Exclusion --- Excludes any land and waters covered by Reserve 38564 that fall within the external boundary. 4274 (with a width of 20.12 metres) dedicated pursuant to the Roads Districts Act Amendment Act 1932 (WA) and marked on Plan No. 18421. The boundaries of the Site, by reference to the station mark, are 24.10 metres north east by 41.24 metres south by 20.97 metres west by 29.35 metres north. 4. (c) The agreement as amended and ratified by the Leslie Solar Salt Industry Agreement Act 1966 (WA) and rights and interests comprised in, conferred under or in accordance with or pursuant to that agreement. 6. (b) Rights and interests held by reason of the force and operation of the laws of the State or of the Commonwealth. (g) Rights of any person to access and enjoy (subject to the laws of the State) any existing roads within Determination Area A where members of the public have access to such roads according to the common law. (ii) Nothing in paragraph (h)(i) above allows any upgrade, extension, widening or other improvement to the road or track in reasonable repair or where a road or track is rehabilitated, the later reinstatement of the road or track to substantially the same condition as prior to the rehabilitation. (i) Nothing in paragraphs (g) and (h) will limit the rights of the holders from time to time of mining tenements, petroleum interests or other interests granted under a law of the State or Commonwealth, including without limitation any right to exclude members of the public from entering onto the land and waters the subject of any mining tenements, petroleum interests or other interests. | consent determination of native title whether determination should be made pursuant to s 87 or s 87a of the native title act 1993 (cth) statutory preconditions of s 87a and s 87 satisfied appropriate to make the orders sought orders made pursuant to s 87a or, in the alternative, s 87a native title |
He claimed to fear persecution in China based on his Christian activities and beliefs and his involvement in anti-Three Gorges Dam activities. The appellant applied for a protection visa, which a delegate of the Minister refused to grant. The appellant applied to the Tribunal for review of the delegate's decision. He was invited to and did attend a hearing on 6 February 2009. The appellant and a witness attended a further hearing on 12 March 2009. The Tribunal made a decision affirming the decision of the delegate. Federal Magistrate Driver dismissed the appellant's application for review of the Tribunal decision ( SZNLJ v Minister for Immigration and Citizenship [2009] FMCA 606). This is an appeal from his Honour's decision. Before the Tribunal, the appellant claimed that he had suffered persecution in China by reason of his involvement in Christian activities and anti-Three Gorges Dam activities. He claimed to have become a Christian in May 2007 and to have distributed religious materials and the Bible. He claimed to have been involved with protests by peasants who had migrated due to the Three Gorges Dam project. He says that he was arrested, detained, tortured and subjected to physical and mental persecution as part of a process called "education through labour" between 1 November 2007 and 31 December 2007. After this incident, he went into hiding, illegally obtained an Australian visa and fled China. He claimed that he would be arrested if he returned to China because he had taken part in the underground movement of Christians and distributed religious materials and had helped the Three Gorges Dam peasants in their protests. The appellant also claimed that after he arrived in Australia, he attended the Christian Assembly of Sydney church in Lidcombe and a Christian church in Auburn. In view of the matters raised in the appeal, it is relevant to give some further detail of the basis of the appellant's claims, as recorded by the Tribunal in its decision which, in turn, included the appellant's statement made in support of his application for a protection visa. In his application, the appellant stated that from the time he became a Christian in May 2007, he spent almost all of his spare time with Mr Liu, his friend who had spread the Christian Gospel to him, and attended religious gatherings including Bible studying and weekly worship. Some months after that, he was baptised. The gathering group of which he became a member which had started with only three people, including himself, was developed into 83 church brothers and sisters including six sub-groups. The appellant told the Tribunal that he wanted to spread the Gospel with Mr Liu. He said that he spread the Gospel when they assembled and when they distributed leaflets and the Bible to various people. The Tribunal questioned the appellant as to what he told people when he spread the gospel. In response, he stated that he had seen a developer who did not pay construction workers on time and ' if he had been Christian he would not have done this, they should adhere to the Bible teaching that is they should not steal '. He also stated that he told residents of the Three Gorges area about stories in the Bible, mainly that God and Jesus had not forsaken them, as well as asking for religious freedom, respect for the constitution and help for the Three Gorges peasants. He told the Tribunal that he had read the Bible and explained his understanding of what the Bible said and represented. The Tribunal asked him if he read or studied anything other than the Bible and the appellant responded that he read Christian News and propaganda materials. The appellant also stated that he bad been baptised and that other rituals included taking the 'waiver' [sic], the grape juice, singing, prayer on a Sunday and studying the Bible. When asked by the Tribunal whether there were other important rituals during a Christian life, he said confession (or, by reason of translation, perhaps baptism), marriage, prayer in the morning and before meals and prayer and mass on Sundays. The Tribunal accepted that the appellant was a citizen of China but did not otherwise accept the appellant's claims, finding that he was not a credible witness and did not appear to know much about Christianity in China. The Tribunal considered the appellant's evidence regarding how he came to Australia and his evidence regarding a person called Mr A Long who, he said, had provided assistance to him, as implausible. The Tribunal also found that the appellant's lack of knowledge of the church he attended in Sydney meant that it could not be satisfied that the appellant had attended that church other than for the purpose of strengthening his claim to be a refugee. Accordingly, the Tribunal disregarded his conduct in Australia pursuant to s 91R(3) of the Migration Act 1958 (Cth) ( the Act ). The Tribunal concluded that, as to the appellant's claim that he was a Christian: The Tribunal concluded that, based upon the appellant's overall lack of credibility, it was not satisfied that the appellant had suffered past harm as claimed. The Tribunal found that the appellant did not hold any Christian convictions and that there was no real chance of the appellant being persecuted now or in the foreseeable future. His Honour did not accept that the Tribunal's decision was illogical or unreasonable. Rather, his Honour concluded that the Tribunal had a made a reasoned assessment of the appellant's claims and evidence and found a lack of credibility in them. His Honour concluded at [8] that the adverse credibility findings made by the Tribunal were open to it on the material before it. Federal Magistrate Driver also found that the challenge based on s 424A of the Act had no substance. Even though his Honour was of the view that the country information referred to by the Tribunal did not "figure" in the findings and reasons ultimately made by the Tribunal, his Honour observed that, in any event, there was no obligation on the Tribunal to disclose that information by reason of s 424A(3)(a) of the Act. His Honour also expressed the opinion that the Tribunal probably exceeded its obligations pursuant to s 424AA of the Act. That did not mean, his Honour observed, that the Tribunal exceeded its obligations such that there was any indication of error going to jurisdiction but merely that the Tribunal's approach enhanced the fairness of the hearing opportunity. Two unpleaded grounds of review were raised during the hearing before Driver FM. The first was that the appellant said that he was disadvantaged because he had not had the benefit of advice under the Minister's Panel Advice Scheme. While the appellant had asked to participate in the Scheme and a panel advisor had received the court book from the Minister's solicitors, it appeared that the advice had not been given. Federal Magistrate Driver noted that the appellant had told him from the bar table that, while he had received the letter from the Court concerning the advisor, he did not understand the contents of it and did not ask his migration agent or anyone else to explain the letter to him. His Honour considered that in the circumstances as presented to him, the Court and the Minister had done all that they could to assist the appellant and that the non-receipt of advice was not a reason to delay the Court's decision. The appellant also alleged bias on the part of the Tribunal during the hearing in the Federal Magistrate's Court. As noted by Driver FM, the appellant supported this contention by detailed disagreement with the Tribunal's reasoning process. His Honour explained to the appellant that even if the appellant's claims before the Tribunal were true and the Tribunal made mistakes in rejecting those claims, that would not establish bias. In any event, his Honour found no evidence of the Tribunal's presiding member having a closed mind or even of a reasonable apprehension that the presiding member did not bring an unprejudiced mind to the review. That is, Driver FM did not accept that the Tribunal was biased simply because the appellant disagreed with the Tribunal's reasons. The Federal Magistrate was wrong in finding that the Refugee Review Tribunal acted properly in its findings. The grounds are unparticularised. However, the appellant has filed written submissions which set out grounds of appeal and particulars of those grounds. They do not accord with the filed notice of appeal but the Minister takes no issue with that and has addressed the appellant's written submissions. He submits that if the Tribunal did make a significant mistake and that if a differently constituted Tribunal might have reached a different decision, then it must be clear that the Tribunal failed to act in accordance with s 420. Section 420 of the Act is a facultative non-restrictive provision. Its purpose is to free tribunals, at least to some degree, from constraints otherwise applicable to courts of law and regarded as inappropriate to tribunals ( Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at [49] per Gleeson CJ and McHugh J). Section 420 informs the grounds of review specified in s 476 of the Act but has only an indirect effect on review proceedings ( Eshetu at [76] per Gaudron and Kirby JJ). That is, the section does not impose procedures the breach of which gives rise to a ground of review ( Eshetu at [77]) per Gaudron and Kirby JJ). In any event, even if the appellant were to establish that the Tribunal made a "significant mistake", that does not necessarily establish jurisdictional error. The fact that, theoretically, another Tribunal may have reached a different decision on the claims as presented by the appellant does not mean that the Tribunal failed to comply with s 420. The ground of appeal based on a contravention of s 420 is not made out. This ground concerns access to legal advice through the Panel Advice Scheme. It is apparent from the Federal Magistrate's decision that the appellant had asked to participate in the Panel Advice Scheme. A panel advisor had been provided and the Minister had sent the requisite material to him. The advisor was contacted by the court on 8 May 2009. He advised that he had thought himself able to provide advice by 9 June 2009 and that he would send back an "Advice Given Form" to the Registry once advice had been given. It did not appear that the form had been returned prior to the hearing on 26 June 2009. His Honour said that while in his view it was unfortunate that the appellant had apparently not received the advice pursuant to the Scheme, the Court and the Minister's solicitors had done what they could do to facilitate the provision of the advice. As recorded in his Honour's reasons, the appellant accepted that he had received the letter from the Court concerning the allocation of a panel advisor but said that he did not understand the contents of it. His Honour said that for reasons best known to the appellant he did not ask his migration agent or someone else to explain the letter to him. On the hearing of the appeal, the appellant said that he had talked about the letter with his migration agent who said that counsel would contact him and that he did not know how to make contact himself. These two versions are obviously inconsistent but it is not necessary to resolve the inconsistency. It is not the duty of the Federal Magistrates Court to ensure that those appearing before it obtain legal advice. The appellant was represented by a migration agent, including at the time of receipt of the letter concerning the Panel Advice Scheme. The letter stated that if the applicant had not heard from counsel within three weeks after the receipt of the green book from the Court, the applicant should contact counsel. The appellant did not do so. The appellant does not challenge the fact that the Federal Magistrates Court and the Minister's solicitors had done what they could in relation to the provision of the advice. However, I considered that a short time should be allowed to enable the panel advisor to provide the advice and for the appellant to provide any further written submissions based upon that advice. The Court has received confirmation by the panel advisor that he met with the appellant on 9 November 2009 and provided written advice to the appellant on 12 November 2009. Further written submissions have been received from the appellant and written submissions in reply have been received from the Minister. That disposes of this ground of appeal. The particulars and submissions given in support of this ground contained in the appellant's first set of submissions all raise factual matters concerning the appellant's claims. In his further written submissions, the appellant submits that the Tribunal failed to provide him with a genuine opportunity to speak generally about his faith at the Tribunal hearing and that it had already formed a firm view before he was questioned about his faith because it was affected by incorrect independent country information. He refers to SZMSS v Minister for Immigration and Citizenship [2009] FMCA 93 in support of this submission. It is apparent that the appellant disagrees with the factual findings of the Tribunal. That does not provide a basis for the serious allegation of actual bias, nor does it indicate that the Tribunal had a mind ' incapable of alteration ' or that ' a fair minded lay observer might reasonably apprehend that the judge [or Tribunal] might not bring an impartial mind to the resolution of the question to be decided ' ( Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 at [72] ; VFAB v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 872 ; (2003) 131 FCR 102 at [25] citing Re Refugee Review Tribunal; Ex Parte H [2001] HCA 28 ; (2001) 179 ALR 425). Contrary to the appellant's submission, the Tribunal's reasons at [29] to [33] indicate that the appellant was given the opportunity to speak generally about his faith at the Tribunal hearing (cf SZMSS at [12]). For example, the appellant recounted his conversion to and practice of Christianity and explained his understanding of the Bible. The Tribunal asked the appellant why he converted to Christianity and what he told people when he spread the gospel. These questions were largely responsive to the matters raised by the appellant. Other questions asked by the Tribunal concerned the appellant's own practice of Christianity in China and whether he had read or studied anything other than the Bible. Otherwise, the Tribunal asked the appellant a question about each of the second coming and the appellant's view of creation. The appellant answered each question. There is no indication in the Tribunal's reasons that it asked these questions in a manner that suggested pre-judgment or a closed mind (cf SZMSS at [15]). Questions exploring the appellant's knowledge of his claimed faith, on which he relied as a basis for a well-founded fear of persecution, do not of themselves indicate bias or a closed mind or a failure to consider the appellant's claims. The Tribunal then turned to the appellant's knowledge of the Church he attended in Sydney. It put a number of questions concerning the beliefs and practices of the Church to the appellant and to Mr Ng, known as Brother Wu, who had accompanied the appellant to the hearing. The Tribunal said that it had done some reading about the Church and it appears that such reading may have informed the Tribunal's questions to the appellant and Mr Ng. However, this does not indicate bias or a closed mind. The ground of appeal based on an allegation of bias or apprehended bias by the Tribunal is not made out. Did the Tribunal fail properly to consider the appellant's claim? The appellant raised a further matter at the hearing. He noted that the Tribunal made its finding that he was not a Christian based on his lack of detailed knowledge of the Bible and of the Church he had attended in Sydney. He said that he only converted to Christianity recently, in 2007, and never claimed to have in depth knowledge of the Bible. He said that he was not a Christian who based his faith on detailed knowledge of the Scriptures but that he was simply a follower of Christ. He said, in effect, that the Tribunal failed to consider his claim to be such a Christian. While this ground raises interesting questions of philosophy, it does not accord with the appellant's claims as made to the Tribunal. The appellant told the Tribunal that he had studied the Bible and that Bible study was one of the tenets of Christianity that he followed. The Tribunal tested those assertions. The Tribunal considered whether it was satisfied that the appellant was a Christian in China. The Tribunal's conclusions were not based only or primarily on a failure on the part of the appellant to answer detailed questions about Christian beliefs and practices. If they had been, there would be some merit in the appellant's ground of appeal that the Tribunal failed to consider his claim that he was a recent convert to Christianity and that being a Christian or a follower of Christ, as the appellant claimed, did not necessitate a detailed knowledge of the Scriptures. The Tribunal considered the appellant's Christian faith in two contexts: in China and in Australia. The transcript of the Tribunal hearing is not in evidence and the course of the hearing can be taken from the Tribunal's reasons. The nature of the discussion at the hearing regarding the appellant's Christian beliefs and practices in China and more generally has already been set out earlier in these reasons (e.g. at [4]---[6], [30] and [31]). The Tribunal also questioned the appellant regarding the Church he attended in Sydney. It inquired whether it was different from other Christian Churches and why he had chosen that Church. The appellant stated that his Church in Sydney had similar beliefs to what he believed in China but did not know whether this Church was different to other churches in Australia because he had never been to another church. He also said that he was led to the Church by a person he lived with. The Tribunal then questioned Mr Ng, who was a leader of the Church. Mr Ng explained how the Church was different from other Christian churches but also said that while they had Watchman Nee, about whom they talked and whose books they studied, the young people did not know who Watchman Nee was. The appellant did not know about him and said he did not know who founded the Church. The Tribunal then put to the appellant its concerns that he did not appear to know much about his present Church. The Tribunal found the appellant not to be a credible witness. This was not because of his knowledge of Christianity but because of the account that he gave about how he came to Sydney and the involvement of Mr A Long. The Tribunal then considered the appellant's evidence of his knowledge of the Christian Assembly of Sydney. The Tribunal found that the appellant lacked knowledge and had a very poor understanding of his Church. That lack of knowledge of itself did not cause the Tribunal to reject the appellant's claim that he was a Christian. The Tribunal did not accept that a person who has purportedly been prepared to risk detention for his religion, as the appellant claimed, would continue with the organisation without asking questions about the very specific practices of the church, which included Watchman Nee's book, the non-celebration of Christmas and its stance against the system of priests. The Tribunal was concerned that the appellant displayed a lack of understanding of this "basic tenet" of this Church's teaching when he referred to Mr Ng as a priest. The Tribunal concluded that, even though the appellant had attended the Christian Assembly of Sydney since his arrival in Australia and may have assembled with Christians in Auburn and read Christian News, he had not done so other than for the purposes of strengthening his claim to be a refugee. The Tribunal said that it disregarded this conduct, in accordance with its understanding of s 91R(3) of the Act. As to the appellant's claim that he became a Christian in China, the Tribunal took into account that the appellant did not know much about Christianity in China. However, the basis for the Tribunal's finding that the appellant does not hold Christian convictions was not based so much on his lack of knowledge as it was based upon the finding of overall lack of credibility (based on the account concerning Mr A Long) and his inability to articulate meaningfully why he converted to Christianity and how he himself spread Christianity. The Tribunal did consider the appellant's claim to be a Christian based on the activities he claimed to have engaged in, without presuming that a genuine Christian must have detailed knowledge of the Bible or Christian practices. The Tribunal did not reject the appellant's claims for lack of knowledge but because of its findings as to the appellant's own account of his conversion and activities in China and its assessment of his credibility. The Tribunal did not fail to consider the appellant's claims, as made to it. For the sake of completeness, although not raised by the appellant in the appeal, I agree with Driver FM that, in referring to independent country information not put to the appellant, the Tribunal did not contravene s 424A(1) by reason of s 424A(3)(a) of the Act. No error has been identified in the reasons of the Federal Magistrate nor can any other error of law be discerned from the decision of the Tribunal. The Tribunal identified with particularity all of the appellant's claims and the supporting material before it. The Tribunal explored his claims with him at the hearing. It raised with the appellant the inconsistencies in his evidence and doubts over his claims. The Tribunal made findings based on the evidence and material before it and applied the correct law to its findings in reaching its conclusion that it was not satisfied that the appellant was a person to whom Australia has protection obligations under the Convention. The appeal should be dismissed 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 Bennett. | appellant claimed to face persecution in china due to christian beliefs and activities tribunal disregarded appellant's attendance at a church in sydney due to lack of knowledge about the church tribunal did not believe appellant was a christian whether the tribunal failed to consider a claim to be a christian who did not have detailed knowledge of the scriptures migration |
Order 2 of the Orders made today is an order that the appellant shall pay the costs of the first respondent of and incidental to the appeal. I have before me an application by the first respondent for an order that the costs the subject of Order 2 be fixed in an amount of $2,700.00. The application is supported by an affidavit of Mr Peter Snell a solicitor employed by Sparke Helmore Lawyers, the solicitors for the first respondent. The affidavit deposes to the sequence of steps involved in preparing and responding to the appeal. The affidavit of Mr Snell identifies an estimate of the party and party costs the first respondent would be entitled to recover on taxation in accordance with 'Schedule 2 --- scale of costs for work done and services performed' in accordance with the Federal Court Rules . Having regard to Mr Snell's affidavit, I am satisfied that an amount of $2,700.00 properly represents a discounted amount of the party and party costs the first respondent might otherwise be entitled to recover upon taxation. Accordingly, I make a further order that the costs of the first respondent the subject of Order 2 made today described above be fixed in the amount of $2,700.00. I certify that the preceding one (1) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for an order that costs of the appeal be fixed in an amount migration |
On 6 July 2005 French J granted leave to appeal from the 15 April Order. On 11 November 2005 that appeal was dismissed by the majority (Finn and Moore JJ) with Lee J in dissent. Their Honours made the following findings in relation to the 15 April Order. He held there was 'a real risk that following on that error of law, a further order will be made in the strike out application that will deny the [applicant] the right to prosecute its claims' (at [6]). Moore J stated it 'was an unusual one' and it is not entirely clear 'why it was necessary for the affidavit to be ordered' or 'what information would likely be elicited in an affidavit filed in compliance with the order' (per Moore J at [31]-[33]). Finn J held the exercise of the discretion 'must have involved an error of principle as it lacked any proper foundation in the circumstances' and that the order 'ought not to have been made' (per Finn J at [37]). He said the applicant might be exposed to 'real injustice' from the possible consequences of non-compliance with the 15 April Order and the fact of non-compliance might 'prove to be a factor to which his Honour would attribute significance in his decision on the motion' (at [39]). Lee J was of the view that to attach supervening weight to case management would deny a right to a remedy to which a party was otherwise entitled and would elevate procedure over substance. On 9 December 2005 the applicant sought special leave to appeal the decision of the Full Federal Court to the High Court. On 26 October 2006 the application for special leave was dismissed (Gleeson CJ, Hayne J and Crennan J). After noting that the application concerned an interlocutory ruling on a matter of practice and procedure, it was stated that it did not give rise to an issue suitable to a grant of special leave. In the course of presentation of argument on the application, Gleeson CJ stated that there was reason to limit the extent to which litigants are permitted to agitate interlocutory rulings. His Honour also referred to the fact that it may be open to one of the parties to move the docket judge to have regard to what was said by the majority of the Full Court and to change his mind about the ruling. The applicant now moves the Court to set aside the 15 April Order. It is common ground that the Court has power to do so. This arises under O 35 r 7(2)(c) of the Federal Court Rules . It is both unnecessary and inappropriate in the case of a statutory court like the Federal Court to rely upon "inherent jurisdiction" as was suggested by the parties. ( Hunter v Leahy [1999] FCA 1075 ; (1999) 91 FCR 214 at 220 per French J referring to Jackson v Sterling Industries [1987] HCA 23 ; (1987) 162 CLR 612) Rather it is implied power from a particular statutory provision that forms the basis of the power to act if the power is not expressly stated. However, there are competing submissions on how the discretion arising from the jurisdiction should be exercised. The applicant contends it will not preclude the exceptional step of reviewing or rehearing an issue 'when a court has good reason to consider that, in its earlier judgement, it was proceeded on a misapprehension as to the facts or the law' and there is also no reason 'to confine the exercise of its discretion in a way that would inhibit its capacity to rectify what it perceives to be an apparent error arising from some miscarriage in its judgment' (per Mason CJ in Autodesk Inc v Dyason (No 2) (1992) 111 ALR 385 at 386-387) or 'if the interests of justice so require' because the judgment involved a misunderstanding of the facts or misapplication of the law in relation to one or more issues (per Gaudron J in Autodesk 111 ALR at 407). The applicant also places reliance on De L v Director-General, New South Wales Department of Community Services (No 2) [1997] HCA 14 ; (1997) 143 ALR 171 at 176-177, where the High Court reaffirmed its own jurisdiction to open its judgments and orders and held that by doing so, courts seek to recognise competing objectives of the law, being, on the one hand, the principle of finality of litigation and on the other hand, the court's recognition 'that accidents and oversights can sometimes occur, which, unrepaired, will occasion an injustice'. On the other hand, the first and second respondents contend an interlocutory order made after a hearing at which each party had the opportunity to put its case should not be disturbed upon a subsequent application unless there is need to accommodate a change of circumstances or where evidence has since become available and litigants who failed to put forward their best cases in interlocutory applications face serious and self-created risks: Nominal Defendant v Manning [2000] NSWCA 80 ; (2000) 50 NSWLR 139 at 143, 147 and 156. Those respondents refer also to Commonwealth v Albany Port Authority [2006] WASCA 185 at [25] where Steytler J determined that courts will not lightly vary or set aside orders previously made, at least in the absence of fraud or fresh evidence: citing with approval DA Christie Pty Ltd v Baker [1996] 2 VR 582; Nominal Defendant 50 NSWLR at 156-157 per Heydon JA; Re Sinanovic's Application [2001] HCA 40 ; (2001) 180 ALR 448 at 450-451 per Kirby J; and Phillip Morris Ltd v The Attorney General for the State of Victoria [2006] VSCA 21 at [120] per Ormiston JA. Additionally the first and second respondents make the submission that any challenge to interlocutory orders (by reference to the Court's power to do so) should not be relied upon as a substitute for an appeal and, if so, the challenge should be refused as it is a misuse of process: Merkel J in Australian Prudential Regulatory Authority v Siminton (No 2) [2006] FCA 336 at [5] . It is submitted that the context in which it was made was important in that respect, namely, that it was made by a docket judge case managing a commercial dispute that had dragged on for over five years at the time of the decision (now nearly seven years). It is submitted, by reference to transcript at the time the 15 April Order was made, that it was intended to protect the Court's own processes from possible abuse and to assist his Honour in determining whether to exercise the Court's jurisdiction to grant a stay or dismissal of the proceedings. In that respect these respondents are seeking a different characterisation of the 15 April Order from that made by the Full Court. In my opinion that course is not open to me. I should follow the reasoning of the Full Court. The first and second respondents also place reliance on the fact that the actual decision of the Full Court was that the 15 April Order should not be set aside. Nevertheless, it is apparent that both in the reasoning of the majority in the Full Court and in the reasoning of their Honours sitting on the special leave application in the High Court, the only reason that the 15 April Order was not set aside was that it related to a matter of practice and procedure. More significant in my opinion is that both Lee and Finn JJ found that there was not sufficient evidence before me upon which to make the 15 April Order. The first and second respondents also draw attention to the fact that the 15 April Order presently stands and that the applicant is in default of it. Further, that following the dismissal of the appeal to the Full Federal Court on 11 April 2005 the applicant sought no further variation of the 15 April Order either before or after its application seeking special leave was brought. In effect therefore, it is said by those respondents, the applicant has ignored the authority of the 15 April Order since 11 November 2005. As against that, I must have in mind that the authority of the 15 April Order derives from its character as an order in practice and procedure not from its inherent correctness. The first and second respondents also submit that this is not a case where the 15 April Order can be seen to be incorrect as a result of a mistake of counsel or as a result of a mistake of the judge that was not corrected by counsel. Further, that it is not an order that incorrectly reflects its intention. Also, there is no fresh evidence brought which is relevant to the making of the 15 April Order. Returning to the first and second respondents' submission that the application to set aside the 15 April Order should not be allowed as a substitute for an appeal, I consider that here there is a distinction to be drawn from that general principle. The distinction is that the appeal has not been successful but has exposed that, apart from the discretion of the docket judge in matters of practice and procedure, the order under appeal is unsupportable. The appeal by deference to practice and procedure has emphasised the importance of the discretion of the docket judge. That discretion must be exercised having regard to what has been said by the members of the Full Federal Court as to the correctness of the making of the 15 April Order. In my view the discretion residing in me as docket judge should be exercised to rectify what has been perceived by all the members of the Full Court (apart from the deference of two of them to the discretion of the docket judge in matters of practice and procedure) to be an apparent error arising from a miscarriage in the judgment of the Court: cf Autodesk 111 ALR at 386-387. Accordingly I consider that the Court should set aside the 15 April Order. | interlocutory order whether order should be set aside order requiring disclosure to court of circumstances pertaining to beneficial ownership of applicant's cause of action leave granted to appeal from order full court dismissing appeal by majority special leave to appeal refused deference to character of order as an issue of practice and procedure whether court should exercise discretion to set aside order procedure |
An interlocutory application on behalf of the plaintiff, Pendant Software Pty Limited ("Pendant Software") for an order that the second defendant, Mr Berend Hoff, be restrained from taking any further step directly or indirectly in a proceeding/application commenced by him in the Takeovers Panel pursuant to the application made by him dated 25 May 2006. 2 There is also a notice of motion filed on behalf of the first, fourth and fifth defendants, that the proceeding be dismissed generally, or as against them with no order as to costs and in the alternative, an order that the proceeding be stayed generally or against them, until further order. 3 The background to the applications is set against a takeover offer by Pendant Software for all of the shares in the capital of Tower Software Engineering Pty Limited ("Tower"). Tower has an issued capital of 31,176,500 shares held by approximately 124 shareholders. It carries on the business of the supply of software for document management in large organisations, primarily to government and large bureaucratic institutions. Pendant Properties Pty Limited, a company associated with Pendant Software, holds 9,521,000 shares in the capital of Tower representing approximately 30.54 per cent of its issued capital. 4 The second defendant, Mr Hoff, a director of Tower, owns 9,432,464 shares in the capital of Tower representing approximately 30.26 per cent of its issued capital. Tower's Constitution has pre-emptive rights for existing shareholders which restrict the opportunity for shareholders to transfer shares in Tower without first offering them to existing shareholders. These pre-emptive rights are found in rule 120 of the Constitution of Tower. 5 Rule 121 which is headed, "Registration of Transfers --- Directors' discretion", provides that subject to rule 120.8 the directors may in their discretion refuse to register a transfer of shares from a member to a non member without assigning any reason for refusal. Rule 120.8 is not relevant for present purposes but it provides for the transfer of shares to family members or related entities of a member. 6 On 9 January 2006, Tower sent to shareholders a transfer notice received from a shareholder, Equity Partners One Pty Limited ("Equity Partners"), which was seeking to sell 4,500,000 shares in Tower for $1.45 per share. Tower's notice to shareholders offered these shares to existing members in accordance with the pre-emptive rights provision contained in rule 120. No shareholders wanted to purchase any of the shares offered for sale by Equity Partners. The offer price was $1.45 per share. The takeover announcement and offer also noted that rule 120 of Tower's Constitution applied. If this condition is not fulfilled, all contracts resulting from the acceptance of the Offer will be automatically void. This condition cannot be waived by Pendant. The majority of the Directors were of the opinion that it was in the interests of Tower Software to consent to early distribution so that shareholders, and staff in particular, were as fully informed as practicable. Mr Frost declared his interest as a Director and shareholder in the Bidder. The acceptance and transfer form was signed by Pendant Software and dated 20 April 2006. 9 On 1 May 2006 Pendant Software declared its offer unconditional pursuant to s 650F of the Corporations Act 2001 (Cth) ("the Act "). It declares each Offer and any contract resulting from acceptance of such Offer free from all the conditions set out in Section 10.7 of the Bidder's Statement. As at 9.00 am on the date of this Notice, Pendant has received acceptances under the Offer for 4,500,000 shares in Tower Software, being 14.43% of all shares in Tower Software on issue. Pendant therefore has voting power in these shares. Pendant also has or is deemed to have voting power in those shares. As Pendant Software Pty Ltd ( Pendant ) has a legally binding unconditional acceptance and transfer from Equity Partners One Pty Ltd ( Equity Partners ) for 4,500,000 shares (14.43%) I formally request a meeting of Tower Software directors to be held at the soonest possible date. Prior to the meeting the Chairman of Tower, the fifth defendant, obtained a memorandum of advice from Tower's solicitors, Mallesons Stephen Jaques. In this memorandum of advice the solicitors summarised the background to the takeover offer and the transfer from Equity Partners, gave advice in relation to the exercise of directors' discretion and as to the legality of the agreement in relation to the transfer of Equity Partners' shares to Pendant Software. In particular section 4.7 of the advice which was headed, "Can directors take a further possible bid into account? In our view, where registration of a transfer might prevent or discourage a new bid at a higher price and there is a real prospect of such a bid, that is a factor to which the Directors could properly have regard in exercising their discretion to refuse registration. Counsel's advice joined issue with the advice of Mallesons Stephen Jaques and in substance argued that it was improper for the directors to take into account the possibility of another bid at a higher price as being a reason for justifying the refusal to register the shares. This particular matter was dealt with in paragraphs 41, 48 and 49 of counsel's advice. 12 The directors' meeting was held on 4 May 2006. The chairman tabled a letter from Quadrant Private Equity Pty Limited which stated that Quadrant submitted a confidential, non binding proposal on behalf of funds advised by it to acquire on a friendly basis Tower, and set out in summary the proposal with an indicative price of $1.55 per share. The proposal was noted to be incomplete, confidential and non binding. 13 Item 5 on the agenda before the Board was the transfer by Equity Partners to Pendant Software. According to Mr Frost he tabled the acceptance and transfer form executed by Equity Partners in respect of the 4,500,000 shares held by it and moved two resolutions. The first was that the directors of Tower agree to register the acceptance and transfer received by Pendant Software under its offer dated 18 April 2006 from Equity Partners. The second resolution was that the directors of Tower agree to register all acceptances and transfers received by Pendant Software under the offer no later than 10 days after acceptances became unconditional or 10 days from the end of the offer period, unless extended under the Act , whichever was the earlier. 14 According to the Chairman, Mr Service, and the company secretary, the resolution which was put was that the transfer tabled by Mr Frost in respect of 4,500,000 shares in the company from Equity Partners to Pendant Software, for a total consideration of $6,525,000 be registered. For present purposes nothing turns on the difference in the versions of the resolution which were put. In the events which occurred the resolution in relation to the transfer was put, and was defeated. Mr Frost abstained from voting. The second resolution was put and that was defeated as well and again Mr Frost abstained from voting. A declaration that the second and third provisos set out in the resolution of the directors of the company passed on 4 May 2006 (as set out in the affidavit of Frederick John Frost affirmed in this proceeding on 9 May 2006) are void and of no effect and that the said resolution is and was from 4 May 2006 otherwise valid according to its terms and constitutes and constituted a consent or approval to registration within the meaning of s 1071F(1)(a) of the Corporations Act . An order nunc pro tunc (with effect from 4 May 2006) under section 1071F(2) of the Corporations Act that the instrument of transfer dated 19 April 2006 between Equity Partners One Pty Limited as transferor and the Plaintiff as transferee in respect of 4,500,000 shares in the capital of the First Defendant be registered. Further or alternatively, an order nunc pro tunc (with effect from 4 May 2006) under section 175 of the Corporations Act that the plaintiff be entered on the first defendant's register of members as the holder of the shares referred to in Order 2 of these orders. Subject to final hearing and determination of the proceeding or further order, an interlocutory order requiring the defendants (as the "relevant authority" as that term is defined in s 1071F of the Corporations Act ), by no later than 5pm on 11 May 2006, to consent to or approve (subject only to payment of stamp duty) the registration of all instruments of transfer delivered to the company for registration by the plaintiff in respect of acceptances received by the plaintiff under the takeover offer made by the plaintiff for shares in the company dated 18 April 2006 including the instrument of transfer dated 19 April 2006 between Equity Partners One Pty Limited as transferor and the Plaintiff as transferee in respect of 4,500,000 shares in the capital of the company. Further or alternatively and subject to final hearing and determination of the proceeding or further order, an interlocutory order requiring the defendants (as the "relevant authority" as that term is defined in s 1071F of the Corporations Act ), by no later than 5 pm on 11 May 2006, to consent to or approve (subject only to payment of stamp duty) the registration of the instrument of transfer dated 19 April 2006 between Equity Partners One Pty Limited as transferor and the Plaintiff as transferee in respect of 4,500,000 shares in the capital of the company. Further or alternatively and subject to final hearing and determination of the proceeding, a condition set out below or further order, that the instrument of transfer dated 19 April 2006 between Equity Partners One Pty Limited as transferor and the Plaintiff as transferee in respect of 4,500,000 shares in the capital of the company (subject only to payment of stamp duty) be registered by no later than 5pm on 11 May 2006 and that the plaintiff be entered on the first defendant's register of members as the holder of said shares. Directions for an urgent trial as may be appropriate. It was opposed by the directors. It was argued, in substance, that the third proviso to the resolution of 4 May 2006 disclosed a refusal to register the shares for an improper purpose. 21 In the course of the hearing s 659B of the Act was raised in relation to the Court's jurisdiction to hear the interlocutory application. I also found that the balance of convenience was in favour of the grant of interlocutory relief. In relation to s 659B I found that although it might be put that the action before the Court was taken for the purpose of the bid an issue of characterisation of the relief arose because the substantive and ultimate relief which the plaintiff was seeking was a remedy for refusal of ultimate registration and an acceptance for registration of the transfers under s 1071F of the Act . I held that s 659B was a general provision and s 1071 was a specific provision in relation to a specific remedy and I considered that there was a serious question to be tried as to whether the Court had jurisdiction in relation to granting interlocutory relief where the ultimate relief sought was in respect of relief under s 1071F of the Act . 23 I made a limited order on that day for the purpose of keeping the takeover offer alive having regard to the self executing nature of condition 10.8 of the offer. Subject to the final hearing and determination of the proceeding, the conditions set out below or further order, the defendants/respondents (as the "relevant authority" as that term is defined in s 1071F of the Corporations Act 2001 (Cth) ("the Act ") by no later than midnight on 11 May 2006, consent to or approve (subject only to payment of stamp duty) the registration of all instruments of transfer delivered to Tower Software Engineering Pty Limited ("the company") for registration by the plaintiff/applicant in respect of acceptances received by it under the takeover offer made by it for shares in the company dated 18 April 2006 including the instrument of transfer dated 19 April 2006 between Equity Partners One Pty Limited as transferor and the plaintiff/applicant as transferee in respect of 4,500,000 shares in the capital of the company. Liberty is reserved to all parties to apply on one day's written notice to each other party. Costs reserved. At the directions hearing on 24 May 2006 I was told that the resolution contemplated by my order of 11 May had been passed and that the only issue left in the proceeding was the issue of registration. 25 I was also informed that Mr Hoff, as a shareholder in Tower, was proposing to issue an application before the Takeovers Panel the next day and wanted to adjourn the further directions hearing for the time being. Pendant Software's takeover offer was open until 18 July 2006. 26 The issue which was before the Court at this stage was put rather succinctly by Mr Glick S.C. for Pendant Software, in the following terms. The single point is this. It is a single point. It is almost like a case stated. Is it within the discretion of the directors under these articles to refuse to register an acceptance of shares for the reason that registration of those shares may, may prevent, another person bidding a higher price for the shares? Now, I may not have put that elegantly but that is a single point. Is that a proper or improper purpose? Directions were then given on the basis of a Panel hearing and determination probably occurring thereafter. It should be noted that there were different parties in each proceeding. Although Mr Hoff was a party to both of them he was a party in a different capacity. As a defendant in this Court his capacity was that of director; in the Takeovers Panel application he was proceeding as a shareholder. 30 The validity of the Equity Partners acceptance and transfer is in issue in both proceedings. Pendant Software contends that the issues raised by Mr Hoff before the Panel substantially overlap issues raised in the Court. However, the Panel brief raises many issues which will not be before the Court. For example, there are the issues raised under the heading, "Disclosure" in paragraphs 10 and following of the annexure of issues for consideration annexed to the Panel brief. There are the issues under the heading, "Early dispatch of the bidder's statement", in paragraphs 23 and following. It is also fair to say that the Panel brief does raise one of the issues which is before the Court in paragraph 39 which asks, "How does the Applicant's submission that Equity Partners' acceptance ought to be declared void fit with the current Federal Court proceedings? It is not a party to the interlocutory application to restrain the continuation of the proceeding before it. The restraint which is sought is against Mr Hoff. 32 There was a meeting of the Board of Tower on 1 June 2006 at which Mr Frost said he was not seeking registration of the transfer from Equity Partners. The Chairman said that he and the first and fourth defendants had no objection to the transfer being registered immediately on it being presented to Tower in registrable form. It is in those circumstances that the first, fourth and fifth defendants filed their motion to seek dismissal or stay of the proceeding as they contend that the point is now moot. 33 Pendant Software seeks in substance an anti-suit injunction against Mr Hoff. The principles of anti-suit injunctions are well established. Mr Ehrlich who appeared on the interlocutory application for Pendant Software referred to two well known authorities in this area. And in some cases, it is that counterpart power of protection that authorises the grant of anti-suit injunctions. Thus, for example, if "an estate is being administered ... or a petition in bankruptcy has been presented ... or winding up proceedings have been commenced ... an injunction [may be] granted to restrain a person from seeking, by foreign proceedings, to obtain the sole benefit of certain foreign assets". Similarly, as Gummow J pointed out in National Mutual Holdings Pty Ltd v The Sentry Corporation , a court may grant an injunction to restrain a person from commencing or continuing foreign proceedings if they, the foreign proceedings, interfere with or have a tendency to interfere with proceedings pending in that court. As with other aspects of that power, it is not to be restricted to defined and closed categories. Rather, it is to be exercised when the administration of justice so demands or, in the context of anti-suit injunctions, when necessary for the protection of the court's own proceedings or processes. To succeed in obtaining an injunction on that ground, the plaintiff must establish that there is a real risk, as opposed to a remote possibility, that justice will be interfered with if the Commission proceeds in accordance with its present intention. The tendency of the proposed actions to interfere with the course of justice must be a practical reality - a theoretical tendency is not enough. So much is recognized by the Builders Labourers' Case . A witness appearing before the Commission is subject to the obligations imposed by s. 6 of the Royal Commissions Act 1902 (Cth) and s. 16 of the Evidence Act 1958 (Vict.). I consider that the matter is not the integrity of the takeover offer as a whole; that is a matter for the Panel. The primacy of the Panel's jurisdiction in relation to takeover offers is found in ss 659AA and 659B of the Act . However, the declarations for which s 657A provides are not binding declarations of right, in the sense in which that term is used in the context of the exercise of judicial power. The adjudication made by the review panel in the present case was not an adjudication of a dispute about rights and obligations of the parties that had arisen from the operation of the law on past events or conduct. The object of the review panel's declaration and orders was not to resolve a dispute about existing rights and obligations, by determining what those rights and obligations were, but to determine what legal rights and obligations should be created . In that sense, the decisions of the review panel did not involve any adjudication of a dispute about existing rights and obligations. In applying for a declaration and orders, Centennial was not seeking the vindication of any right or obligation. The declaration made by the review panel did not resolve any actual or potential controversy as to existing rights: see, generally, Precision Data Holdings Ltd v Wills [1991] HCA 58 ; (1991) 173 CLR 167 at 188-190; 104 ALR 317 at 325; 6 ACSR 269 at 277. He submitted that if the Panel made a declaration that the transfer, which is the subject of this proceeding, was declared void then a declaration sought in this proceeding would be rendered nugatory. However, it is open to the Panel to make such a declaration for reasons unrelated to the reasons which might move the Court to grant the relief that is open to it in this proceeding. 39 The Panel, pursuant to s 657A of the Act , can declare circumstances in relation to the affairs of a company to be unacceptable circumstances. That opportunity or option is not available to the Federal Court. The Panel can make a declaration of unacceptable circumstances for a reason that it is not open to the Federal Court in respect of a matter on which the Federal Court cannot adjudicate upon. Although the directors reserve the right in this proceeding to allege that they are entitled to refuse registration of the transfer for just cause because of unlawful conduct on the part of Pendant Software the Federal Court cannot approach that matter on the basis of determining whether any conduct of Pendant Software constituted unacceptable circumstances as contemplated by s 657A of the Act . 40 The Federal Court does not have available to it the framework within which the Panel may declare circumstances to be unacceptable circumstances, although of course the Court can determine whether breaches of the Act have occurred. It may well be that the opportunity for the directors to argue that they were not obliged to agree or consent to registration of the transfer from Equity Partners to Pendant Software will raise for consideration whether there has been a breach of s 606 of the Act , so that for the purposes of s 1071F of the Act , the directors were entitled to refuse to give their consent or approval to the registration of the transfer. 41 As Mr Ehrlich put it, whether there was a breach of s 606 and a pre-bid understanding may well form part of the substratum of facts that go to the question whether the directors had just cause to refuse to agree or consent to registration of the transfer. Nevertheless the determination of whether such an issue gives rise to unacceptable circumstances is a matter committed to the Panel under the Act . There is a statutory scheme, the object of which is enshrined in s 659AA , namely that the Panel is the main forum for resolving disputes about takeover bids until the bid period has ended. 42 As counsel for Pendant Software acknowledged earlier, it is no part of Pendant Software's application to this Court to exclude the operation of the Panel in relation to the takeover offer. What Pendant Software does seek is to challenge what it called a self-evident attempt to render nugatory the Federal Court proceeding and destroy the subject matter of it. However, if the Panel makes a declaration which has a consequential effect upon the transfer from Equity Partners to Pendant Software, it will do so not because it has assumed the role of the Federal Court, but rather for a reason, namely the existence of unacceptable circumstances, with which the Court cannot deal. That matter is committed to the Panel. 43 The Federal Court is not seized of the determination of all the issues raised by Mr Hoff before the Panel; it is seized of the issue whether the directors have acted in a way which invokes s 1071F of the Act . Although the Court has to determine whether the directors were, on 11 May 2006 and prior thereto on 4 May 2006, entitled to refuse to agree or consent to the registration of the transfer from Equity Partners, the Court is not set at large upon the sea of the takeover offer, although it can determine whether the directors had just cause to refuse to agree or consent to the registration of the transfer. If there be any unacceptable circumstances found in the lead up to an implementation of Pendant Software's takeover offer then it is for the Panel to tease those out and make declarations in relation to them. That is not a task committed to the Federal Court under the Act . It is a consequence of the Panel undertaking the task identified by Emmett J in par [56] of his judgment in Glencore (supra). It is not the Panel making a decision on, or a declaration in relation to, the issue of the obligation of the directors on 4 or 11 May 2006. The consequence of the Panel's determination may be to remove the substratum of the basis for the registration of the transfer sought by Pendant Software, but that is not because of the Panel assuming the task of the Court or destroying the substratum of the matter before the Court. It is because there is a separate and independent basis for a challenge to the consequences of the carrying out and implementation of Pendant Software's takeover offer. 45 Mr Ehrlich submitted that what was left alive by the interlocutory order I made on 11 May 2006 was the lawfulness of the directors' conduct in relation to the transfer. Assuming for the moment that that submission is correct, it does not follow that the Panel cannot reach a conclusion in relation to the takeover which may equate with the unlawfulness of directors' conduct. It will not be a finding of unlawful conduct such as a Court might make, rather it is as a result of a finding of unacceptable circumstances within a framework of the takeover offer and the Panel provisions of the Act . 46 Accordingly I am not disposed to restrain Mr Hoff from continuing with his application to the Panel. I am also not disposed to dismiss the proceeding as against the first, fourth and fifth defendants or stay the proceeding against them as sought in their motion. Their counsel in argument did not press for dismissal. Mr Hoff and the third defendant are not parties to that motion. The terms of my order on 11 May 2006 leave it open for them to argue that they did not have to agree or consent to the registration of the transfer. Whilst that reservation is still alive it is premature to deal with that motion. Although the first, fourth and fifth defendants are prepared to register the transfer they are not prepared, or it was not clear whether they were prepared, to consent to judgment. There is also the issue of costs and whether Pendant Software was entitled to commence the proceeding having regard to the qualified resolution on 4 May 2006. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | interlocutory application to restrain defendant from taking any further step in a proceeding/application in the takeovers panel interlocutory application for orders to dismiss or stay court proceeding pre-emptive rights regime under company constitution takeover offer whether it is within discretion of directors to refuse to register acceptance of shares for reason that may prevent a higher bid where application made to takeovers panel whether same substratum of facts before takeovers panel and the court whether declaration by the takeovers panel would render proceeding in court nugatory role of the takeovers panel under the corporations act corporations |
The application before the Federal Magistrate sought judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') made as long ago as 4 May 2000. The Tribunal affirmed a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs made on 30 June 1999 to refuse to grant a protection visa to the applicant. 2 The applicant is a citizen of the People's Republic of China. The essence of his claim for refugee status was based upon a dispute with local authorities over non-payment of money owed to him for construction work carried out on a building owned by the police. He claimed that he was threatened and beaten by the police. The Tribunal found that the applicant's claims lacked a Convention nexus as they were based on a contractual dispute over non-payment of money for services rendered. 3 Before the Federal Magistrate the respondent Minister sought dismissal of the application on the basis that the proceedings were an abuse of process. 4 The applicant had challenged the decision not to grant him a protection visa on a previous occasion in this Court. On 4 August 2000 Hely J dismissed an application for review of the Tribunal's decision on the basis of non-attendance ([2000] FCA 1138). It was not until 13 October 2005 that the applicant sought review of the Tribunal's decision in the Federal Magistrates Court. 5 Before the Federal Magistrate the applicant claimed that he had not been prepared to attend the hearing in the Federal Court back on 4 August 2000 without the assistance of his migration agent, and that he was unable to find that person on the day. He had done nothing apparently by way of attempted further review of the Tribunal's decision since, and no evidence was provided relevantly of any proactivity of any kind by the applicant since 4 August 2000. The applicant claimed nevertheless that the Tribunal committed jurisdictional error in circumstances where it unreasonably and without probative evidence found that the applicant's dispute was 'a one off culmination of particular social and political factors'. No particulars were provided to support the claim. 6 The Federal Magistrate found that having regard to the absence of evidence by the applicant of any attempt by him to seek any advice, or to pursue any rights he might otherwise have had in respect of his application, until 13 October 2005, that being some 5 years after Hely J dismissed his original application, the overwhelming inference was that the application for review before him was for the purpose of extending the applicants' stay in Australia. The Federal Magistrate found that there appeared to be no reasonable prospect of success of his application placed before the Court, and in those circumstances, the Federal Magistrate dismissed the application as an abuse of process. 7 In support of the application for leave to appeal, the applicant filed an affidavit claiming, inter alia , that he had changed his address in July 2000 and had so informed the respondent Minister's department, yet documents were still sent by the department to his former address. He said that he did not receive the court book prepared for the Federal Magistrate proceedings, and hence '[s]o I did not appear in the Federal Court'. The applicant also filed a draft notice of appeal claiming that the Tribunal failed to consider and properly exercise its discretionary power provided by the Migration Act 1958 (Cth) and that the Federal Magistrate had 'failed to consider the Tribunal decision [had] no basis for making such a statement'. It became immediately evident that his case in this Court was purportedly related to purported merits of his original review application of the decision of the Minister's delegate launched some six years ago. 9 It quickly became evident to the Court that the 'appeal' had no prospects of success and constituted an abuse of the Court's processes, no conceivable reason being at least proffered for the non-attendance in the proceedings before Hely J on 4 August 2000. 10 The application for leave to appeal was accordingly dismissed and I ordered that the registry not receive for filing any further process from the applicant. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | no point in principle migration |
I propose to deal with them briefly, despite having received lengthy submissions from the parties that referred me to quite a number of cases. In the end the authorities are of marginal assistance only. Each case has its own peculiar facts that bear upon costs and it is difficult to translate the facts from one to another. 2 First I will deal with the claim against Ms Manning. To recapitulate, if recapitulation be necessary, the plaintiffs sought to recover from Ms Manning damages which they assessed at around $4.3 million on the basis of alleged breaches of contract, breaches of the Corporations Act 2001 (Cth) and breaches of fiduciary duty. The trial occupied six days and a further three days were spent on the assessment of damages. In the result, Arrive Wealth Management obtained an order for compensation in the amount of $45,000. The claim by AMP Services was dismissed. Arrive Wealth Management now seeks an order that Ms Manning pay its costs (AMP Service's costs cannot be covered because it failed on its causes of action) on a party and party basis, with no reduction pursuant to O 62, r 36A. 3 I can put to one side O 62, r 36A, the principal purpose of which is to discourage plaintiffs from prosecuting small claims in the Federal Court. Here the claims which the plaintiffs pursued were for the most part reasonably complex although, apart from one, they did not find favour with me. Nevertheless, all the claims were bona fide, were seriously put and strongly argued. Moreover, the claims were sufficiently complex to warrant the retention of senior counsel on both sides. It would be inappropriate to allow O 62, r 36A to act as a deterrent in such cases and I will make an order that the costs ordered to be paid not be reduced by reason of this rule. 4 On the other hand I am a strong proponent of the view that while costs should ordinarily should follow the event, if the successful party has failed on issues that have taken up significant time or put the opposition to considerable expense the successful party should be deprived of the costs that relate to those issues. Indeed, in some cases the successful party might even be ordered to pay the other party's costs. If courts begin to adopt this approach more readily than in the past, it will force parties to concentrate their attention on those causes of action or lines of defence that are worth pursuing and eschew a scattergun approach to litigation. This will result in the more efficient conduct of litigation, the cost of which is now all but prohibitive. 5 This is not to suggest that it will always be easy to apportion costs between successful and unsuccessful issues. Often the task will only be impressionistic. But that difficulty should not stand in the way of an apportionment order. Even if the judge makes a rough and ready estimate of the time spent on unsuccessful issues the result should be fair. 6 In this case I do not think Arrive Wealth Management should recover all its costs. That would not be a just reflection of the outcome of the case. In my view Arrive Wealth Management's costs should be reduced by a factor that takes into account the time taken in pursuing claims in which it failed, particularly its claim in damages. Indeed, if Arrive Wealth Management's money claim had been kept within reasonable bounds it is likely that the case would have been compromised. In all the circumstances it is reasonable, in my opinion, to reduce Arrive Wealth Management's costs by 25 per cent. 7 The claim against Ms Harkness gives rise to different considerations. In my reasons I said that the claim against her was hopeless and that I would consider awarding costs in her favour on a solicitor and client basis. I am still minded to take that course notwithstanding the strong submissions made by the plaintiffs that Ms Harkness should only recover costs on a party and party basis. The plaintiffs' claim against Ms Harkness can only be described as speculative. There was no direct evidence implicating her in any wrongdoing and the inferential case was less than borderline. I trust the order will discourage other litigants from bringing hopeless actions. 8 There will be orders that Ms Manning pay 75 per cent of Arrive Wealth Management's costs and that the plaintiffs pay Ms Harkness' costs on a solicitor client basis. | speculative action solicitor and client costs awarded o 62 r 36a not applicable where claims are bona fide and complex costs apportioned between issues costs |
The motion is supported by an affidavit of Natalie Jane Wigg sworn 16 January 2008 deposing to the applicant's belief that there are reasonable grounds to appeal. The grounds of appeal are set out in a draft Notice of Appeal dated 16 January 2008. The first respondent, Oil and Natural Gas Corporation Limited ("ONGC") has filed an affidavit sworn on 7 February 2008 by its solicitor Mr Dean Edward Grondal. It contains matters concerning the pending arbitration proceedings commenced in India by Clough against ONGC in which various very substantial claims are made arising from the Construction Contract to which I refer below. The formal contract was made on 6 January 2005. It is a lump sum contract in excess of US$215 million and is for the development of certain oil and gas fields in the Krishna Godavari Basin located off the coast of the State of Andhra Pradesh in India. Additionally, onshore facilities were to be constructed at Odalarevu, near Amalapuram also in Andhra Pradesh. Clough is an Australian company. ONGC is an Indian company. 3 By instruments dated January 2005 ("performance guarantees"), each of the second to fourth Respondents ("Banks") equally between them guaranteed the payment of 10% of the contract price to ONGC. This equated to a little more than US$21.5 million. 4 ONGC made demands upon the Banks under the performance guarantees, on 4 June 2007. On the same day the Construction Contract was purportedly terminated by ONGC. This injunction was extended on 12 June 2007 and on 19 June 2007, following an inter parties hearing, when an application by the Banks to discharge the injunction was dismissed. (b) On 7 June 2007 an ex parte interim injunction was granted against ONGC restraining it from taking further steps to demand or obtain payment, or renewing such claims or demands, from the Banks under the performance guarantees. The injunction was extended on 12 and 19 June 2007. (c) On 7 June 2007 ex parte orders for leave to serve ONGC ex juris were made. The Amended Application be set aside. The service of the Amended Application on the First Respondent be set aside. Order 2 made by the Court on 7 June 2007 be discharged. The injunction granted against the First Respondent on 7 June 2007, as extended on 12 and 19 June 2007, be discharged. The injunctions granted against each of the Second, Third and Fourth Respondents, on 5 June 2007, as extended on 12 and 19 June 2007 be discharged. This irrevocable Performance Bank Guarantee shall be drawn in favour of the Company and shall be valid initially up to a period of Scheduled Completion Date for the Works of the Contract and warranty period plus sixty (60) days. 3.3.2 In the event completion of Works is delayed beyond the Scheduled Completion Date for any reasons whatsoever, the Contractor shall get the validity of the guarantee suitably extended so as to make it valid for 12 months plus 60 days from the actual date of completion of Works. However if the delay is attributable to the Company, Company shall bear the cost of extension of such Performance Guarantee for such extended period at the normal bank rates as applicable to International Banking procedures. 3.3.3 The Company shall have the right under this guarantee to invoke the Banker's guarantee and claim the amount there under in the event of the Contractor failing to honour any of the commitments entered into under this Contract . In case Contractor fails to furnish the requisite Bank Guarantee as stipulated above, then the Company shall have the option to terminate the Contract and forfeit the Bid security amount and no compensation for the Works performed shall be payable upon such termination. Upon completion of Works the above said guarantee shall be considered to constitute the Contractor's warranty for the Work done by him or for the Works supplied and their performance as per the specifications and any other conditions against this Contract. The warranty shall be in force for 12 months, from the completion date as provided in Clause 5.10.2 & 5.10.3. 10 I found that Clough was admittedly in breach of the construction contract in certain respects. The first concerned whether Clough was in breach of cl 3.3.2 in failing to extend the validity of the performance guarantees so as to make them valid for 12 months plus 60 days from the actual date of completion of the Works. The second was whether Clough was in breach of cl 7.3.8 of the Construction Contract in failing to deliver to ONGC copies of the relevant insurance policies or Certificates to the effect that all premia under the policies had been paid, indicating the validity of the policies. These certificates were referred to in the reasons for judgment as Certificates of Insurance: Clough Engineering Ltd [No 3] at [88], this being the generic description used in cl 3.2.1 of the Construction Contract. 12 Findings were made that the actual date for completion of the Works had, by agreements made between the parties, twice been extended beyond the Scheduled Completion Date: firstly to 31 January 2007: Clough Engineering Ltd [No 3] at [67] and [80] and secondly to the end of April 2007: [70] and [81]. 13 The performance guarantees were never extended by Clough and it did not deliver copies of the insurance policies or Certificates of Insurance to ONGC. 14 I concluded that Clough was in actual breach of the Construction Contract in both respects and the fact that the requirement for extensions of the completion date may have arisen from delays caused by ONGC, did not affect Clough's obligation to renew the guarantees: Clough Engineering Ltd [No 3] at [91]-[94]. I also found that in those circumstances there could be no question of ONGC having acted unconscionably in contravention of s 51AA of the TPA in making demands under the performance guarantees: Clough Engineering Ltd [No 3] at [95]-[96]. Accordingly leave to appeal is required pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth). The decision whether to grant leave or not involves an exercise of judicial discretion. 16 The well known test generally applied is whether the decision below is attended by sufficient doubt to warrant it being reconsidered by an appellate court and whether substantial injustice would result if leave to appeal were refused, supposing the decision to be wrong: Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, 398, 400. 17 The judgment, whilst interlocutory, is one on points of substance and not merely practice or procedure. A distinction is drawn between these: Yap v Granich & Associates [2001] FCA 1735 at [6] ; Dunstan v Orr [2007] FCA 873 at [6] ; see also Visy Industries Holdings Pty Limited v Australian Competition and Consumer Commission (2007) 161 FCR 122 at [39] per Lander J with Moore J concurring. 18 In Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572 ; [2000] 104 FCR 564 at 584 [43] French J with whom the other members of the Court agreed, said that a "prima facie case exists for granting leave to appeal" if the judgment, although interlocutory, has the practical operation of finally determining the rights of the parties. 21 This, of itself would, in my opinion, ordinarily activate a grant of leave. Clough's case as to the proper construction of cl 3.3.3 is that the right to invoke the guarantee is conditioned upon the contractor, Clough, failing to honour any of its commitments, which is a question of fact. The provision, it submits, contains an implied negative stipulation that, if Clough has honoured its commitments, then ONGC will not invoke the guarantee. It is not enough, Clough submits, for ONGC to make a call on the guarantees based on a belief, bona fide or otherwise, that there has been a breach. Accordingly, findings of demonstrated breach do not offend Clough's construction. 23 Clough contends, however, that it is sufficiently arguable that it was not in actual breach in either respect. 24 It contends that, contrary to my findings, there was no agreement to extend the date for completion to 31 January 2007: Clough Engineering Ltd [No 3] at [67] and [80] nor to the end of April 2007: at [70] and [81]. This, accordingly, was at a time after the second extension agreement as found. This fact, it says, was not considered in the reasons. It says that on 4 September 2006 ONGC purported, unilaterally, to extend the time for completion until 13 April 2007 although wrongly reserving a right to claim liquidated damages. It says that there was no agreement at all about this completion date but that it was arbitrally selected by ONGC, without consultation. It points to its letter of 20 September 2006 to ONGC in which it made clear that time had not been agreed to be extended until 13 April 2007. It points to its evidence that, as a result of ONGC's delay and breach in effecting well-completion, the Works were not capable of being completed by 13 April 2007 and the parties thereafter engaged in attempts to negotiate a new completion date but that nothing final was agreed. It contends that the Construction Contract does not give ONGC a unilateral right to extend the time for completion; that the time for completion was accordingly at large and that the project in those circumstances required to be completed in a reasonable time. 26 Clough also submits that, even if there was an obligation upon it to extend the performance guarantees, it was not in breach of such an obligation. All that was required in those circumstances, it submits, was for it to extend the guarantees prior to their expiry on 14 June 2007. However, each Bank was called on by ONGC on 4 June 2007 which was prior to their expiry. This was the same day that ONGC purported to terminate the Construction Contract. Clough still had, at that time, it submits, until 13 June 2007 to comply with any such obligation. It had not, Clough says, unequivocally refused to extend them. The obligation under cl 3.3.2 is not so conditioned. This is an important question which is now raised. 28 I held that the obligation to extend the performance guarantees was to do so within a reasonable time from the date of each variation: Clough Engineering Ltd [No 3] at [82]. However, there was no finding as to what in this particular case was a reasonable time. Clough submits that a reasonable time was any time sufficient to ensure the continuity of the guarantees or in other words at any time prior to their expiry. 29 As to that first basis for my finding that Clough was in breach which entitled ONGC to call on the performance guarantees I consider in the above circumstances that it is attended by sufficient doubt as to warrant its reconsideration by a Full Court. It follows that in these circumstances the conclusion that it was not even arguably unconscionable on the part of ONGC to call up the guarantees is also attended by sufficient doubt so as to warrant its reconsideration. These were to maintain cover in certain respects from the commencement of the Works until the date of issue of the Certificate of Completion and Acceptance and in certain other respects during the guarantee period. It shall be the responsibility of the Contractor to pay the premium in time and to keep the policies of insurance, as required by the Contract, valid throughout the period of execution of Works. The Contractor shall wherever required produce to the Company the policy(ies) of insurance. . . . The Contractor shall produce a certificate from insurance company to the effect that all premia under the policy have been paid and indicating validity of the policy. I found that it was entirely reasonable at the time of the call on the performance guarantees for ONGC to infer from the non-provision of copies of those policies or the Certificates of Insurance to it that Clough had failed to honour its obligation to secure their extension. There was, Clough submitted, no more than a technical breach of the contractual provision. The Court failed, it said, to consider first the fact that the policies had been renewed and secondly that ONGC's remedy, within the context of the contract as a whole, pursuant to cl 7.3.9, in the event that Clough failed to take out and/or keep in force insurance policies, was to obtain its own insurance and to retain the amount of the premium from monies owing to Clough. I note that this remedy is one to be availed of by ONGC "at its option" and in any event is predicated upon failure to have insurance policies in place, not failure to provide copies of the policies or to provide Certificates of Insurance. It submits that the alleged breach was not sufficiently material to ground a call on the performance guarantees or alternatively, if it was, then it was unconscionable in all of the circumstances for ONGC to purport to rely on such a breach, to make such a call. It was also unconscionable, it submits, for ONGC, in these circumstances, to maintain the call. This last submission is a new point not raised before. 35 I am persuaded that there is sufficient doubt attaching to the finding that this breach, considered in isolation, entitled ONGC to make a call under each of the guarantees to their full extent. It might conclude that there was a serious issue to be tried or a prima facie case in either or both of those respects. In that event, the context in which the Full Court would consider the question of the balance of convenience would be different from that considered at first instance. 37 I referred expressly to this in my reasons: Clough Engineering Ltd [No 3] at [102] and [128]. My considerations on the matter of the balance of convenience were directed principally to financial and reputational matters. There was no suggestion of any error arguably arising in relation to those findings. 38 So far as ONGC's position is concerned, it would undoubtedly be entitled to claim interest on the monies secured by the performance guarantees pursuant to Clough's undertaking as to damages. It was not contended that Clough would not have the capacity to pay such an amount. Conversely, any claim made by Clough in the Indian arbitration proceedings, dependent upon failure in this Court to restrain payment under the performance guarantees, arguably would not embrace any claim for interest. Such a claim, on one view, is expressly excluded by cl 1.3.2 of the Construction Contract dealing with arbitration. If so, it represents a considerable amount which cannot be recovered. By that clause neither party to the Construction Contract is entitled to interest on the amount of any award. It is not clear, and there was no argument before me, as to whether, despite this term, an award could include an amount of interest under a particular head of claim as distinct from interest running on the amount of the award itself. 40 It submits that this distinguishes this case from those contemplated in Johnson Tiles at [43]. The "practical operation" of the judgment, it says, is not to determine finally the rights of the parties because the proper construction of cl 3.3.3 of the Construction Contract and the entitlement of ONGC to call upon the performance guarantees are all live issues, amongst others, in the arbitration proceedings. Further ONGC, through counsel, undertook to the Court that it would not raise the judgment of this Court as any barrier to those issues being determined again in the arbitration. That is not to say that the judgment of this Court would not be pressed on the Indian Arbitrators by ONGC as carrying considerable weight. 41 The view I take is that the judgment has the practical effect of determining the parties' rights. It is no answer to say that a different result might ensue in a different proceeding in another jurisdiction which could have the result of restoring the position of Clough. 42 In any event, if an appeal were successful it would not be necessary to prosecute that aspect of Clough's claims in the arbitration. The effect, then, of the submission is that the arbitration proceedings provide Clough with a de facto appeal. In my opinion, Clough ought be entitled to exhaust its legal entitlements in this Court. 43 Leaving aside the interest question to which I have referred, although this may bear on the question of whether or not a substantial injustice would arise, assuming my decision to have been wrong, I am of the view that a party against whom a substantial judgment has been made, as is the case here, assuming the decision to be wrong, will for that reason alone suffer a substantial injustice. 44 I would grant leave to appeal generally and stay execution of the orders made on 21 December 2007 pending the determination of the appeal from my judgment of that date. I would additionally, upon the applicant's undertaking as to damages, extend the injunctions granted by paragraphs 4 and 5 of the order made on 19 June 2007, again until the determination of the appeal. 45 In the circumstances I would also make an order that the appeal be expedited. 46 Costs should be reserved. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | orders discharging interlocutory injunctions injunctions to restrain calling upon and payment under performance guarantees application for leave to appeal application for stay of execution of orders and extension of injunctions pending determination of appeal. application for leave to appeal orders discharging interlocutory injunctions construction of contract construction of performance guarantees validity of demands under performance guarantees unconscionable conduct s 51aa trade practices act (1974) (cth). injunction appeal |
In the judgment below, his Honour dismissed Mr Slaveski's application to set aside a bankruptcy notice served on him on behalf of the respondent company; see Slaveski v Rotstein [2009] FMCA 443. On 13 May 2008, the respondent served a bankruptcy notice on Mr Slaveski in respect of the costs order. On 30 May 2008, Mr Slaveski applied to the Federal Magistrates Court for the bankruptcy notice to be set aside. On that day Registrar Luxton extended the time for compliance with the bankruptcy notice. Several further extensions of time were granted throughout 2008. On 17 November 2008, Registrar Luxton dismissed Mr Slaveski's application to set aside the bankruptcy notice. On that day, Mr Slaveski countered with an application to set aside that dismissal. It was the rejection of that application which has led to the current appeal. The sum of $7,115.90 awarded against Mr Slaveski on 1 April 2008 was the costs ordered against him by the Magistrates' Court of Victoria in the course of a proceeding commenced by the respondent to recover unpaid professional fees from Mr Slaveski for legal services. The costs judgment was upheld by the Supreme Court of Victoria on 3 April 2009; see Slaveski v Rotstein and Associates Pty Ltd [2009] VSC 111 (" Rotstein and Associates "). His Honour also referred to a claim by Mr Slaveski "against Mr Rotstein" in the Victorian Civil and Administrative Tribunal ("the VCAT claim"). Mr Rotstein is the sole director of the respondent. The VCAT claim is for $98,000 for stress, including mental stress, caused allegedly by Mr Rotstein in the course of acting for Mr Slaveski. Mr Slaveski's desire, his Honour observed, was to adjourn the proceeding concerning the bankruptcy notice until after the conclusion of the CBA proceeding and VCAT claim, but in particular the CBA proceeding. His Honour referred to three matters put by Mr Slaveski to support his application to set aside the bankruptcy notice. They were: the VCAT claim for $98,000 (referred to as a "counterclaim"); the application by Mr Slaveski for an instalment order in respect of the judgment sum of $7,115.90; and the judgment for $7,115.90 was obtained by conspiracy. The Court below referred to s 40(1)(g) of the Bankruptcy Act 1966 (Cth) in the context of compliance with the bankruptcy notice not being required if there exists a cross demand equal to or in excess of the judgment debt which could not have been raised in the proceeding which led to the debt. His Honour considered that the VCAT claim did not raise a tenable cross-claim against the respondent. It now appears that, subsequent to the judgment below, the matters raised in the VCAT claim were the subject of a counterclaim filed by the appellant in the Magistrates' Court of Victoria proceeding on 12 August 2009. Next, his Honour said that the application by Mr Slaveski to pay the judgment debt of $7,115.90 by instalments constituted an acknowledgement of that debt. In addition, Burchardt FM observed that a desire to pay by instalments does not constitute a cross demand. On the issue of the judgment debt being fraudulently obtained, his Honour referred to the judgment of Smith J in Rotstein and Associates , where the Supreme Court held the costs order was reasonably open and that no error was made in its making. Federal Magistrate Burchardt considered the CBA proceeding to be extraneous to the proceeding to set aside the bankruptcy notice. His Honour said that no valid ground had been established to set aside the bankruptcy notice either by reference to ss 40(1)(g) or 41 of the Act. The Federal Magistrate dealt at [52]---[55] in his reasons for judgment with what he called the "bias issue". His Honour referred to his disclosure to Mr Slaveski that he owned a small tranche of shares in the CBA. His Honour understood Mr Slaveski not to object to him hearing the application but said that, had the objection been pressed, he would not have disqualified himself. His Honour maintains that no application was made for him to disqualify himself. In any event, his Honour said he would refuse to do so if one were made. That approach was correct only for the reason that any issue concerning the CBA was irrelevant to whether there was any valid basis to set aside the bankruptcy notice. The CBA is not the respondent to this appeal or an entity which is concerned in the costs order which has given rise to the bankruptcy notice. Even if the Federal Magistrate had more than a small tranche of shares in the CBA, he would not have disqualified himself for a valid reason had he stood down from hearing the application. Mr Slaveski raises other issues in his notice of appeal which are said to relate to a denial of natural justice and bias in the Court below. None of them relate to any issue of relevance or any aspect of the judgment below which reveals any appeallable error. That is not so, as can be seen from [8]---[9] of these reasons. However, was his Honour correct in determining that the VCAT claim did not raise a tenable cross-claim against the respondent? The claim in VCAT for $98,000 was issued on 20 April 2009. Mr Slaveski has not demonstrated that the matters he sought to raise in VCAT against Mr Rotstein "could not have [been] set up in the action or proceeding in which the judgment or order was obtained"; see s 40(1)(g) of the Act. The costs order which led to the bankruptcy notice was made in a proceeding in the Magistrates' Court of Victoria for unpaid legal fees. The VCAT claim concerned the relationship between Mr Slaveski as client and the respondent as solicitor. No explanation has been given for the failure by Mr Slaveski to bring a cross-claim in the Magistrates' Court of Victoria proceeding, prior to 12 August 2009. Consequently s 40(1)(g) of the Act does not operate to assist Mr Slaveski to set aside the bankruptcy notice. In any event, Burchardt FM considered the VCAT claim to be untenable. His reasons for coming to that view are set out at [24] of his judgment where he recites the basis for the claim being that Mr Rotstein "caused [Mr Slaveski] to suffer a lot of stress, including mental stress". To be a claim that may have been set up as a cross-claim, the claim must be a genuine or bona fide claim, with a fair chance of success; see Re Glew; Glew v Harrowell of Hunt & Hunt Lawyers [2003] FCA 373 ; (2003) 198 ALR 331 ; [2003] FCA 373 at [9]---[11] per Lindgren J. It was open to his Honour below to make that assessment about the merits of the VCAT claim. Mr Slaveski also alleges, wrongly, that the Federal Magistrate did not take into account Mr Slaveksi's application to pay the judgment debt in instalments. However, as his Honour observed, that application is an acknowledgement of the debt. Finally, and again incorrectly, Mr Slaveski alleges that his Honour did not take into consideration his allegations of conspiracy. These allegations were outlined at [46] of his Honour's reasons. No issue was taken on appeal with their conclusive disposal by Smith J in the Supreme Court of Victoria. As Mr Slaveski has not demonstrated that he has a cross-claim, set off or cross demand against the respondent company and has no other valid basis upon which to apply to set aside the bankruptcy notice, the Court below was correct to dismiss his application to have it set aside. Accordingly, the appeal is dismissed. Mr Slaveski is to pay the respondent's costs of the appeal. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | bankruptcy notice appeal from decision of federal magistrate refusing to sent aside a bankruptcy notice whether appellant had a valid counterclaim whether application for instalment order sufficient to set aside bankruptcy notice relevant of other proceedings commenced by applicant against third parties no counterclaim for purposes of s 40(1)(g) of the bankruptcy act 1966 (cth) no basis for setting aside bankruptcy notice federal magistrate correct in refusal to set aside notice apprehended bias appellant engaged in other proceedings against large publicly listed company where federal magistrate disclosed small shareholding in company whether reasonable apprehension of bias other proceedings irrelevant no basis for federal magistrate to disqualify himself bankruptcy and insolvency practice and procedure |
2 The Appellant arrived in Australia on 3 March 2007 and applied to the Department of Immigration and Citizenship for a Protection (Class XA) Visa on 29 March 2007. A delegate refused to grant that visa on 27 April 2007. In refusing the application the delegate noted that the applicant claimed to be a " thirty one year old homosexual Indian Punjab Sikh male " and that Indian society was hostile to homosexuality. 3 An application for review of the delegate's decision was lodged with the Refugee Review Tribunal on 8 May 2007. The Tribunal by way of a decision signed on 15 August 2007 affirmed the delegate's decision. It may be easy to assert such claims, yet difficult for applicants to substantiate and for decision-makers to evaluate them. By their very nature, they involve private issues of self-identity and sexual conduct, and sometimes personal issues for individuals that may be stressful or unresolved. Social, cultural and religious attitudes to homosexuality in an applicant's society may exacerbate such problems. With these issues in mind, the Tribunal explored with the applicant a wide range of circumstances relevant to its assessment. These included his self-identity; his self-disclosure and others' perceptions of him; his past experiences; his knowledge of and association with other homosexuals; his relationships and personal contacts; and incidental evidence. Assessment of the applicant's claims The Tribunal finds on the available material that the applicant is not a homosexual and that he will not be perceived as such. 4 An application to review that decision of the Tribunal was dismissed by the Federal Magistrates Court on 4 March 2008: SZLJN v Minister for Immigration & Citizenship [2008] FMCA 352. 5 The Appellant now appeals to this Court. The Honourable Federal Magistrates Court erred in interpreting the construction of s424A of the Migration Act 1958 ('the Act"). 2. His Honour failed to determine that the purpose of s424A was not served in the proceeding of this applicant. 3. The Honourable Court also erred in law determining that the Refugee Review Tribunal ("the Tribunal") was in a breach of procedural fairness. 4. Additional details will be provided later. No " Additional details " have been provided. The Appellant appeared before this Court unrepresented, albeit with the assistance of an interpreter. He was unable to provide further clarification as to what was intended to be conveyed by the Grounds of Appeal . 6 It is considered that the appeal should be dismissed. (2) The information and invitation must be given to the applicant: (a) except where paragraph (b) applies--by one of the methods specified in section 441A ; or (b) if the applicant is in immigration detention--by a method prescribed for the purposes of giving documents to such a person. (2A) The Tribunal is not obliged under this section to give particulars of information to an applicant, nor invite the applicant to comment on or respond to the information, if the Tribunal gives clear particulars of the information to the applicant, and invites the applicant to comment on or respond to the information, under section 424AA. (3) This section does not apply to information: (a) that is not specifically about the applicant or another person and is just about a class of persons of which the applicant or other person is a member; or (b) that the applicant gave for the purpose of the application for review ; or (ba) that the applicant gave during the process that led to the decision that is under review, other than such information that was provided orally by the applicant to the Department; or (c) that is non disclosable information. 8 Section 424A(1) employs the term " must " and compliance with that provision is, accordingly, 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. 9 Compliance with s 424A must necessarily be judged by reference to the facts as they emerge in each individual case. In the present proceedings the Tribunal wrote to the now Appellant on 25 July 2007 inviting him to comment upon the matters raised in that letter. You also gave details of your parents that correspond with the information on your passport and in your protection visa application. However, your protection visa application states that you are unmarried. This information is relevant because it may raise questions about your sexuality, and about the truthfulness of the information you provided in your protection visa application. This letter plainly invited the now Appellant to comment upon matters centrally relevant to the final decision of the Tribunal. But no response was received to that letter. Nor has it been possible to discern any error. In his application the applicant repeated his claim that the Tribunal breached procedural fairness in making a decision, and also breached the provisions of s 424A of the Migration Act . The applicant did not file a written outline of submissions, or an amended application. He did, however, attend Court. When asked by the Court to expand on his claims, the applicant complained that he had not received procedural fairness because his story that he told the Tribunal was true, but the Tribunal did not believe him. The applicant was not able to give any particulars of his claim of a breach of s 424A of the Migration Act . It is clear that the applicant's grievance with the Tribunal is the Tribunal's failure to accept the truthfulness of his evidence. He asked the Court to remit his matter to the Tribunal so that another hearing could be conducted. As to the alleged breach of s 424A of the Migration Act , the applicant had provided no particulars in support of the ground. It is also submitted that the Tribunal complied fully with the requirements of s 424A. 23. In dealing with the applicant's claims, I would indicate first of all that I am unable to see how it was that the applicant did not receive procedural fairness. He was invited to attend the hearing. In the letter inviting him to attend a hearing the Tribunal made it clear that the information that it had was not sufficient to make a decision in his favour. The applicant attended the hearing, and there is nothing to suggest that he was unable to give his evidence. He was provided with an interpreter and there was no complaint made about difficulty with interpreting. The Tribunal had written to the applicant under the provisions of s 424A of the Migration Act putting certain matters to him, but the applicant did not provide any comments on that letter. 24. I am mindful of the fact that s 422B of the Migration Act applies to these proceedings. The fact is that the applicant has not made out any breach of procedural fairness, either under the Act or at common law. There is nothing to indicate that the Tribunal proceedings were in any way unfair. In respect of the second ground the applicant had not provided any particulars to show why the Tribunal had not complied with the provisions of s 424A of the Migration Act as he claims. Indeed, it is clear that the evidence which the Tribunal considered to be weighty was put to the applicant for his comment in a letter written under the provisions of s 424A of the Act, and handed to the applicant after the conclusion of the hearing. The applicant could have replied to that letter and provided comments, but apparently chose not to. 25. I am not of the view that the applicant has shown any breach of s 424A of the Migration Act . I am not of the view that the Tribunal did not give the applicant natural justice as he claims in his application. I am not of the view that there is any breach of procedural fairness. The applicant's grounds in his application and the ground in his affidavit must therefore fail. I am mindful of the fact that the applicant is not legally represented in these proceedings. I have read through the Tribunal decision independently of either the applicant's application or the Minister's submissions. 11 This Court is in no better position than the Federal Magistrates Court. 12 The error in " interpreting the construction of s 424A " has not been explained. The letter inviting the now Appellant to comment upon the " information " therein identified was separately considered and no breach of s 424A is otherwise discernible. The ground as advanced before the Federal Magistrate by the now Appellant provided neither that Court nor this Court with any further clarification as to what was intended to be conveyed. Before the Federal Magistrates Court, the ground was simply expressed as: " The Tribunal breached s 424a of the Migration Act 1958 ". 13 Grounds 1 and 2 of the Notice of Appeal are therefore dismissed. 14 Nor has there been any further explanation as to the manner in which it is said that the Appellant has been denied procedural fairness. None can be discerned. Section 425(1) of the Migration Act provides for an applicant to be extended an invitation to appear before the Refugee Review Tribunal. The right conferred by this provision is " clearly an important and central right in the merits review system established by Pt 7 of the 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. 15 The now Appellant appeared before the Tribunal at a hearing conducted on 25 July 2007. The " RRT Hearing Record " discloses that the hearing commenced at " 11:38am " and concluded at " 14:15 " and that there was a short adjournment from 1:38pm to 2:04pm. Considerable time, it would appear, was taken in pursuing with the now Appellant the claims then being advanced. 16 A reading of the reasons for decision as provided by the Tribunal similarly records the manner in which the hearing proceeded and records in considerable detail the questions asked of the now Appellant and his responses. Although not decisive, when asked at the hearing of the appeal what it was he alleged that the Tribunal had done wrong, the now Appellant's response was simply that " The Tribunal didn't believe my refugee claim ". But the resolution of the merits of the claims then advanced was for the Tribunal to determine. It is not the function of either the Federal Magistrates Court or this Court to revisit those findings of fact. 17 There is no basis for concluding that the hearing undertaken by the Tribunal was anything other than a fair and meaningful opportunity for the now Appellant to present his claims and to make submissions. 18 This ground is also dismissed. APPLICATION TO AMEND AND TO ADJOURN? 20 Leave to amend was opposed by Counsel for the Respondent Minister upon the basis that the ground raising " jurisdictional error " was unparticularised (other than alleging a further unidentified " error of law ") and that the grounds either raised no issues different to those in the existing Notice of Appeal , or had no prospects of success. An amendment, such as that proposed, which is ambiguous and raises nothing of substance, will not be permitted: Australian Broadcasting Commission v Parish [1980] FCA 33 ; (1980) 29 ALR 228 , 43 FLR 129. 21 Those submissions of Counsel for the First Respondent were accepted and leave to amend was consequently refused. 22 A further reason for refusing leave to amend was the concern of the Court that the proposed amendments were obviously drafted by someone other than the Appellant, who (not surprisingly) had no knowledge of either what was intended to be conveyed by the concept of " jurisdictional error " or the " information " which, it was contended, should have been conveyed pursuant to s 424A. The Appellant could thus provide no assistance to the Court as to what was intended to be embraced by the proposed amendments which was not otherwise within the existing Notice of Appeal. The central principle is to do justice between the parties: Londish v Gulf Pacific Pty Ltd [1993] FCA 470 ; (1993) 45 FCR 128. The " starting point is that all of such amendments should be made as are necessary to enable the real questions in controversy between the parties to be decided ": SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 4 ) [2007] FCA 1035 at [14] per Edmonds J. 24 An unrepresented appellant, in particular, should have no unnecessary impediment placed in his path. But it is considered that this Court should be cautious in too readily permitting amendments to be made at the last minute in respect of appeals from decisions of the Federal Magistrates Court dismissing applications to review decisions of the Refugee Review Tribunal. The need for caution arises by reason of the fact that in many appeals, as in the present appeal, the Notice of Appeal is all too frequently drafted by unidentified persons and with apparent little regard to either the decision of the Tribunal or -- more importantly -- the decision of the Federal Magistrates Court. Particularly is that the case where, as in the present case, the proposed Amended Notice of Appeal does not state " briefly, but specifically, the grounds relied upon " as required by Order 52, r 13(2)(b) of the Federal Court Rules 1979 (Cth). The lack of specificity may well be the product of the grounds being drafted without proper regard to the decision the subject of appeal. Considerable care needs to be exercised to ensure that the rights of unrepresented litigants are not prejudiced; but care also must be exercised to ensure that the processes of this Court are not abused. 25 An application was also made at the hearing for the proceedings to be adjourned to enable the Appellant to obtain legal advice. That application was opposed by Counsel for the Respondent Minister, but no prejudice was claimed in the event that the application proved to be successful. 26 An adjournment until 27 May 2008 was offered to the Appellant but declined. No further adjournment, it is considered, was appropriate. The Notice of Appeal was filed on 19 March 2008 and the Appellant had known for some time that the hearing was to take place on 21 May 2008. 27 In such circumstances the Grounds of Appeal should be dismissed. The appeal be dismissed. 2. The Appellant to pay the costs of the First Respondent of and incidental to the appeal. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | no failure to notify applicant of " information " no denial of procedural fairness meaningful hearing before refugee review tribunal application to amend refused application for adjournment refused migration |
The application made under Order 62, Rule 36A(1) be dismissed. 2. There be no order as to costs. Order 62, r 36A(1) provides that when a party recovers less than $100,000 in an action for debt or in damages, the costs will be reduced by one third unless a judge otherwise orders. The applicant seeks such an order. 2 It is not clear what factors should be taken into account on this application. In LED Builders Pty Ltd v Hope (1994) 53 FCR 10 Tamberlin J warned against allowing O 62, r 36A(1) to operate automatically because this would lead to harsh results. He did not, however, state in what circumstances he would permit a party to escape from its operation because in his case he found that the rule did not apply. 3 I do know from McCormick v Riverwood International (Australia) Pty Ltd [2000] FCA 32 that for the purposes of an application under O 62, r 36A(1) it is not relevant that the action could have been brought in another more suitable court, because that is covered by a different rule, namely O 62, r 36A(2). The first is that is it essential to keep down the costs of a small claim. Unless this principle is invoked the costs of small claims will often (perhaps more often than not) exceed the quantum of the claim. That places a very unfair burden upon an unsuccessful defendant who, in any event, will bear his own costs. The rule should encourage a plaintiff to negotiate with his solicitor and with counsel on a rate of fees that are appropriate to small claims. A benchmark may be fees charged in litigation in inferior courts, such as a District Court or a Magistrates Court. 5 The second, but necessarily subsidiary, principle is that plaintiffs should be discouraged from prosecuting small claims to judgment, especially small claims where the costs will be significantly greater than the quantum of the claim. 6 As a matter of principle I am happy to go along with the approach suggested in LED that O 62, r 36A(1) should not be applied automatically. On the other hand, some reason must be shown for the court to permit a departure from the rule. There would be good reason if the plaintiff was only seeking to recover costs equivalent to those which he could be awarded in an inferior court. There would be good reason if the nature of the claim was one that was appropriately brought in the Federal Court regardless of the damages sought. I have often heard it said, for example, that the proper place to be vindicated for a libel is by a superior court. Sometimes the importance of the issue raised by the plaintiff's case will be determinative. For example, if the case raises an important point of principle involving a difficult question of law, or is a test case, then usually the plaintiff should recover his full costs. The examples are not intended to be exhaustive. 7 Here the plaintiff says there was a commercial motive which justified the prosecution of the suit. It had sold the business and given the purchaser warranties that it owned the design and that its ownership was unchallenged. The plaintiff had also agreed to indemnify the purchaser for losses arising from any breach of these warranties. That might explain why the action was brought but, in my opinion, it does not bear on the question of costs. | applicant recovered less than $100,000 application to recover costs in full applicable principles costs |
He has a wife and two children who are still in India. He has a Bachelor of Science Degree and a Master of Science and describes his occupation as motor engineer. He has travelled out of India many times to Thailand and Indonesia for business. 2 The appellant came to Australia on 11 July 2003. On 24 July 2003, he lodged an application for a protection visa with the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA). That application was refused by a delegate of the Minister on 16 September 2003. On 15 October 2003, the appellant applied to the Refugee Review Tribunal (the Tribunal) for a review of the delegate's decision. On 28 April 2004, the Tribunal affirmed the decision not to grant him a protection visa. 3 The appellant sought judicial review of the Tribunal's decision in the Federal Magistrates Court. That application came on for hearing on 19 January 2006 and on that date, his Honour, Smith FM, dismissed the application. On 6 February 2006, the appellant filed a notice of appeal in this Court against the judgment of the Federal Magistrates Court. 4 When the matter came on for hearing, the appellant appeared on his own behalf, assisted by an interpreter. I indicated after hearing from him that his submissions merely challenged the findings of fact on the part of the Tribunal and that there was nothing in what he said or in what I had read in the reasons of the Tribunal and the reasons of Smith FM to indicate that there had been any jurisdictional error of the kind that would support an order setting aside the decision of the Tribunal or of the Magistrate. He claimed to have been entrusted with running activities for the youth wing of that party. 6 The appellant claimed that, because of his association with the party and false allegations of corruption, he was detained by police in August 2002 for a week and in the course of that detention, was beaten, humiliated and questioned about corruption on the part of Akali Dal members. He claimed also to have again been detained in January 2003 for five or six days and treated in the same way. He said that, following those events, he was frightened and knew he had to do something. He decided to move around while he tried to work out what to do. During that time his business suffered as he was not there to manage it and he had to survive on money provided by friends. He was too afraid to remain in India and he decided to seek safety in Australia. He said he was afraid of the police, who acted on orders from the government. He was afraid to return to India as he would again be detained, beaten and humiliated. 7 The Tribunal referred to his written claims in support of his application for a protection visa and also evidence that he had given at the hearing. In particular, it appeared that from his passport he had in fact been out of India in 2002 at the time at which he claimed to have been detained. When this was put to him, he said that he had been detained in July 2002, not in August. He had made a mistake in his initial application, but his migration adviser had told him not to change his story. This matter was of significance in the Tribunal's assessment of his credibility. This is particularly so since he had claimed initially to the Tribunal, in the course of the oral hearing, that he was picked up by police on 15 August 2002, which he said he remembered because it was Republic Day and he had been at a function on that day. 8 The Tribunal also put questions to the appellant regarding the level of his political activity and the fact that he could not recall the date of the election or the name of the candidate who won the seat, which he claimed to have been working on with Mohan Lal throughout the election which had occurred in February 2002. The Tribunal put to him country information to the effect that Punjab is basically peaceful and becoming prosperous, that militancy had ceased and that a majority of Punjabis had voted for the Congress Party at the last election because of concerns about corruption in Akali Dal. 9 The Tribunal put to the appellant that it had information from the Department of Foreign Affairs and Trade that no one of any concern to the authorities would be allowed to leave India legally. The appellant was given the opportunity to comment on these things. 10 The appellant provided documents at the hearing concerning his claim to membership of the All India Youth Wing of Akali Dal. One was a membership card with the name, signature and photograph of the appellant and a designation of General Secretary, dated 15 January 1998. The other was a letter dated 14 January 1998 appointing him to the position of General Secretary. The bulk of this information came from the United Kingdom Home Office in a document dated October 2003, drawn from a wide range of sources. 12 The Tribunal accepted that the appellant was and might still be a member of the All India Youth Wing of Akali Dal, and accepted that the membership card and the letter appointing him to the position of General Secretary for his local area were genuine. It did not accept that his membership of the group or his position as General Secretary of the youth wing of a local branch would bring him to the attention of the authorities. It found these activities to be locally based and of a low level and noted country information that Sikhs do not constitute a persecuted group at the present time, that rank and file members of groups at one time targeted as militant are in general terms now safe, and that people who are not high profile militant suspects are not at risk in the Punjab. The Tribunal noted that his term as General Secretary expired in January 2003. 13 The Tribunal accepted that the appellant might have known the local parliamentary member for Banghar, Mohan Lal, but did not accept that they had a close association or relationship , or that he was one of the main supporters for Mohan Lal. It did not accept, therefore, that he was detained twice by police, beaten, interrogated and treated cruelly as he claimed because of that close association or because of what he knew of the corruption of Akali Dal members. It did not accept that he was detained in August 2002 or January 2003. It referred to the evidence concerning the date of his first detention. It did not accept his explanation in relation to his error about the dates nor that his adviser told him he could not correct his evidence. The Tribunal did not accept, therefore, that following a detention, he moved around or that his business suffered or that he survived on money from friends. It found that he had only a local and low level political involvement and that he was never of any interest to the authorities or detained by the police. The Tribunal also found that because the appellant successfully departed India on numerous occasions on a passport in his own name, he was of no interest to the authorities. The Tribunal concluded that there was no real chance of serious harm amounting to persecution now or in the foreseeable future to the appellant, arising out of his low level and local political involvement with the Youth Wing of the party and that he had not been of adverse concern for authorities in the past. For example, it was said in the application that the Tribunal had relied upon various country reports in reaching its decision and had failed to disclose the time and date of those reports. It had failed to put adverse information to the appellant for his comments and therefore breached the rules of procedural fairness. The learned magistrate found that this ground had no merit. The identified paragraphs had appeared in an extract from the United Kingdom Home Office report which was extensively set out by the Tribunal. They were not relied upon as part of the Tribunal's reasoning process. It did put to the appellant aspects of the country information which it thought particularly relevant and which it did rely upon in its findings. 15 None of the grounds of review were found to have any merit. No jurisdictional error was disclosed. The Honourable Federal Magistrates Court erred in interpreting the construction of s 424A of the Migration Act 1958 ('the Act"). His Honour failed to determine that the purpose of s424A was not served in the proceeding of this applicant. The Honourable Court also erred in law in determining that the Refugee Review Tribunal ("the Tribunal") was in a breach of procedural fairness. Additional details will be provided later. He said that he could obtain further documents from India to support his position. 17 None of the appellant's remarks have identified any error of law on the part of the Tribunal and, of course, it is too late in the day for new evidence to be brought to this Court which could have been put before the Tribunal. It is not for this Court to interfere with decisions that the Tribunal has made on matters of fact. There is no basis apparent from the record for any claim of breach of procedural fairness on the part of the Tribunal or failure to comply with the requirements of s 424A. The appellant will have to pay the respondent's costs of the appeal. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | protection visa denied application for review fear of persecution indian national member of akali dal political party assessment of credibility no jurisdictional error appeal dismissed migration |
The application has been made ex parte in circumstances where, because of the lateness of the hour, I have conducted the hearing by telephone with the solicitor for the appellant being present on the telephone together with the appellant personally. 2 I am satisfied that I have jurisdiction to make orders as a single judge exercising the appellate jurisdiction pursuant to s 25(5) of the Federal Court of Australia Act 1976 (Cth) . For present purposes, and in the absence of any detailed argument, I am satisfied that my powers include a power under s 29(1)(b) to stay or suspend the operation of the sentence and that if I do so s 29A of the Act provides that the time during which the appellant is released on bail pending the determination of the appeal does not count as part of the term of his imprisonment. Pursuant to O 52 r 35(3) I have power to admit the appellant to bail pending the hearing of his appeal. I am satisfied that the Court also has inherent jurisdiction, having been seized of jurisdiction to deal with the appeal, to stay the operation of the sentence: Tait v The Queen [1962] HCA 57 ; (1962) 108 CLR 620 at 624-625. 3 The circumstances of this case show that the appellant gave an unconditional bail undertaking to appear at the District Court of New South Wales at Campbelltown at 9.30 am today and thereafter to attend at that court at such day and at such time and place as was, from time to time, specified in a notice to be given or sent to him. This undertaking was given in the context of the appellant, and those advising him at that time, understanding that the appeal from the decision of the Local Court of New South Wales sentencing the appellant to a term of six months' weekend detention lay to the District Court of New South Wales, rather than to this Court pursuant to the provisions of the Copyright Act 1968 (Cth). 4 On the basis that the appellant would have been entitled to bail tonight, pending the determination of his appeal by the District Court, it seems to me that there are sufficient circumstances to justify my making an order admitting him to bail and staying the operation of his sentence up to and including next Thursday. Then the matter can be dealt with appropriately by those representing the appellant as well as those representing the respondent, New South Wales Police Service, or any other person who may take over the conduct of the respondent's case on the appeal. The parties will then be able to debate, in an informed way, before the Court the way in which the appeal ought thereafter to proceed, the appellant's entitlement to bail, and the conditions, if any, which ought to attach to any grant of bail that might be appropriate to give to the appellant. 5 In my opinion it would not be just to require the appellant to commence tonight to serve his weekend detention having regard to the circumstances in which the matter has come before the Court that I have set out. 6 In those circumstances I propose, subject to hearing from the solicitor for the appellant as to any comments he has to make as to the form of the orders, to make orders in the terms that I have suggested are appropriate. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | bail pending appeal from court of summary jurisdiction where appellant has been sentenced to imprisonment for offences under the copyright act 1968 (cth) whether the court has jurisdiction to stay or suspend the operation of the sentence pending the hearing of an appeal against the sentence appeal |
The claim was dismissed: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 4) [2006] FCA 446. Darrell Lea now seeks an order for costs on an indemnity basis. 2 The jurisdiction to award indemnity costs under s 43(2) of the Federal Court of Australia Act 1976 (Cth) is not in dispute. The circumstances in which such an order should be made cannot be circumscribed: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 230. The usual order for costs in favour of a successful party is on a party and party basis; to justify an order on an indemnity basis (or solicitor-client basis --- the distinction is a rather murky one: Burnie Port Corporation Pty Ltd v Bank of Western Australia [2003] TASSC 132 at [17] per Underwood J) there should be some special or unusual feature in the case: Preston v Preston [1982] 1 All ER 41 at 58. Alternatively, part of Darrell Lea's costs were incurred in response to Cadbury's late filed evidence --- it should recover those costs on an indemnity basis. On 27 February Darrell Lea's solicitors wrote to Cadbury's solicitors asserting in effect that the claim was bound to fail and that indemnity costs would be sought. The letter canvassed a number of issues on which indeed, as it turned out, Darrell Lea subsequently succeeded; namely that Darrell Lea did not market moulded chocolate blocks, that its products were sold from different retail outlets, that purple was used by other chocolate manufacturers, that the words "Darrell Lea" and "Cadbury" were quite different, that Darrell Lea had been a well known brand since the 1920s, and that there was no evidence of actual consumer confusion. 5 However, the letter was not completely prescient as to the way the case unfolded. For example, Cadbury's use of purple was not confined, as the letter asserted, to moulded chocolate blocks from 1994. As the judgment finds, there was widespread use of purple by Cadbury, and in connection with chocolate blocks since the 1920s: see [15], [21], [24]-[29], [96]. Conversely, a major element in the ultimate conclusion against Cadbury, that purple was never used in isolation from the Cadbury name (see [82]-[87], [99]), was not mentioned in the letter. 6 Moreover, read as a whole the letter conveys the impression that the only relevant colour used by Darrell Lea was boysenberry, which was said to be a colour quite different from the shade of purple used by Cadbury. The finding at trial was that Darrell Lea made substantial use of a purple like the colour used by Cadbury, this being a colour distinct from the lighter shade boysenberry: see [41]-[43], [105]. I shall return to the boysenberry issue later. 7 The letter does not contain any offer of settlement, for example that if Cadbury discontinues Darrell Lea will not seek costs. It is not a Calderbank letter and is not part of any negotiation. If the letter had the effect now sought by Darrell Lea, it would become routine for litigants to write letters avowing the strength of their case and threatening indemnity costs in the event of success. Since one or other would be sure to win, indemnity costs would become the rule rather than the exception. 8 More generally, I am not satisfied that this proceeding was brought by Cadbury in "wilful disregard of the known facts or the clearly established law" ( Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401). The fact that there were, as Darrrell Lea submits, no previous cases where Trade Practices Act and passing off claims had succeeded in respect of a single colour is not conclusive; equally there were no cases where such claims had failed. 9 Disputes as to names and get-ups between rival traders constitute a familiar genre of commercial litigation. The applicable law is well settled. Questions as to the nature of the reputation enjoyed by a plaintiff and the effect of a defendant's conduct on consumers are likely to be problematic. In the present case Cadbury was obviously encouraged by the experts it had recruited. In the present case I held that most of this evidence was inadmissible: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2006] FCA 363. Judges of this Court and a learned commentator had previously expressed disquiet about evidence of this nature: Cat Media Pty Ltd v Opti-Healthcare Pty Ltd [2003] FCA 133 at [55] , Domain Names Australia Pty Ltd v .au Domain Administration Ltd [2004] FCAFC 247 ; (2004) 139 FCR 215 at [21] , Heydon, Cross on Evidence (7 th Australian ed, 2004) at 930. There had been no decision in this Court ruling directly that such evidence was inadmissible, although there had been English and Irish decisions to that effect: Dalgety Spillers Foods Ltd v Food Brokers Ltd [1994] FSR 504 at 527, Symonds Cider & English Wine Company Ltd v Showerings (Ireland) Ltd [1997] IEHC 1 at [20] . So while a litigant properly advised should have realised that there were potential problems with evidence of this kind, it would be going too far to say that seeking to tender it demonstrated wilful disregard of clearly established law. Substantial discovery and other work was done, including the issue of some 50 subpoenas at the request of Cadbury. Cadbury failed to comply with a number of orders for the filing of evidence. Darrell Lea sought an order for dismissal under O 35A r 3 of the Federal Court Rules . On 23 December 2004 Ryan J adjourned the application to enable Cadbury, if so advised, to seek leave to discontinue: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2004] FCA 1718. Subsequently his Honour granted leave to discontinue on terms that allowed Cadbury to commence a fresh proceeding no later than 7 June 2005. There was also a term that in any such fresh proceeding the parties could have the benefit of discovery already completed and documents already obtained on subpoena: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2005] FCA 112. As to costs, his Honour decided at ([5]) "(o)n a fairly fine balance" not to order solicitor-client costs because in any fresh proceeding the parties would have the benefit of the substantial work already carried out. His Honour was not able to reach a conclusion about the propriety of Cadbury's institution and maintenance of the proceeding, except for the procedural or interlocutory derelictions. These, his Honour considered (at [6]), should not attract a punitive order for costs to be taxed on the higher scale. 11 The decision of Ryan J was not appealed. Obviously I cannot make any order with respect to the costs of the earlier proceeding. Senior counsel for Darrell Lea however argued that when the present proceeding was commenced Cadbury had all the material obtained in the course of the earlier proceeding and should therefore have been aware then that its claim was hopeless. 12 But if there had not been the earlier proceeding it can be assumed that, broadly speaking, the same interlocutory procedures would have been carried out in the present proceeding and the same material obtained. The only difference would be that Cadbury would have been appraised of that material at a later stage and, on Darrell Lea's argument, should have discontinued then. In the end, the question would be the same, namely whether on the material available the claim would show wilful disregard of known facts or clearly established law. For the reasons already given, I am not persuaded that such is the case. 13 The bare fact that a plaintiff discontinues a proceeding and commences another one does not of itself say anything as to the merits of the subsequent proceeding, still less as to whether or not failure in the subsequent proceeding should attract indemnity costs. A more limited case at trial than pleaded? This was said to be much narrower than the case pleaded. It will also be convenient to discuss in this context the vexed question of boysenberry. 15 In annexure A to the statement of claim there are eight samples of colour, each identified by a Pantone number, including Pantone 2658C. To a layperson's eye all samples appear as reasonably dark shades of purple; some are very dark, almost black. In particulars sub-joined to par 1 of the statement of claim "(t)he colour Cadbury purple" is said to be the colour perceived in the shades in annexure A "including those shades of 'purple' which are substantially similar thereto". In par 10 it is alleged that "by no later than 1995 Cadbury had achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia in the colour Cadbury purple". This allegation is denied in par 11 of the defence. 16 Paragraph 21 of the statement of claim alleges that since approximately mid to late 2001 Darrell Lea has used in its business "a colour purple bearing a striking and obvious likeness to the colour Cadbury purple". This is denied in par 29 of the defence. At the very least, it has not clearly distinguished the shade of purple it admits using from the alleged "Cadbury purple". Moreover, it is not clear whether Darrell Lea is saying that the "shade of purple known as 'boysenberry'" is or is not different from "Cadbury purple" or substantially similar to that colour. In the light of Darrell Lea's letter and par 29 of its defence it was reasonable for Cadbury to prepare for trial on the basis that it would have to prove Darrell Lea used "Cadbury purple", both at Christmas 2000-2004 and otherwise. 19 In opening Cadbury's case senior counsel said that Pantone 2658C was "the central core purple that Cadbury is concerned with" (T10). Senior counsel produced a box of Darrell Lea Soft & Hard Centres, subsequently tendered as exhibit V. The lid and a band around the top of the box were in a purple colour much the same as Pantone 2658C. The remainder of the box was in a lilac colour, noticeably lighter than any of the colours in annexure A. It is this colour which Darrell Lea referred to as boysenberry. The nature of boysenberry, the precise shade of boysenberry that they [Darrell Lea] have identified in their material filed in the court is this lilac sort of colour, like the lower part of that [i.e. exhibit V], but in fact they are using colours that are identical with or very close to the Cadbury purple Pantone 2658C. He agreed with what I expressed as my understanding of Cadbury's case, namely that Darrell Lea had used different shades of purple, some of which were "the same as the Cadbury Pantone purple". He also agreed with my understanding that Cadbury was not contending that "everything that could be described as purple can be protected by an order of the Court". Ultimately there were findings that Darrell Lea used a purple colour "much like that used by Cadbury", in particular at Christmas 2000-2004, but also at other times: [105]. Thus it is not correct to say, in effect, that any complaint as to Darrell Lea's usage of purple outside those times was abandoned by Cadbury. On the contrary, such usage was alleged, denied, or at least not admitted, by Darrell Lea, and proved by Cadbury. 21 Although there was some discovery, and evidence filed, about Darrell Lea's use of boysenberry, that is not surprising since such use had been positively pleaded by Darrell Lea and was thus a relevant fact. However, no time was taken up at the trial about boysenberry since Cadbury made clear from the outset that it was not seeking a restraint in respect of that shade. Of these eight were directed to proving surveys referred to in earlier evidence and seven related to new consumer surveys conducted after the due date for evidence in reply. 23 All these affidavits were ruled inadmissible, in part at least because they were out of time, particularly having regard to Cadbury's past record. As will appear hereafter, Darrell Lea should have its costs incurred in preparing to meet these affidavits. However, this aspect of Cadbury's conduct of the case, serious though it is, does not warrant an order that all Darrell Lea's costs for the whole proceeding be paid on an indemnity basis. Often there is room for argument, as there was in this case, as to the admissibility of evidence. It might even be negligent for counsel to fail to attempt to tender evidence where there is authority against its admission: Re Knowles [1984] VR 751 at 768-770. In itself, the tendering of evidence held to be inadmissible is not indicative of wrongful conduct which might warrant an order for indemnity costs. My ruling on its admissibility is Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 2) [2006] FCA 364. 26 The unexplained failure of Cadbury to comply with a practice note issued by the Chief Justice of this Court is not a matter to be brushed aside. Practice notes are issued for the guidance of practitioners so as to improve the fairness and efficiency of litigation. It is a matter of concern that practitioners have taken a conscious decision to ignore this practice note, presumably because it was thought forensic advantage would thereby be obtained. However, as Cadbury contended, non-compliance with a practice note does not affect the admissibility of evidence and is not like disobedience of a Court order. So I agree with Cadbury's submission that in itself non-compliance does not warrant indemnity costs, although there is perhaps irony in the fact that the unilateral preparation of the survey had the result that it turned out to have little, if any, usefulness. It was said the only explanation for Cadbury expending the "enormous resources" it had on this litigation was to "place enormous costs pressure on a much smaller entity in the chocolate confectionery trade and thereby achieving a 'positive' result through settlement". There was a "disproportionate application of resources to such a slender case". This contrasted with what was said to be "an inconsistently managed industry-wide campaign" (as to this latter aspect see the trial judgment at [55]-[68]). 28 Certainly the size and cost of this litigation is troubling. Although there was no dispute as to the applicable law, and very little real dispute as to primary fact, the trial extended over 12 days, with experienced senior and junior counsel on both sides, and a 10,557 page court book. If Cadbury had its way, the trial would have included issues of quantum and also much expert evidence, and probably taken another week at least. The threat of ruinous costs in such litigation, even if it is "only" irrecoverable costs for a party who succeeds, has important practical consequences for competition: see Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2006] FCA 363 at [30] - [31] . 29 That said, I do not think there is a proper foundation for a finding that Cadbury conducted the present litigation with the purpose of intimidating, or possibly destroying, a trade rival. While I doubt that those at Cadbury, or their advisors, lost much sleep in anxious rumination as to the dire consequences of this litigation for Darrell Lea, the fact remains that they had a legitimate commercial objective which, once decided upon, necessitated setting in motion the juggernaut of modern litigation. 30 Darrell Lea's characterisation of the case as concerned only with a "relatively trivial" period of use is not valid; see [14]-[21] above. In fact Darrell Lea continued to use a purple shade like that used by Cadbury and, importantly, asserted the right to do so at any time in the future. I found that Darrell Lea's assertion was justified, but that is not to say the matter was trivial from Cadbury's viewpoint. 32 As detailed in the affidavit of Mr Anthony Watson filed 9 June 2006 par 31, Cadbury filed eight affidavits on 18 November, one on 21 November, four on 23 November and one on 1 December, 14 in all, of which four were from experts. 33 On 23 December Darrell Lea's solicitors wrote to Cadbury's solicitors objecting to some of their experts' commentary on consumer studies carried out by third parties or by Cadbury and not by the experts themselves, particularly as the surveys themselves had not been proved by the person who conducted the surveys. On 9 January 2006 Cadbury's solicitors replied advising that all parts of their experts' affidavits would be relied on. 34 On 28 February Cadbury filed a further five affidavits which, except for one, were effectively further evidence in chief. Between 1 and 15 March Cadbury filed a further 12 affidavits, which with one exception were evidence in chief. 35 On Friday 17 March, with the trial due to commence on the following Monday, Cadbury served additional volumes of the court book which included a further two affidavits (see affidavit of Anthony Watson at par 40). 36 In relation to late filed affidavits Darrell Lea incurred solicitors' costs and counsel's fees in reviewing the affidavits, preparing cross-examination and notices of objection and corresponding with Cadbury's solicitors. Darrell Lea retained an expert, Mr John Hall, and filed an affidavit from him on 1 February 2006. Because Cadbury's expert evidence was largely excluded, Darrell Lea did not call Mr Hall at the trial. 37 Cadbury submits that all this effort and expenditure required of Darrell Lea "is but the normal course of litigation". I do not agree. 38 There are often legitimate reasons why exact compliance with Court directions is not possible. The Court will not adopt a Rhadamanthine approach. But there is a line beyond which non-compliance becomes unacceptable. That line has been well and truly crossed by Cadbury in the present case. Court directions for the filing of evidence, fixed by consent well in advance of a fixed trial date, have been treated with disdain by Cadbury. The Court's disapproval should be reflected in the costs order made. Nevertheless it has obtained some benefit. I will order that Cadbury pay (on a party and party basis) half Darrell Lea's costs of the application for indemnity costs. | application for indemnity costs various grounds raised held (i) the applicant's claim was not necessarily bound to fail;(ii) the discontinuance of an earlier proceeding in itself did not warrant indemnity costs; costs |
He arrived in Australia in April 1994, almost 15 years ago. At that time he claimed a protection visa on the ground of political opinion. He subsequently abandoned that claim in 1996 and applied for a number of other visas while remaining in Australia. In about August 1999 the appellant met and formed a relationship with a Philippino nurse, Ms L. She was a Roman Catholic. They began a relationship and in October 1999 they moved in together. They lived as a de facto couple until January 2000 when Ms L was detained at Villawood Immigration Detention Centre as an unlawful non-citizen. The appellant paid a bond for her release and, in late January 2000, sent her back home to the Philippines. He claimed that he hoped to bring her back to Australia after the grant of his, then, application for a skilled visa. In March 2000 she informed him she was pregnant with their child. Their daughter was born in October 2000. Since Ms L left Australia the appellant has maintained contact with and financially supported both her and their daughter. They have remained in the Philippines since then and the appellant has not seen Ms L or ever met their child. The appellant made a second application for a protection visa in September 2000. A delegate of the Minister refused that application in November 2000. He then applied for a review of the delegate's decision to the Refugee Review Tribunal. That tribunal has now reviewed the delegate's decision on four separate occasions. His Honour held that the tribunal had failed to give the appellant notice in accordance with s 424A of material from the appellant's passport and supporting documentation. He had provided that material to the delegate in support of his application for a protection visa but the appellant had not given that material to the tribunal for the purposes of its review: SZEWL [2006] FCA 968 at [14] - [18] . In November 2006 the second tribunal affirmed the delegate's decision. But in early March 2007 the Federal Magistrates Court, by consent, ordered that decision be set aside for failure of the tribunal to accord the appellant common law procedural fairness in relation to independent country information. The third tribunal again affirmed the delegate's decision in late July 2007, but its decision, too, was set aside by consent, on the basis that it ignored the evidence given to the previously constituted tribunal regarding the relationship between the appellant and Ms L. One might have thought that after all this, the issues arising in relation to the decision of the delegate under review were clear. The fourth tribunal (it being differently constituted on each occasion, although continuing to conduct the original review) decided to affirm the delegate's decision on 5 May 2008. In November 2008 the Federal Magistrates Court dismissed an application for constitutional writ relief from that decision: SZEWL v Minister for Immigration and anor [2008] FMCA 1495. Before the trial judge and before me, the appellant relied on eight bases for suggesting that the fourth tribunal committed a jurisdictional error. I will deal with these in detail below. The central issue in the appeal, however, was the way in which the tribunal dealt with the relationship between the appellant and Ms L. The tribunal did not accept that their relationship was a spousal or de facto relationship or a committed familial relationship of the nature claimed by the appellant. The appellant raised many issues challenging the validity of the tribunal's decision before the trial judge, and these were repeated in the appeal. The appellant claimed that because Ms L and their child were likely to face serious harm if they came to Bangladesh to live with him, he would suffer that harm for the purposes of s 91R(1)(b) of the Migration Act 1958 (Cth). He claimed that he had maintained his contact with and support of Ms L and, since her birth, their child throughout the period since Ms L's departure. The appellant claimed that his family disapproved of the relationship. The appellant gave evidence in support of his claims to the fourth tribunal. The appellant also had Ms L's uncle, an Australian citizen, available to give evidence at the hearing. The uncle had made a statutory declaration in support of the application. The uncle was married to the sister of Ms L's mother. At no time prior to the hearing by the fourth tribunal, had any issue been raised with the appellant that he had been unfamiliar with any steps undertaken by Ms L to seek residence here or had not himself sought to go to the Philippines or to have her come here. The fourth tribunal raised this issue during the course of the hearing. It asked him whether he had ever considered going to the Philippines to live with his family to which he responded "No". When asked why, he said because he did not think he could stay there and that they were not married. He did not know whether he could get a visa to the Philippines because he had not spoken to the Philippine Embassy. The tribunal asked why he had not considered getting a visa or made enquiries about getting a visa to live in the Philippines. He said that his concern was that if he went to the Philippines he would not be allowed to stay there and would then have to go back to Bangladesh. He said he would not then be able to go back to the Philippines and see Ms L and his daughter). You have been in the relationship for almost 10 years. Yet you've not seen your partner or child --- you've not seen your child at all and you've not seen your partner for more than 7 years. I do not think I am allowed to stay there in the Philippines. The appellant's advisor, who was also counsel appearing for him before me, raised a point not presently relevant and then enquired whether the tribunal wanted to see the other witness who was waiting, namely Ms L's uncle. I do accept that you sent her money. I accept all that. As I said, that is probably the reason I don't need to speak to him. I accept whatever is in the declaration. My concern really is what will happen in the future in terms of your relationship other than what has happened in terms of your contact with her. So I accept that. I will probably accept his evidence, so I don't think I need to speak to him. The uncle deposed that he had had many conversations with Ms L to the effect that she wanted to join the appellant as soon as possible and for them and their daughter to live together as a family. He said that the appellant called him "uncle" and they had a very close relationship. The uncle said that they met regularly, usually every weekend and spoke also regularly on the telephone. The uncle deposed to a candid discussion with the appellant shortly after the daughter was born concerning his and Ms L's religious differences and asking how the relationship would work. He said that the appellant told him that he had been born a Muslim but did not believe in Islam and did not follow it in any way. The uncle said that he knew the appellant and Ms L very well and that he knew the appellant loved Ms L and was fully committed to living a life together with her and their daughter. He also said that Ms L loved the appellant and wanted to join him as soon as she could. He noted that the daughter called the appellant "Papa". A similar statutory declaration was made by the aunt. The tribunal concluded that this fact suggested that the appellant's desire to remain in Australia was stronger than his desire to live with Ms L and their child and brought into question his commitment to a familial or de facto relationship. The tribunal also observed that the appellant had not made enquiries about the requirements for Ms L and their child to obtain residence in Bangladesh. He had explained to the tribunal that they would be harmed if they went there and that she did not want to live in Bangladesh. However, the tribunal said that the appellant's evidence and the parties' past conduct in being separated for a significant time with little, if any effort to be reunited, suggested to it that the appellant and Ms L did not have a strong commitment to live together and that their separation since 2000 was not caused solely by immigration or visa limitations. The tribunal concluded that if the appellant were really in the relationship he claimed, he could reasonably have taken more steps to be reunited with Ms L and their child by travelling to the Philippines, making enquiries about that travel or taking steps for her and the child to travel to Australia. The tribunal found that the appellant had not appeared to have undertaken any of those steps and that while it accepted that there was "some form of relationship" between him, Ms L and the child "... as is evidenced by their continuous contact, financial support and opinions of third parties, the tribunal does not accept that the [appellant] and [Ms L] are in a spousal or de facto relationship or that they are in a familial relationship of a kind in which the parties are committed to living together as a family". The tribunal also found that the appellant's past conduct indicated to it that the parties did not intend to live together if he were to return to Bangladesh, and that Ms L and their daughter would not accompany him there. It found that at best they might continue the present arrangements just described but that the reason Ms L and the child would not travel to Bangladesh was "... not because of their claimed fear of persecution there but because of the nature of their relationship with the [appellant]". The tribunal accepted the appellant's argument that harm to his family in Bangladesh may constitute serious harm to him for the purposes of s 91R(1) of the Act. He contended that it was not open to the tribunal to enquire why he had not left Australia to see Ms L and their child in the Philippines or made enquiries about being able to be with them overseas, since, had he pursued that line, he would have lost his entitlement to consideration of his application for a protection visa. I am of opinion that this argument should be rejected. The tribunal tested the genuineness of the appellant's claim concerning the quality of his relationship. It pursued this issue in the context that the appellant had not seen or been with Ms L for over eight years, at the time of the hearing, and had never seen their daughter. The tribunal's enquiry and reasoning was directed to an assessment of whether it could accept the appellant's claim of a loving and devoted relationship between persons who wished to live together. On the appellant's account, he had not made any enquiries on a contingency, or any other, basis to bring about that state of affairs. He did not suggest, for example, that he had any fear of persecution or mistreatment were he to go to the Philippines. All that that he said was that he felt he might not get a visa. The tribunal's reasoning, in effect, was that if he missed Ms L and their daughter so much, he might reasonably be expected to have made some attempt during over eight years of separation to be with them rather than doggedly pursuing his claim for a protection visa. While not everyone would have reasoned in the way in which the tribunal did, I am of opinion that it was open to the tribunal to have regard to the lack of apparent consideration by the appellant of other means of being with Ms L and their child. They were the persons whom he claimed he was so close to that he wished to live with them in Australia and would not be able to live with in Bangladesh by reason of his well founded fear that they would be persecuted there if they did. The appellant argued, with some force, that there was an unfairness in asking an applicant for a protection visa why he or she has not followed to a third country the persons they claimed to love. However, s 36(2) of the Act does not preclude the tribunal from investigating this question for the purpose of satisfying itself as to whether Australia owes an applicant for review protection obligations. I reject this ground. But, he contended that the tribunal had to inform him of the two aspects complained of: namely the tribunal's use of his lack of familiarity of the steps taken by Ms L to seek residence in Australia and its conclusion that his desire to remain here was stronger than his desire to live with Ms L and their daughter. Ms L had told the tribunal that she had not informed the appellant about the steps she had taken to seek residence because she believed he might get too excited about it and then get depressed if she failed. Thus, it was common ground that Ms L had not discussed with the appellant any attempt by her to return to Australia with a visa. The appellant argued that the tribunal denied him an opportunity to give evidence and present arguments in relation to this issue in accordance with s 425 of the Act. He noted that the tribunal had informed him at the end of the hearing that it did not need to hear oral evidence from the uncle, because it accepted everything in his statutory declaration. Subsequently, he noted that the tribunal wrote a letter to him under s 424A of the Act asking him to comment on country information in DFAT Report 803. It had received that report on 8 April 2008. The report related to persons who no longer practised their religion and were known to be in a de facto relationship in Bangladesh. The appellant argued that because of the tribunal's comments on the uncle's evidence and because it had referred to persons who were known to be in a de facto relationship, he was entitled to assume that there was no issue before the tribunal as to the genuineness and nature of his account of his relationship. I reject that submission. The transcript of the hearing before the fourth tribunal shows that it was obvious that there was an issue about the nature of his relationship with Ms L. The two sentences I have emphasised in the tribunal's final remarks at the end of the hearing (see [13] above) highlighted a problem that had been apparent earlier in the tribunal's questioning of the appellant. And, after it referred to accepting whatever was in the uncle's declaration, the tribunal identified its concern as to what would happen in the future in terms of the appellant's and Ms L's relationship. Earlier, just before Ms L gave evidence, the tribunal had almost finished its questioning of the appellant, it said that it did not think there was anything more to ask him. The tribunal member said that she would speak to Ms L in a moment and then give the appellant an opportunity to say anything else. The member said that she did not know if she really needed to speak to his other witnesses. She stated that she accepted that he contacted Ms L and sent money to her, and continued. The appellant said that Ms L did not want to go there, she knew there were Muslims there and she could not stay there. Because they are not going to leave us alone in Bangladesh . The Minister argued that the tribunal's questioning and statements about the appellant's apparent lack of effort was a sufficient indication to him that his lack of exploration of his being able to go to the Philippines or Ms L's and their daughter's being able to come back to Australia was an issue for the purposes of s 425(1) of the Act. In SZBEL (2006) 228 CLR 512 at 165-166 [47] Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ said that the tribunal's statements or questions during the hearing could sufficiently indicate to an applicant for review that everything he or she said in support of the application was in issue. Such an indication could be given in many ways and no particular formula of words was required. However, the questions put to the applicant for review must, taken as a whole, put him or her on notice of the tribunal's concerns. Their Honours said that if there were specific aspects of an applicant's account that the tribunal considered may be important to the decision and open to doubt, it must at least ask the applicant for review to expand upon those aspects of the account and ask him or her to explain why the account should be accepted: SZBEL 228 CLR at 166. In my opinion, the appellant's argument fails. His Honour was correct to hold that the tribunal had not failed to comply with s 425 of the Act and that this ground should be dismissed. The tribunal sufficiently raised its concerns about the appellant's apparent lack of effort to explore other means of being with Ms L and their daughter. It questioned the appellant directly about his exploration of the possibility of him living in the Philippines. The tribunal made the comment that he had not made much apparent effort to be with his family. And it referred to the fact that he had not seen Ms L for about nine years, was not aware of any enquires that she had made about her coming to Australia and had made no enquiries about his going to the Philippines. But how can I be satisfied given that if you do have to return to Bangladesh that she will come with you . Moreover, I am of opinion that there was no reason to consider that the tribunal's exploration of this issue was not a legitimate approach open to the tribunal to assess the appellant's claim. GROUND 3: DID THE TRIBUNAL FAIL TO COMPLY WITH S 424A OF THE ACT? He argued that the tribunal took into account his apparent unfamiliarity with the steps undertaken by Ms L to seek residence in Australia in forming the view that their relationship was not of the close kind that he asserted. In that context, he contended that the tribunal committed a jurisdictional error in failing to comply with s 424A in respect of this information. The Minister supported the trial judge's finding that the information conveyed by Ms L at the hearing was not part of the reason for the tribunal's decision because it did not undermine the appellant's claim to be a refugee. His Honour made that finding, relying on what was said by Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ in SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609 at 615 [17]. In addition, his Honour held that Ms L's evidence was called at the request of the appellant, and was thus to be taken to have been given by him for the purposes of his application for review within the meaning of the exception in s 424A(3)(b). In SZBYR 235 ALR at 615 [17], Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ said that the reason or part of the reason for affirming the decision under review was that the appellant was not a person to whom Australia owed protection obligations under the Convention. In that case, a statutory declaration that did not in terms contain a rejection, denial or undermining of the appellant's claims to refugee status was held not to attract the operation of s 424A(1)(a). Tamberlin, Finn and Besanko JJ applied that reasoning in SZICU v Minister for Immigration and Citizenship [2008] FCAFC 1 ; (2008) 100 ALD 1 at 7-8 [26] . In that case the Court held that information in an appellant's passport was neutral, and that what undermined his claims was not conveyed by the passport, but by country information. There, the tribunal had used the country information in assessing whether the appellant was of adverse interest to the authorities because he had obtained his passport and was able to leave his country of origin with it. Their Honours, applying SZBYR 235 ALR at 616 [18], said that the relevant "information" within the meaning of s 424A(1) was not to be found in disbeliefs arising from a process of reasoning applied to the evidence. In my opinion, the question for the tribunal here was whether the relationship of the appellant with Ms L and their daughter was such that if they all returned to Bangladesh they would be able to live as a family unit, as he claimed he wished. The tribunal had to make an assessment as to whether the relationship was of that nature. If it were not, then the tribunal did not need to consider the appellant's claims of harm which he would suffer there because of harm to his family unit from persecution of Ms L as a Roman Catholic, not being married and where she and their child would be perceived as being persons of different ethnicity. The tribunal used Ms L's evidence of her inquiries and her failure to tell the appellant of them as a basis for its rejection of the appellant's claim. In SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 228 CLR 294 , McHugh, Kirby and Hayne JJ held that the tribunal had failed to comply with s 424A(1) because it had not given an applicant for review notice in writing of evidence given by her daughter as a reason to affirm the decision under review: see SAAP 228 CLR at 308 [37] per McHugh J, 338 [144], 345 [170], 345-346 [172]-[173] per Kirby J, 348 [184] per Hayne J. In that case the daughter had been called as a witness by the tribunal of its own motion. As the statutory scheme makes clear, it is the tribunal, and not an applicant for review, which calls witnesses. Thus, s 426 provides that if in response to a notice issued to an applicant for review under ss 425 and 425A, that applicant notifies the tribunal within seven days that he or she "... wants the tribunal to obtain oral evidence from a person or persons named in the notice" pursuant to s 426(2), the tribunal is obliged to have regard to the applicant's wishes, but it is not required to obtain that evidence orally or otherwise from the person named in the applicant's notice (see s 426(3)). As a matter of statutory construction it is not open to suggest that an applicant for review can call any witness, other than himself or herself, pursuant to the right conferred under s 425(1). A number of single judges of the Court have expressed the view that information given by a witness nominated by an applicant for review under s 426(2) and called by the tribunal to give evidence amounted to "information ... that the applicant gave for the purpose of the application for review" so as to fall within the exception provided in s 424A(3)(b). They have held that the witnesses were in fact called by the applicant so that their evidence was information given by the applicant. That decision was followed by Gordon J in SZIAT v Minister for Immigration and Citizenship [2008] FCA 766 at [39] . She also referred to Bennett J's decision in SZAQI v Minister for Immigration and Multicultural Affairs [2006] FCA 1653 at [23] - [24] . There, Bennett J again referred to the concept of an applicant calling a witness to give oral evidence on his or her behalf as being within the scope of s 424A(3)(b). Bennett J distinguished the contrary construction by Branson J in SZECG v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 733 at [17] - [22] . In SZECG [2006] FCA 733 at [21] Branson J followed the obiter reasons of Lee and Tamberlin JJ in Applicant M164/2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 16 at [96] - [99] per Lee J, with whose reasons Tamberlin J agreed at [108]. They held that s 424A was engaged where the tribunal relied on alleged inconsistencies between evidence of the applicant's husband and that of the applicant. Branson J doubted that it could be said that the appellant "gave" the information implicit in his father's evidence. She said that the hearing before the tribunal was not an inter parties judicial hearing but formed part of an administrative enquiry. Her Honour observed that the appellant there did not call his father to give evidence but rather advised the tribunal that he wanted it to take evidence from his father". Branson J did not reach a concluded view on the question although she doubted that s 424A(3)(b) disclosed an intention that every piece of information that the tribunal gleaned from the evidence of the witness called at the request of an applicant for review was to be treated as evidence given to the tribunal by that applicant for the purpose of the application: SZECG [2006] FCA 733 at [22] - [23] . None of these authorities construed s 426 or dealt with the fact that an applicant could not "call a witness". I am of the firm opinion that on the proper construction of the Act, information given orally by a witness, other than the applicant for review, cannot be "information" that the applicant gave for the purpose of the application for review within the meaning of the exception of s 424A(3)(b). In my opinion, the statutory scheme does not permit that construction. First, a witness is not "information". The fact that an applicant for review asked the tribunal to take evidence from a person cannot make everything that the person said, if the tribunal called him or her to give evidence, information that the applicant gave to the tribunal. Self-evidently, the witness gave the information. It is a truism in litigation that there is no property in a witness. Moreover, the procedures of the tribunal are inquisitorial, not adversarial: Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53 ; (2006) 231 CLR 1 at 17 [40] per Gummow ACJ, Callinan, Heydon and Crennan JJ, 43 [126] per Kirby J; SZAYW v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 49 ; (2006) 230 CLR 486 at 491 [4] per Gleeson CJ, Gummow, Hayne, Callinan and Crennan JJ. It would be incongruous to hold that s 424A(3)(b) characterised everything that might be said by a witness nominated by an applicant for review as a person whom he or she wished the tribunal to call to give evidence as being "information ... that the applicant gave for the purpose of the application for review". The only "information" that could possibly be in that category would be the witness's name and contact details. What the witness came to say in evidence would be information that the witness, not the applicant for review, gave to the tribunal. Any other construction of the section would make no sense. The applicant for review, as s 426(3) provides expressly, has no right to require the tribunal to call anybody to give evidence, apart from himself or herself. Such a construction is reinforced by consideration of s 424. That section entitles the tribunal to get any information that it considers relevant. And, s 424(2) authorises the tribunal to invite a person "to give additional information". In other words when a person, not being the applicant, gives the tribunal information, that information is not "given by the applicant for review" within the meaning of ss 424(2) or 424A(3)(b). Here, the information given by Ms L to the tribunal did not merely undermine the credibility of the appellant. It went to the heart of the relationship which was the foundation of his claim to a protection visa: see also MZXBQ v Minister for Immigration and Citizenship [2008] FCA 319 ; (2008) 166 FCR 483 at 492 [27] per Heerey J; SZJZB v Minister for Immigration and Citizenship [2008] 105 ALD 226 at 234 [22]-[25] per Jagot J. The information from Ms L undermined the appellant's claim, for the tribunal said it brought into question the level of communication between the two of them and, ultimately, but directly led to its conclusions that the relationship was not as he had claimed and his desire to remain in Australia was stronger than his desire to live with her and their child. The Minister accepted that the tribunal failed to give the appellant written notice under s 424A(1) or oral notice under s 424AA in respect of the information from Ms L. In those circumstances it committed a jurisdictional error. GROUND 4: DID THE TRIBUNAL MISLEAD THE APPELLANT? While the tribunal did tell him that it accepted whatever was in the uncle's declaration, immediately afterwards it followed that statement with the words that I have quoted (at [13] above), so as to make clear that it had a concern about what would happen in the future in the relationship. That was the issue to which the appellant pointed in the statutory declaration itself. The uncle asserted that the appellant was fully committed to living a life together with Ms L and their daughter. I do not see any error in the conclusion of the primary judge that, as revealed by the transcript, there was no doubt at the hearing that the tribunal questioned the genuineness of the relationship as one in which the parties were committed to living together. Moreover, the appellant has given no indication of any further material which he might have tendered to the tribunal in order to deal with the position. He had already put before the tribunal the material he wished to rely upon for this aspect of the matter (leaving aside any response to any invitation under s 424A referred to in considering ground 3): cf Applicant NAAF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 62 ; (2004) 221 CLR 1 at 12 [34] per McHugh, Gummow, Callinan and Heydon JJ. I reject this ground of appeal. GROUND 5: DID THE TRIBUNAL RELY ON ASSUMPTIONS OR IRRELEVANT CONSIDERATIONS OR FAILED TO TAKE INTO ACCOUNT RELEVANT CONSIDERATIONS AND EVIDENCE? This ground amounts to an attack on the reasoning processes of the tribunal in arriving at its findings of fact. The tribunal explained why it found unpersuasive the appellant's case that he would live together with Ms L. It reasoned was that if the relationship had the strength of commitment that the appellant was asking the tribunal to find, it would have expected that the appellant would have done more to reunite with Ms L and his child. There was no unstated assumption or irrelevant consideration here. The tribunal expressed, in its own language, its lack of satisfaction with the appellant's claim based on its assessment of his conduct. In other words, the tribunal looked at the objective evidence that revealed that the appellant, over 8 years, apparently had not done more to be with Ms L and their child than pursue his protection visa claim here. It was open for the tribunal to find that this was not demonstrative of the level of commitment to the relationship that the appellant asserted. It is important to allow some latitude to an administrative decision-maker in the expression of his or her reasons. They are meant to inform readers what the decision-making process covered: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. The trial judge found that the tribunal's conclusion was based on the evidence before it. I too am unable to detect any jurisdictional error in the tribunal's approach. I reject this ground. GROUND 6: DID THE TRIBUNAL IGNORE RELEVANT EVIDENCE? GROUND 7: DID THE TRIBUNAL ERR IN ITS APPLICATION OF S 91R? That section provided that persecution had to involve serious harm to the person. The tribunal found that were he returned to Bangladesh, and unable to live in a familial relationship with Ms L and their child, his circumstances would not be substantially different to his present circumstances --- of separation from them - that he had endured in Australia since 2000. The appellant argued that there was a substantive difference, namely that the reason for the separation would be different: in Bangladesh it would be because of the threat of harm to the appellant or his family, whereas in Australia it was by operation of law (there being no visa at the moment allowing the co-habitation). However, his Honour found that the tribunal had concluded, on the merits, that the nature of the relationship between the appellant and Ms L was such that they did not have a strong commitment to live together and that, for that reason, any future separation would not in the circumstances constitute serious harm. I agree. GROUND 8: DID THE TRIBUNAL IGNORE EVIDENCE THAT THE APPELLANT WOULD BE PERSECUTED FOR BEING A NON-PRACTISING MUSLIM AND APOSTATE. That report informed the tribunal that the Embassy in Bangladesh could not find any documentation there suggesting acts of violence against an atheist or non-believer and that while the Embassy accepted that he may be subjected to some cultural alienation, that did not amount to serious harm for the purposes of s 91R(1)(b). In addition, the tribunal found that there was no real chance that the appellant would suffer persecution due to his religion or conduct, whether religious or cultural, were he to move away from his local area in which there were, on his account, "Muslim extremists" and relocate to Dhakar or another big city. The tribunal accepted that serious harm might include a permanent separation from a person, spouse and child. The appellant did not suggest that the tribunal made any error in that regard. As his Honour found, this ground of challenge amounted simply to a disagreement with the tribunal's findings of fact. The argument relied on a footnote to DFAT Report 803 that referred to another report prepared by the State Department of the United States of America entitled "International Religious Freedom Report". The footnote referred to the latter report "for an overview of religious practices in Bangladesh". The appellant supplied the tribunal with a portion of the latter report in response to its s 424A letter dealing with the DFAT Report. However, it was a matter for the tribunal to assess what evidence on this topic it would accept. I see no error in what his Honour concluded. A grant of constitutional writ relief is discretionary and may be refused if no useful result could ensue from quashing the tribunal's decision and ordering it to perform its duty according to law: SZBYR 235 ALR at 618 [28]-[29]. I am of opinion that the tribunal should have drawn the appellant's attention to the significance it proposed to give to the failure of Ms L to discuss with him the efforts she had made to explore obtaining a visa. The tribunal was conscious of the evidence she had given, including her statement that he may have become too excited had she told him what she was undertaking and then depressed if she failed, as a result of which she decided not to tell him. However, Ms L also gave other accounts of why she did not tell him, which the tribunal had noted in its statement of the evidence. For example, it recorded that Ms L had told it that she had not told the appellant because she did not think it was necessary as she could not get it [the visa] anyway. The question here is whether, had the tribunal written a letter under s 424A(1) or given oral particulars under s 424AA and identified the reason why what Ms L's evidence had conveyed could have caused the tribunal to decide as it did, that would have made any difference to the result. I have considered whether there was anything more that the appellant could have done. In the end I have come to the conclusion that he may have been able to put submissions to the tribunal to dissuade it from concluding that the relationship he had with Ms L and their child was not as close and committed as he claimed. The couple have a seven year old daughter. However, this letter indicated that the appellant did not consider it necessary to address the tribunal further on the issue of the relationship. Thus, it may have been possible to provide the tribunal with further submissions and or statements from the appellant and Ms L to deal with this topic had the tribunal fulfilled its statutory obligation of giving the appellant clear particulars of the information from Ms L that it considered would be the reason or part of the reason for affirming the decision, and ensuring as far as is reasonably practicable that the appellant would understand why that was relevant to the review and the consequences of it being relied on to affirm the decision under review, as ss 424A(1) or 424AA required. Different minds might take different views about the relationship the appellant and Ms L had, and its strength. Different minds also might take different views about the assessment of the evidence, and any submissions made as to what inferences ought be drawn from that evidence. Just as in litigation, one answer to a question by a witness in the box can change the course of how a case is decided, or one submission likewise. I am not satisfied that it would have made no difference to the outcome of the review had the appellant had the opportunity to provide submissions on this point. The tribunal departed from the procedure to afford procedural fairness mandated by ss 424A and 424AA of the Act. I cannot say that no different result would have ensued had the tribunal afforded the appellant the opportunity which ss 424A(1) and 424AA required him to have, however unlikely it is that he would have been able to dissuade the tribunal from taking the particular view it did of the facts: Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141 at 145-146 per Mason, Wilson, Brennan, Deane and Dawson JJ; Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 225 CLR 88 at 95 [14] per Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ. It follows that the appeal must be allowed and the matter remitted to the tribunal for the fifth time. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | protection visa procedural fairness jurisdictional error tribunal powers inquisitorial nature of tribunal s 424a "information" witnesses in tribunals when applicant for review requests tribunal under s 426(2) to obtain oral evidence from a witness whether information of witnesses in support of applicant's claim is the applicant's information for s 424a(3)(b) when the tribunal obtains that evidence, the evidence is "information" and is not information given by the applicant for the purpose of the application for review in under s 424a(3)(b) held, appeal allowed migration |
Order 62 rule 4(2)(c) provides that where the Court orders that costs be paid to a party, it may further order that, instead of taxed costs, that party be entitled to "a gross sum specified in the order". The circumstances leading to the motion are described in the affidavits of Natalie Jean Hickey, a principal of Cadbury's solicitors, Jennifer Anne Young, a Mahlab Costing Pty Ltd costs consultant retained by Cadbury, and Janelle Suzanne Borham, a patent attorney of Griffith Hack, Cadbury's patent and trade marks attorneys. Ms Hickey refers to her attempts at costs recovery by correspondence with Wrigley's solicitors, gives her views about the cost and delay of proceeding to taxation, the convenience of a gross sum costs order, and the calculation of what she believes to be a fair and proper amount as a fixed sum, namely that appearing in the notice of motion - $1,217,000 made up of $687,975 party/party costs and $530,000 party/party disbursements, and then rounded down. Ms Young prepared an assessment of Cadbury's costs and disbursements. This was not a detailed bill. She describes her methodology, and the manner in which she calculates Cadbury's party/party costs and disbursements recoverable on taxation. Ms Borham describes the services provided to Cadbury by Griffith Hack. Order 62 rule 4 confers what has been called an unlimited discretion, which of course must be exercised in a judicial manner. How the powers are to be used varies widely from case to case and each case must be decided on its own merits: Leary v Leary [1987] 1 WLR 72 at 76. The approach to be adopted to an application under Order 62 rule 4(c) has recently been described in Sony Entertainment v Smith (2005) 215 ALR 788 at 812-813. The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available. The affidavits filed on behalf of Wrigley are directed to matters relevant to that passage from Harrison . They are those of Ian Stanley Pascarl, a partner of Wrigley's solicitors, and John Andrew Balmer, a JB Legal Costing Pty Ltd costs consultant retained by Wrigley. Mr Pascarl instances aspects of the Mahlab assessment of profit costs and disbursements that he considers excessive and unreasonable. The [Borham affidavit] does not provide any detailed breakdown of each item, and the cost charged for each item, by patent attorney Griffith Hack which charged a total of $220,000 to Cadbury (of which $170,000 is now claimed against Wrigley). Wrigley is entitled to be provided with that information and to vigorously test the need for, and reasonableness of, those charges. I take just three out of some fifteen of those aspects: he challenges Ms Young's allowance for scientific research and time spent collating documents and a loading for care, skill and attention included in her cost assessment, and says Wrigley is unable to review these allowances without the benefit of a detailed bill, and should not be denied the right to taxation in order to establish and analyse the amounts hidden in the assessment; he says Wrigley needs to be able to question the terms of Cadbury's retainer of Griffith Hack and the nature of the patent attorney support provided, and to rigorously question whether work done and fees charged represent necessary party/party costs; and he claims there is no basis upon which to assume that taxed professional costs may differ by 10% to 15% from the costs calculated in Mahlab's assessment, and says it is for that reason that Cadbury requires a detailed bill in order to decide whether a taxation of Cadbury's costs should be pursued. The Wrigley deponents' claims and contentions are advanced in support of the view that there should be a taxation of Cadbury's costs. I must, however, bear in mind that of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs: Harrison at [22]. Rather a broader brush must be applied than would be appropriate on taxation. The present relevance of the Wrigley claims and contentions is that their existence, unresolved, has brought me to the clear view that I should not exercise the power to order a lump sum under Order 62 rule 4(c) because I am not satisfied that I can do so fairly between the parties, and with sufficient confidence that I would be arriving at an appropriate sum on a logical and reasonable basis, rather than selecting figures at random on the basis of an arbitrary preference for one expert's view over another's. See Sony Entertainment at [199]. In all but one of the cases collected in the appendix to Cadbury's written submissions the judge who fixed a lump sum was the trial judge who, having heard the evidence and watched the proceeding unfold, was in a much better position than I am to reach informed conclusions about the costs issues that are now in dispute. In the Harrison case, Giles JA, as a member of the Court of Appeal, had sat on an appeal in the matter, and on one later proceeding that had been removed to the Court of Appeal in which the costs order made on the appeal was challenged. His Honour was deputed by the Court of Appeal to hear a lump sum application that followed upon that Court's costs order. Thus his Honour had a similar advantage to that enjoyed by the trial judge in the other cases referred to in the appendix. Cadbury submitted that the following considerations pointed in favour of the award of a lump sum: the delay and expense involved in a taxation; Cadbury's assessments were prepared by an experienced costs consultant; those assessments have been reduced by Ms Young as appears in her affidavit; Ms Young's methodology has not been criticised; and if the matter were to proceed to taxation, the costs of Ms Young's assessments would be thrown away. In any event, I have taken all those matters into account in exercising my discretion. They have not persuaded me to depart from the view I have expressed at [9]. The appropriate course in this case is for there to be a taxation. Accordingly, in the exercise of my discretion, I decline to specify a lump sum pursuant to order 62 rule 4(c). The motion is dismissed with costs. | application for gross sum order circumstances where order appropriate whether discretion should be exercised costs |
The Tribunal held that it lacked jurisdiction to review a decision of a delegate of the first respondent refusing to grant the first appellant a UC-Temporary Business Entry (class UC) (Business (Long Stay)) visa. The visa applications of the other appellants depended on the application of the first appellant. The appellants are family members. The first appellant, Nilesh Vinayak Bagwe, is married to the second appellant, Nikita Nilesh Bagwe. The third appellant, Adwait Nilesh Bagwe, is their son. The appellants are self-represented. Prior to the hearing, they filed no written submissions but appeared at the hearing today, with the assistance of an interpreter, to state their case and present some submissions in writing. The first respondent filed written submissions, which were augmented today. The background to the appeal, as appears from the Tribunal's reasons for decision and the judgment under appeal, is as follows. The appellants are citizens of India. On 20 December 2005, Mr Bagwe lodged an application with the Minister's Department for the grant of a subclass 457 visa, with Freshco Fruit Market Pty Ltd as his sponsoring employer. Freshco Fruit Market Pty Ltd was approved as a sponsor on 24 October 2005. Sponsorship approval was valid for a period of two years, expiring on 24 October 2007. As it happened, however, the Minister's Department failed to process Mr Bagwe's sponsorship application before sponsorship approval expired; and, on 17 June 2008, a Ministerial delegate ultimately declined to grant Mr Bagwe the visa he sought. When the matter came before it, the Tribunal held that it had no jurisdiction to reconsider Mr Bagwe's application because, at the date of lodging his application with it on 10 July 2008, Mr Bagwe had no approved sponsor, and there was, therefore, no MRT-reviewable decision for the purposes of the Migration Act 1958 (Cth). In an application for judicial review filed in the Federal Magistrates Court, the Bagwes nominated two grounds of appeal. FRESHCO was approved on 24th October 2005. Department of Immigration --- DIAC got my visa application on 20 th December 2005. They took until 17 June 2008 to decide my visa application. Due to their unreasonable delays, FRESHCO had to apply again on 8 th September 2008 to DIAC and this application is before DIAC now. The Federal Magistrate held that s 338 of the Migration Act provided an exhaustive list of the decisions falling within the statutory expression "MRT-reviewable decision". Since the challenged decision did not satisfy s 338(2)(d)(i) or s 338(2)(d)(ii) of the Migration Act , the decision was not an MRT-reviewable decision. The Federal Magistrate dismissed the Bagwe's application for judicial review, with costs. This is an appeal against this judgment. The grounds of appeal are stated as: Although Federal Magistrates Court acknowledged the extraordinary delay in the processing of my visa application by Immigration department, it failed to note that expiry of my sponsor's approval is due to this delay, which made my visa application invalid. While Immigration department claims to have the knowledge of Interpol notice on me and possible impact on my visa application, I was asked to undergo regular procedures (i.e. ) medical examination and produce police clearance certificate from India and Australia. I have suffered because of this ambiguity. They emphasise that, as the Federal Magistrate noted, the delay between Mr Bagwe's visa application and its determination is the source of the Bagwes' complaint. Delay was also the principal matter relied on by Mr Bagwe at the hearing. He emphasised the impact of the delay on himself and his family. Within the statutory context in which this appeal must be determined, however, this delay does not afford Mr Bagwe a ground for successful appeal. The Federal Magistrate held, correctly, that in order to qualify as an MRT-reviewable decision, the challenged decision had to satisfy s 338(2). Since Mr Bagwe was not sponsored by an approved sponsor at the time of his application for review to the Tribunal on 10 July 2008, then s 338(2)(d)(i) was not satisfied. See also subclause 457.223(4) of the Migration Regulations. There was also no evidence that the circumstance in s 338(2)(d)(ii) existed. Accordingly, whilst the challenged decision satisfied s 338(2)(a), (b) and (c), the challenged decision did not satisfy s 338(2)(d) and, accordingly, the Tribunal had no jurisdiction to review the decision. There is, as the first respondent noted, an immaterial error in her Honour's reason for judgment. Her Honour stated that Freshco Fruit Market Pty Ltd ceased to have approved sponsor status by either 24 June or 24 July 2007, when in fact Freshco ceased to be an approved sponsor on 24 October 2007. This error does not affect the conclusion as to the Tribunal's lack of jurisdiction, because the fact is there was no sponsorship approval as at 10 July 2008, when the Bagwes applied to the Tribunal. The delay in making the primary decision, about which Mr Bagwe essentially complained, cannot affect the conclusion that, for the reasons stated, the Tribunal had no jurisdiction to review the Ministerial delegate's decision declining the visa Mr Bagwe sought and there was no error in the judgment of the Federal Magistrates Court to this effect. For the reasons stated, the appeal should be dismissed with costs. The first respondent sought costs to be fixed, relying on the affidavit of Nicola Johnson sworn on 25 May 2009. Having regard to this affidavit and the parties' submissions, I would fix costs in the sum of $3000 payable monthly in 18 equal instalments over 18 months. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | temporary business entry visa employer sponsorship approval expired at the time of application to the migration review tribunal for review of delegate's decision whether tribunal had jurisdiction to review decision not a mrt-reviewable decision within s 338 of the migration act 1958 (cth) no appealable error shown in federal magistrate's decision appeal dismissed migration |
He arrived in Australia on 5 January 2007 and applied to the Department of Immigration and Citizenship for a Protection (Class XA) Visa on 7 February 2007. 2 A delegate refused to grant that visa and an application for review was filed with the Refugee Review Tribunal on 18 May 2007. 3 On 16 August 2007 the Tribunal affirmed the decision not to grant the visa. That decision of the Tribunal was affirmed by the Federal Magistrates Court on 18 January 2008: SZLHM v Minister for Immigration & Citizenship [2008] FMCA 62. 4 The Appellant now appeals to this Court. He appeared at the hearing of the appeal unrepresented but with the assistance of an interpreter. He had previously filed written submissions, as had the Respondent Minister. At the request of the Court, further submissions were also filed on behalf of the Respondent Minister on 19 May 2008. All submissions have now been considered. That the Learned Federal Magistrate simply dismissed the application by not assessing the applicants claim which are purely based on the Refugee Convention of the religion . The applicant produced the bundle of the evidence , which was not considered by the learned Federal Magistrate. The learned Federal Court committed the legal errors coupled with the jurisdictional errors by not taking the evidence in to account . 2. That the Appellants submitted the evidence to the effect the amount of the persecution which has been committed to the applicant, the RRT did not gave any consideration, the RRT even did admitted the facts and verified the circumstances of the applicant from different sources . The appellant made out a case which really requires the judicial inference of this honorable Court to meet the ends of justice . 3. That the Respondents have failed to assess the claims and the evidence so forwarded by the appellant as per the refugee laws as laid down by the hand book of the UNHCR . The real meanings were not taken in to the consideration by the RRT & by the learned Court below. 6 None of these grounds has been made out and the appeal is dismissed. FAILURE TO ASSESS THE CLAIMS? 8 Left to one side is an apparent misapprehension on the part of the Appellant as to the role of the Federal Magistrates Court. It simply was no part of the function of that Court to assess the merits of the claims being advanced; that was the task of the Tribunal, not the Federal Magistrates Court. 9 It is important for those who apply to the Federal Magistrates Court seeking review of decisions of the Refugee Review Tribunal, and who subsequently seek to appeal to this Court, to understand that it is the Tribunal that resolves questions of fact. It is no part of the role of a court conducting judicial review to trespass into the realm of reviewing the merits of an administrative decision the subject of review: Attorney-General (NSW) v Quin [1990] HCA 21 ; (1990) 170 CLR 1. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone. The confined jurisdiction entrusted to the Federal Magistrates Court is unequivocally set forth in s 476 of the Migration Act 1958 (Cth). 10 The Appellant's grievance, however, need not be resolved upon that basis. It may be more directly answered by reference to the findings of the Tribunal. A reading of those reasons for decision denies any conclusion that it did not assess the claims advanced and the evidence relied upon. 11 The Tribunal held a hearing on 28 June 2007 and the now Appellant appeared. The Tribunal's reasons set forth the evidence relied upon by the now Appellant, the questions asked of him at the hearing and his responses. Those reasons also record that an opportunity was sought to provide the Tribunal with further documents and that that opportunity was extended. Those reasons also record that no further documents were in fact provided. ... The Tribunal finds that the applicant's testimony is inconsistent with independent country information, and implausible amounting to a fabrication for the reasons below, which leads the Tribunal to find that the applicant does not fear persecution because of his role with the ISO in Hangu and the event of 21 March 1997. The Tribunal does not accept that the applicant will be targeted as a result of the violence between Sunnis and Shia on 21 March 1997 as he claims. As was put to the applicant at hearing, no independent country information could be found suggesting any violence between Sunni and Shia Muslims took place in March 1997. ... The above matters lead the Tribunal to find that the applicant was not a credible witness and will not be persecuted for his involvement in the events of March 1997. As the Tribunal does not accept that the event on 21 March 1997 took place, it follows that it does not accept that the applicant was targeted or will be targeted for his involvement in it, as he claims. But more importantly for present purposes, the findings demonstrate a consideration of the claims being advanced before the Tribunal and a consideration of the evidence. 14 More specifically, the " bundle of the evidence " referred to in the first Ground of Appeal was identified by the now Appellant during the course of the hearing of the appeal as being a " First instance report " recording an incident said to have occurred on 7 May 2007; a " Letter of recommendation " dated 17 April 2007; a letter from the " Young Men Shia organisation " dated 23 April 2007; and a " Police Clearance certificate " dated 29 April 2007 and bearing a date of issue of 4 December 2001. Rather than any conclusion being reached that this " bundle of the evidence " was not considered by the Tribunal, the contrary conclusion is inevitable. There is an express reference to those documents in the Tribunal's reasons as being documents submitted by the now Appellant " in support of his claim ". 15 The first Ground of Appeal is rejected. 16 Although it is thus concluded that the first Ground of Appeal has no substance -- concurrence thereby being expressed with the conclusion of the Federal Magistrate -- some reservation is expressed as to the manner in which the reasons of the Federal Magistrate have been drafted. Those reasons simply embrace as a quotation the written submissions as previously filed in that Court by the Respondent Minister. It is understood that it is the practice of some Federal Magistrates to have submissions filed in electronic form, thereby facilitating such quotation in the giving of reasons. For present purposes it is sufficient to note that considerable caution needs to be exercised in too readily embracing such an approach as an appropriate manner in which to set forth reasons for decision. FAILURE TO CONSIDER THE EVIDENCE PRESENTED? 18 Again left to one side is the fact that this is a challenge to the merits of the decision of the Tribunal and not a ground of appeal in respect of the decision of the Federal Magistrates Court. 19 It is difficult to perceive any real difference between the first two Grounds of Appeal. Both, it is considered, are but an impermissible attempt to review the merits of the decision reached by the Tribunal. 20 It is also difficult to understand how the Appellant can contend that there was a failure on the part of the Tribunal to consider the claims being made by him and, in particular, his claimed " persecution ". Such a contention is simply inconsistent with the fact that the Tribunal set forth in its reasons the claims being advanced before it. He ignored it and received further calls to leave. • In 1997 he left for Dubai, but his family continued to receive calls and a death warrant for a month or so. ... • On 30 December 2006 he received a call saying "If you think you are safe here you are wrong, you escaped from Peshawar but your death is here in Fujairah, UAE". He travelled to Abu Dhabi. 21 A reading of the account by the Tribunal of the evidence before it and of the Tribunal's findings discloses no reviewable error. 23 It is, however, understood to be a contention that there was a failure on the part of the Tribunal to properly apply to the facts of the present case the provisions of the Convention relating to the Status of Refugees , done at Geneva on 28 July 1951. The written submissions filed by the Appellant provide further limited assistance as to what he seeks to assert. Those written submissions thus make reference to the definition of " refugee " as set forth in " the handbook of the UNHCR ". In the green book at page 53 it is laid down by the delegate that the material of US Department of state Country information on human rights practices 2006, released by the Bureau of democracy , human rights , and labour , March 6, 2007 . It is clearly laid down in the above literature that the human rights in the Pakistan is one of the worst, moreover , the religious intolerance in Pakistan is on its peak , there are gross human rights violations in Pakistan as far as the Shia Muslims are concerned . Moreover , UK Home office reports , Pakistan , April 2006 were not taken in to the consideration by the delegate, similarly CX170292 Pakistan Shite-Sunni Conflicts rises in Pakistan . To the extent that content can be given to the third Ground of Appeal, it is understood to be essentially a contention that the Tribunal should have made different findings of fact and that the findings it did make were not consistent with other evidence. 25 The third Ground of Appeal must be dismissed as an impermissible attempt to review the findings of fact made by the Tribunal and the merits of its decision. 26 The written submissions filed by the Appellant also contend that the " ministers delegate did not appl [y] his mind to the ... Migration Act and Migration Regulations as laid down ". Reference had previously been made to ss 91R to 91V of the Migration Act 1958 (Cth). The Appellant accepted during the hearing of the appeal that he had no knowledge of the content of those statutory provisions. 27 The fundamental difficulty with any such contention remains the fact that -- whatever provision of the Migration Act may be pointed to -- the now Appellant was unsuccessful before the Tribunal for the simple reason that his claims were found to be a " fabrication " and that he was found not to be a credible witness. 28 There is no substance in the third Ground of Appeal and it too is rejected. PRO FORMA GROUNDS OF APPEAL? 30 One further submission advanced on behalf of the Respondent Minister raises disturbing issues and should be separately addressed. 31 That submission was that the second and third grounds were but " pro forma " grounds of appeal. Counsel for the Minister referred the Court to the fact that these two grounds had a disturbing correspondence with those grounds advanced in SZLAH v Minister for Immigration & Citizenship [2007] FCA 1807 and SZINJ v Minister for Immigration & Citizenship [2007] FCA 1742. That the Appellants submitted the evidence to the effect the amount of the persecution which has been committed to the applicant, the RRT did not give any consideration, instead the appearance of the applicant was made the issue before the RRT, which in accordance with the law is not required. The appellant made out a case which really requires the judicial inference of this honourable Court to meet the ends of justice. 3. That the Respondents have failed to assess the claims made by the appellant as per the refugee laws as laid down by the handbook of the UNHCR. The real meanings were not taken into the consideration by the RRT & by the learned Court below. That the Appellants submitted the bundle of evidence before the RRT, the RRT did not gave (sic) any consideration, instead the appearance of the (sic) was said to not (sic) plausible, as such the evidence was not taken in to consideration, the appellant made out a case which really requires the judicial inference of this honourable Court to meet the ends of justice. 3. That the Respondents have failed to assess the claims made by the appellant as per the refugee laws as laid down by the hand book of the UNHCR. The real threat to the life of the Appellant was not considered in the instant case. 33 In circumstances where a litigant is unrepresented, it is not considered that any impediment should be placed in the path of such a litigant obtaining the assistance of those upon whom he may properly place reliance. One litigant may have obtained the advice of a legal practitioner and attempted to pass on the benefit of such advice to others. The source of assistance may also be other litigants who have faced comparable circumstances and prevailed in having their grounds accepted by the Federal Magistrates Court or this Court. As Counsel for the Minister submitted, it would be surprising if there was not an exchange of grounds of appeal amongst those persons at immigration detention centres , either within a particular centre or perhaps more broadly throughout the country. 34 Difficulties, however, may emerge for a number of reasons. 35 First, there is a self-evident difficulty if a ground which may have prevailed in one set of circumstances is sought to be transposed to different proceedings in which the ground is simply not apposite. The success of a particular argument in the circumstances of a particular case obviously does not mean that the same argument will always prevail and does not mean that the argument is even appropriate to be advanced in other proceedings. 36 It may well be understandable that an unrepresented litigant may wish to call upon all possible arguments and that an unrepresented litigant may well lack the ability to discern whether an otherwise successful argument is even relevant to his own circumstances. Indiscriminate reliance, however, upon arguments transposed from other proceedings may simply provide false hope to the unrepresented. And indiscriminate reliance upon grounds divorced from the circumstances of the particular proceedings under consideration may well only serve to detract from such prospects of success as an application may otherwise present. 37 Second, and a matter of equal importance, is the prospect that unrepresented litigants may be obtaining the advice of persons holding themselves out as being able to provide advice and assistance. The fact that the same (or substantially the same) grounds are being relied upon in different proceedings extending over a not inconsiderable period of time only provides a basis for speculating as to whether unrepresented litigants are not merely passing between themselves ideas as to how best to present their appeals, but whether there may be a more focussed source of advice being accessed by the unrepresented. 38 It is of importance to ensure that unrepresented litigants have access to advice and assistance. But purported advice and assistance which is not directed to the facts and circumstances of a particular case does indeed lead to uninformed " pro forma " advice which does little to assist the unrepresented and little to assist either the Federal Magistrates Court or this Court in the resolution of challenges to decisions of the Refugee Review Tribunal. 39 If there were to be a more focussed source of advice being proffered to unrepresented litigants, being advice which is merely " pro forma " in nature and divorced from the merits of an individual case, it may be appropriate for costs to be ordered against those providing such advice rather than the unrepresented appellant: SZJJC v Minister for Immigration & Citizenship [2008] FCA 614. Even more fundamental issues may emerge if advice were being provided contrary to legal practitioners' legislation. 40 Reference was also helpfully made by Counsel for the Respondent to ss 486E --- 486K of the Migration Act 1958 (Cth). Section 486E provides in part that " a person must not encourage another person ... to commence or continue migration litigation in a court if the migration litigation has no reasonable prospects of success ". And s 486F provides an additional and more specific power to order costs against a person who contravenes s 486E. At some stage, and in an appropriate case, consideration may have to be given to invoking that power. 41 The problems faced by unrepresented litigants have of course long been recognised: eg, Managing Justice: A Review of the Federal Civil Justice Scheme (Australian Law Reform Commission, Report No 89, 2000) at [5.147]---[5.157]. Indeed, regrettably, it would appear that little may have changed in a period extending over a decade since the inception of that inquiry. It is the experience of my colleagues, as well as myself, that a large proportion of these matters are commenced by a stereotyped form of application that is uninformative and bears little relationship to what the applicant says at the hearing. It seems the filing of an application for review has become an almost routine reaction to the receipt of an adverse decision from the Tribunal. The solution is not to deny a right of judicial review. Experience shows a small proportion of cases have merit, in the sense the Court is satisfied the Tribunal fell into an error of law or failed to observe proper procedures or the like. In my view, the better course is to establish a system whereby people whose applications are refused have assured access to proper interpretation services and independent legal advice. If that were done, the number of applications for judicial review would substantially decrease. Those that proceeded would be better focussed and the grounds of review more helpfully stated. If applicants cannot afford legal advice, as is ordinarily the case, it ought to be provided out of public funds. The cost of doing this would be considerably less than the costs incurred by the Minister under the present system, in instructing a solicitor (and usually briefing counsel) to resist all applications, a substantial number of which have no merit and are ill-prepared. That is to say nothing about the desirability of relieving the Court from the burden of finding hearing dates for cases that should not be in the list at all. The difficulty, it is respectfully considered, is not to be answered merely by the provision of greater access to legal advice. Challenges to decisions of the Refugee Review Tribunal may not be motivated in all cases by a careful consideration of the relevant legal principles and an assessment of the prospects of success. Those challenges, it is suspected, may in some cases be driven more by a determination to remain in Australia for as long as possible, whatever may be the ultimate prospects of success in the courts. And even more disturbing is the potential that some challenges may be pursued by unrepresented litigants who have been given ill-considered advice as to their prospects. 42 The problems posed by unrepresented litigants are not theirs alone. The unrepresented litigant also presents this Court with peculiar problems, and those problems are not helped by repeated applications being brought with grounds of review or appeal which have little, if any, correlation with the facts of a particular case. The estimate as to costs did not include such additional costs as would necessarily be incurred by reason of the Court seeking the further assistance of Counsel for the Minister on a number of issues raised during the course of the hearing. Such additional costs were estimated in oral evidence to be a further $750, 75% of which was sought to be added to the fixed costs order otherwise sought -- namely, a further sum of approximately $560. 44 No reservation is expressed with respect to the quantification of the additional amount; some reservation is expressed as to the quantification set forth in the Affidavit . That estimate may well be approaching the upper limit of what is appropriate to include in a fixed sum order, as opposed to ordering that costs be taxed. In the circumstances, however, it is considered that the order for costs should be made as sought. The appeal be dismissed. 2. The Appellant to pay the costs of the First Respondent fixed in the sum of $2,960. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | impermissible challenge to the merits of a decision pro forma grounds of review migration |
The effect of his Honour's reasons, which was reflected in the orders that he made subsequently after the parties had conferred, was to grant to the respondent (collectively 'Griffin') an application pursuant to O 15A r 6(a) of the Federal Court Rules (FCR) for preliminary discovery. That requires it to be established that 'there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained'. 2 The notice of motion for leave to appeal is supported by an affidavit of M/s Eversden, a solicitor of the ERC's solicitors sworn and filed on 22 September 2006. 3 The grant of leave from an interlocutory order is governed by the principles stated by the Full Court in Décor Corp Pty Limited v Dart Industries Inc (1991) 33 FCR 397 as recently affirmed by the Full Court in Brilliant Digital Entertainment Pty Limited v Universal Music Aust. Pty Limited (2004) 63 IPR 373 ( Brilliant Digital 63 IPR). An appeal from a discretionary decision by a trial judge itself attracts special principles, the test being whether the primary judge's discretion miscarried, by reason of some error of principle: Cadence 58 ACSR at 22 and the authorities there cited. 5 The decision of his Honour involves a matter of practice and procedure: Hooper v Kirella Pty Ltd [1999] FCA 1584 ; (1999) 96 FCR 1, at [6]. It also involves, in part, the application of a discretion. Whenever WPC had a need to acquire what is referred to as 'substantial new generation' capacity it must procure such capacity through a non-discriminatory and open public Power Procurement Process (PPP). The PPP which is in issue is that which took place between December 2002 and September 2005 being for the procurement of new generation capacity to meet the requirements of the South West Interconnected System (the main transmission network in the State). From 20 December 2002 to 2 May 2003 parties submitted their expressions of interest and WPC nominated some as qualified to proceed to the next stage. 2. The second stage was referred to as the 'Request for Proposal' (RFP) stage. On 31 March 2004 WPC issued the Request for Proposal Information Memorandum by which the qualified parties were requested to submit a non-binding proposal by 6 August 2004. On that date Griffin submitted a proposal for a coal-fired power station. 3. The final bid stage ran until 22 July 2005. A limited number of parties invited to do so (which included Griffin), compiled and submitted their final bids to WPC. By reason of a Bid Agreement entered into with WPC, Griffin was required to adhere to its final binding proposal to the choice of fuel for the power station that it had nominated in its non-binding proposal. The fourth stage involved negotiation of project agreements with the preferred bidder. They sought production of the invitation, the proposal and any contract, arrangement or understanding by WPC to Wambo with respect to the bid or proposal to construct the new electricity power station. 9 Before his Honour the application by Griffin relied upon the affidavits of Mr Trumble affirmed on 22 November 2005, 8 March 2006 and 3 April 2006. In opposition to the application, WPC relied upon the affidavits of Mr Baden Furphy dated 7 April 2006 and Mr Harvey sworn on 22 February 2006 and 29 March 2006. 10 The grounds for the application for preliminary discovery brought by Griffin were that it required the documents which it sought to have sufficient information to determine whether to commence proceedings against WPC for misleading or deceptive conduct pursuant to s 52 of the Trade Practices Act 1974 (Cth) ( Trade Practices Act ) and/or breach of implied contract. The action was brought as a consequence of Griffin having seen documents relating to the obtaining of environmental improvement from the Minister for the Environment for Wambo's power station. This caused them to believe that there was a substantial difference in the proposed power station that was the subject of Griffin's tender and the proposed power station that was the subject of Wambo's winning tender. 11 Griffin's tender was to build, own and operate a coal-fired power station capable of generating at least 300 MW to 330 MW constantly on a sent-out basis. However Wambo's proposed power station had a baseload capacity of 240 MW and could only generate 320 MW of power by generating a further 80 MW of power through the operation of gas-fired duct booster system which, because of conditions imposed by the Minister for the Environment, could only operate 15 per cent of the time. The result was that Griffin believed that, acting in reliance upon the information supplied by WPC, they proposed a more expensive power station than that proposed by Wambo and thus disadvantaged themselves in the tender process. The first ('the generating capacity representation') was that '[WPC] would only consider tenders that provided for a generated capacity of at least 300 megawatts to 330 megawatts constantly provided on a sent-out basis'. The second (the minimum environmental condition representation) was that '[WPC] would only consider tenders that satisfied the minimum environmental conditions specified in the tender documents'. 13 As his Honour expressed it, in simple terms Griffin said that WPC called for tenders for a 300 MW to 330 MW baseload plant which was required to meet prescribed environmental standards. However, it awarded the tender to a plant with a 240 MW baseload capacity and an 80 MW peaking capacity which did not meet the prescribed environmental standards. 14 In his reasons his Honour made clear that WPC opposed the application, firstly, on the grounds that FCR O 15A r 6(a) could not be satisfied and, secondly, on the basis that as a matter of discretion, relief should be refused. 15 Turning to the first of those issues, his Honour reviewed at some length the evidence of Mr Trumble and Mr Harvey. 16 Turning to Griffin's postulated potential claim for a contravention of s 52 of the Trade Practices Act , his Honour identified the elements required to be established as: misleading or deceptive conduct by WPC, reliance by Griffin and damage. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. The question, applying the test in Rabo , is whether there is evidence in support of the potential claim which elevates the potential claim beyond 'mere assertion' and 'more than suspicion or conjecture'. But this does not mean that, for the purposes of this application, the status of the applicants' postulated potential claim is thereby reduced to a 'mere assertion', 'conjecture' or 'speculation'; nor does it incline the mind against the characterisation of that potential claim as one which may give the applicants a right to relief. It follows that, in my view, the applicants have established that there is reasonable cause to believe that the applicants may have the right to obtain relief founded upon the statements in the press releases issued by the respondent prior to 6 August 2004. The answer which the respondent makes to the potential claim is that the requirements referred to in cl 6.3.1 and cl 6.3.2 did not impose absolute standards, but were only standards that a proponent should 'strive' to meet or exceed. Whether this is a complete answer or not, would be a matter for trial. It suffices to say that the evidence establishes that there is a potential claim for a contravention of s 52 of the TP Act, beyond a 'mere assertion', founded on the representation that the respondent would only accept tenders which satisfied the minimum environmental conditions specified in the tender documents. I, accordingly, find that there is reasonable cause to believe that the applicants may have a right to obtain relief against the respondent founded upon the statement in the Bid Information Memorandum and the Final Bid Invitation which relate to the compliance with environmental conditions. 24 His Honour therefore concluded that Griffin had satisfied the provisions of FCR O 15A r 6(a). There was no issue on satisfaction of other provisions of that Rule. 25 In relation to the discretionary considerations, these were founded on the affidavit of Mr Furphy and related to the confidential character of the bid proposals, submissions, presentations and other documents which record or evidence the content of any proposals submitted by Wambo to WPC. The fact that the documents in respect of which discovery is sought may contain confidential information will not usually in itself be sufficient to cause the Court, in the exercise of its discretion to decline to order preliminary discovery. In this case, the applicants recognise restrictions may need to be imposed upon the number of persons who may be entitled to inspect the discovered documents. That was common ground for the purposes of the application so that his Honour was required to rely only on documents predating that date for evidence of reliance. 28 His Honour referred to the evidence of Mr Trumble in which he identified the documents which had led him to believe that WPC required the proposed power station to have a baseload generating capacity of between 300 MW and 330 MW of power. The first category of documents was Process Updates Nos 2, 5, 12, 13 and 19. These so described the capacity sought. The other categories were documents which arose after 6 August 2004 and so after the date relevant to reliance of the non-binding proposal to which Griffin subsequently became bound by WPC. However, Mr Trumble's evidence at [24] of his first affidavit was that in submitting the proposals of Griffin he relied on all the categories referred to in the relevant paragraphs of his affidavit. Such a plant would have been more economically efficient than a coal-fired baseload plant of similar total capacity. Each contained a disclaimer, prominently appearing at their commencement. They were each expressed to be applicable to 'all information from time to time provided or made available by or on behalf of [WPC] to a Proponent in relation to the process being adopted by [WPC] for the procurement of at least 300 MW to 330 MW approximately of new generating capacity ...'. Therefore, it is said, that his Honour failed to apply the test stipulated by FCR O 15A r 6(a) as explained in St George Bank 211 ALR. 31 The argument made by ERC is that his Honour adopted the test of 'foundation beyond mere assertion' and, in so doing, failed to spell out what inclined the mind towards belief and thus failed to consider all the evidence. It is submitted he adopted a minimum threshold which prevented him from properly applying the test. 32 I however agree with the submissions for Griffin that his Honour did not misunderstand nor did he misapply the proper test for the application of FCR O 15A r 6(a) as explained in St George Bank 211 ALR. Firstly, it is clear from [12] of his Honour's reasons that he clearly understood the appropriate test. In [64] and [91] he expressly used language relevant to the concept of the mind being inclined to belief. It is clear from [82] that he was looking for evidence in support of the potential claim which elevated it beyond 'mere assertion' and 'more than suspicion or conjecture'. When he came to [88] and [92] his reference to elements rising above the status of 'mere assertion' was a shorthand reference to the test which he had earlier more fully set out. His Honour used that shorthand reference in the context of his examination of the evidence quite fulsomely. It cannot properly be said that the shorthand reference caused him to fail to attend to the evidence. What ERC is asserting is that he should have dealt with the evidence in a different way. It is to be borne in mind that Griffin was not required to establish a prima facie case and that the standard of 'reason to believe' constitutes a 'relatively low threshold': The Daniels Corporation International Pty Limited v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 at [130] per Callinan J. This submission is made in the context of the information memorandum and requests for approval which it is said made that inherent probability apparent. However, even if regard is had to those other documents and the place they had at the bidding process, it does not remove the possibility that the Process Updates press releases, notwithstanding there relative brevity, might have been significant in communicating WPC's intentions in relation to power procurement to a wide audience which would have included potential bidders. They were issued over a period of nearly two years and were the only documents upon which reliance could be placed at that time. If there was no clearly articulated change, it might be able to be found that it was reasonable for the audience of potential bidders to assume that later formal documents would relate to the same proposal, albeit providing greater detail. That is, the Process Updates as a source of misrepresentation cannot be ruled out by what might be thought to be their relative primitive character in the chain of documentation processes. Whether in fact the Process Updates could have (a) created a misrepresentation; and (b) were not corrected are issues of fact for trial. The issue before his Honour was whether there was reason to believe Griffin may have a claim in respect of the conduct of WPC, taken as a whole (see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 199) as misleading or likely to be so. As Burchett J said in Lezam 35 FCR at 557 'a disclaimer or qualification will frequently have little or no effect on the impact of a misrepresentation'. 35 In any event, the disclaimers, as have been set out in [55]-[57] of his Honour's reasons, in each of the opening paragraphs of the disclaimers reference is made to the 'procurement of at least 300 MW to 330 MW approximately of new generating capacity', a representation which could only go to reinforce the statements contained in the Process Updates in relation to generating capacity. Further, there was no reference to the power station being anything other than a baseload power station. In short, the disclaimers can be understood as having done nothing to dispel the effect of the Process Updates repeated a number of times over the space of nearly two years. I agree with the submission for Griffin that proper examination of the reasons at [89] and [90] does not support this characterisation. The approach was consistent with the development over time (from June 2002 to August 2004) of Mr Trumble's understanding of what WPC was seeking by the tenders process (he being the relevant directing mind within Griffin). Consistent with the consideration of the documents relied on by Mr Trumble, it was legitimate to ask the question whether anything said by WPC later in the process corrected any supposedly false impression that may have been created earlier, particularly by the 'Process Updates'. His Honour concluded that the later communications did not incline the mind against the characterisation he had earlier given to Griffins' potential claim as one falling within FCR O 15A r 6(1). Secondly, the evidence does not address the apparent conflict between the respondent's stated requirement in the bid information, of the plant's high availability, which Mr Trumble said was in the order of 90 per cent, and the 'capacity factor' referred to of 75 per cent to 80 per cent. Thirdly, after 6 August 2004, the respondent issued, as part of the bid information a terms sheet for the ACA which provided that as a performance requirement, the proponent must ensure that the TCO is available from the Power Station at all times during the term --- a statement, which could arguably be construed as articulating a performance requirement which is consistent with Mr Trumble's understanding of the term 'baseload capacity'. As to the factors mentioned in the second limb of his Honour's reasons, ERC submits that the availability factor drawn from the bid information post-dated 6 August 2004. The reference to 'high levels of availability' is nevertheless contained in documents pre-dating 6 August 2004, but it is said that there is no conflict with that and the statement in the same document referrable to 'expected capacity factor of 75 per cent to 80 per cent'. As to the evidence relied upon in the third factor of the above quoted paragraph, it is submitted by ERC that it fails to take into account certain evidence from Mr Harvey that the reference to 'available at all time' did not mean that the power station must be able to operate at 300-330 MW 100 per cent of the time or a concession by Mr Trumble that no power station operates without interruption. It was never Griffins' case that the power station would in fact be required to operate at full capacity 100 per cent of the time but rather that it should have the capacity to do so. Mr Trumble's evidence recognised this and that is referred to in his Honour's reasons at [84]. It was supported by the Ministerial Statement discussed at [86] and [87]. The availability factor recognised that all power stations require maintenance while the capacity factor recognised the fact of variable demand during 24 hours of operation. What was not disputed was that the Wambo plant, which won the tender, was capable of operating at 320 MW only up to 15 per cent of the time, and concession of this was made by WPC during argument before his Honour. It is clear that his Honour turned his mind to these arguments in his reasons at [90]. 40 I do not consider that any of these alleged factual errors are of such magnitude and significance that if considered, as ERC submits, they would have necessarily caused his Honour to reach a contrary view. That is, it is said that he placed undue weight on the fact that Mr Trumble was not cross-examined as part of determining whether Griffin had established a reasonable cause to believe that they have or may have a right to relief. 42 His Honour was entitled to place weight and did not place undue weight on the fact that Mr Trumble was not cross-examined. Mr Trumble's understanding of the difference between a baseload and a peaking plant was central to his understanding of what it was WPC was seeking by the tender process. Mr Harvey gave considerable affidavit evidence in an endeavour to suggest that Mr Trumble was mistaken in his understanding. This was then addressed by Mr Trumble in his second affidavit of 7 March 2006. His Honour's conclusion at [85] also relied on evidence from other sources which he considered supported Mr Trumble's evidence that his understanding of baseload capacity and peaking capacity accorded with the common understanding of those terms in the power generation industry. In my view no error of law is apparent. ERC submits that none of these Updates purported to set tender conditions or that tenders would only be considered on a particular basis. Further, that only the last of the Updates referred to the 'sent-out' basis and the others referred to baseload capacity. Also, that none of them referred to 'constantly provided' which formed part of the representation under consideration by his Honour in respect of the generated power capacity. Therefore, it is submitted that there is no room for reliance to be made out in respect of the Process Updates press releases. 44 I do not consider that in reaching the conclusion which his Honour did, that there was reason to believe there might be a claim with respect to misrepresentation concerning the generated power capacity arising from the Process Updates, that his Honour was in error in not having regard to the content of those Updates. It was not necessary for them to address tender conditions and that was not the relevance of them here. Each of them (and in combination) is evidence of a representation that what would be sought was a 300 MW (in some cases to 330 MW) baseload generation capacity. The absence of reference to sent-out basis or to 'constantly provided' is an issue to be addressed by other evidence, if at all. There was no error by his Honour in considering that there was reason to believe that the wording in the Process Updates could be the source of a claim if it was otherwise made out. Furthermore, the essential question and issue before his Honour in this regard was whether there had been a resiling by WPC from the requirement that the power station have a baseload generating capacity of 300 to 330 MW of power. 46 This representation is said to have been contained in the Bid Information Memorandum. Bidders must strive to meet or exceed these levels of performance. It is submitted that if the words were given that meaning, his Honour would have been bound to conclude that all the bidders had to do was 'strive to meet or exceed' the levels of environmental performance described therein and there was no evidence before the Court that Wambo did not meet that requirement, so understood. 48 I do not agree with the submission by ERC that the words of this alleged misrepresentation are expressive only of a 'plain meaning'. I accept the submission for Griffin that the alternative interpretation is equally arguable. That interpretation is that the 'minimum standards' which the binding proposal was 'required to meet' and which the power station 'must meet' referred to the bidding stage, while the reference to bidders 'must strive to meet or exceed those levels of performance' addressed the requirements of WPC once the power station was in operation. There was no error by his Honour in reaching that conclusion. For the reasons previously given that submission does not succeed. It is said that his affidavit of 7 March 2006 'was no more than mere assertion'. Further, that he gave no evidence as to how Griffin would have modified its tender. Mr Trumble's evidence was that if Griffin had known that standards were ones which WPC would consider to be satisfied if a bidding party had merely expressed a willingness to endeavour to meet them, Griffin would have modified its proposal and would have been able to submit a final bid at a lower price than that which it did. That evidence was not the subject of cross-examination by WPC. I do not therefore accept that the submissions of ERC disclose an absence of reliance possibly being made out. This is said to be because of the issues dealt with by his Honour under the heading 'Discretionary considerations' and relating to the confidential character of the evidence which is required to be disclosed by WPC in response to the order for preliminary discovery. This is asserted even though his Honour's order is crafted so as to provide restrictions of access in relation to inspection: see [110] and [111] of his Honour's reasons quoted above at [26]. In addition, reliance is placed on the affidavit of M/s Eversden where it is said that if leave is not granted the categories of documents which WPC will be required to make available would contain highly confidential information and that it should not be required to give Griffin access to commercially sensitive information. 52 I agree with the submission for Griffin that there is no evidence which would suggest that the principle in Home Office v Harman [1981] 1 QB 534 should not apply and be observed. Additionally, that any other prejudice from having to make the documents available is a natural consequence of the orders proposed by the trial judge and does not amount to the type of substantial injustice required in this context: Brilliant Digital 63 IPR at [5]-[7]. I further accept that the proposed orders do not affect matters of substantive rights of ERC, which will have every opportunity to advance appropriate arguments should Griffin initiate substantive proceedings. Further, I do not consider that substantial injustice would result if leave were refused, supposing the decision to make the orders to be wrong. This is an issue of practice and procedure and substantive rights remain to be tested in subsequent proceedings. The issues of confidentiality which trouble ERC can be addressed by appropriate directions. The application for leave to appeal will therefore be refused. 54 It will be necessary for his Honour to reprogram the orders which have been the subject of a stay while this application has been heard and determined. | application for leave to appeal application for preliminary discovery alleged misrepresentation concerning tender for power plant generated capacity and minimum environmental compliance whether sufficient doubt in conclusion that 'reasonable cause to believe' claim may exist whether substantial injustice if leave refused procedure |
This application is made pursuant to the voidable transaction provisions of Part 5.7B of the Corporations Act 2001 (Cth) ("the Act "). 2 Mr Tolcher was appointed Liquidator of LSE on 24 July 2001. The payments sought to be avoided were made between 14 February 2001 and 31 May 2001, and total $3,751,861.40. The central issue in this case is whether the amounts sought to be recovered should be characterised as preferential, uncommercial or insolvent transactions as covered by ss 588FA , 588FB , 588FC , 588FE and 588FF and, if so, whether the statutory defence in s 588FG is available to the Capital companies on the basis that they had no reasonable grounds for suspecting that LSE was insolvent. The relevant "creditor" in this case is said to be the Capital companies with LSE in the role of "debtor. The important question here is whether a reasonable person would have entered into the transaction in the light of the above factors. Whereas s 588FA requires that the relevant company and creditor both be parties to the relevant transaction, s 588FB does not require that the creditor be a party to the transaction for the provision to apply. It provides that a transaction is an insolvent transaction if it is either an unfair preference or uncommercial transaction of the company and (a) the transaction is entered into or given effect at a time when the company is insolvent; and (b) the company becomes insolvent because of matters including entering the transaction or a person giving effect to that transaction. It is also agreed that the payments were made from the NAB Office Suspense Account to CFAL on or about the dates specified. The parties are similarly in agreement that immediately prior to each of the above payments being made, the then existing liabilities of LSE to the NAB, as secured by a charge to NAB by LSE, exceeded the reasonable value of all assets of LSE. On 7 July 1995, LSE entered into a P & A Agreement with Capital Corporate. This Agreement provided that Capital Corporate would provide "vendor finance" to LSE, which supplied office equipment to a range of end users in the region of Newcastle and north of Newcastle. This involved LSE approaching Capital Corporate as financiers to buy office equipment, which was then leased to an end user such as a local council, a university or hospital. The equipment was purchased by Capital Corporate and leased to the end user by LSE as lessor pursuant to a lease agreement between the end user and LSE, with the equipment being owned by Capital Corporate at all times and with Capital being the undisclosed principal in the leasing transaction. 12 On 1 July 2000, another P & A Agreement was entered into between LSE and Capital Finance. For all practical purposes, this second Agreement provided for a similar arrangement between LSE and Capital Finance. LSE would receive inquiries from persons who wished to lease equipment and would then request Capital Finance to purchase the equipment and lease it to the end user with LSE acting as agent for Capital Finance. LSE would then collect the rentals from the end users and hold the monies on trust for Capital Finance. From time to time, LSE would account to Capital Finance after deduction of monies owing to it. 13 It was acknowledged in the Agreements that lessees, from time to time, may seek to pay out liabilities under the leasing agreements prior to the due date. In these circumstances, Capital Finance would quote a payout amount for the particular leasing agreement. It was the responsibility of LSE to notify the lessee of the amount of the payout fee. The Agreement also provided for sale of the equipment in circumstances where Capital Finance would agree to sell the equipment to LSE and LSE would agree to purchase it from Capital Finance on the "sale date" for the sale price. The "sale date" was defined as the date on which the leasing agreement relating to that equipment expired at the completion of the contracted rental period, and the "sale price" was the price as agreed between the parties at the time Capital Finance approved the leasing proposal. The sale price included the equipment's residual value plus GST. 14 Problems concerning the management of LSE came to light in mid-December 2000. On 15 December 2000, an unrelated company known as Leasetec Australia Pty Ltd obtained orders against LSE and its principal, Mr Lloyd Scott, in the form of a preservation order restraining LSE from dealing with assets up to an amount of approximately $3.61 million. Leasetec had also been involved for some time in financing LSE in respect of hiring agreements. 15 The making of this order came to the attention of the Capital companies and led to a series of meetings between the representatives and advisers of LSE and the Capital companies to discuss the future of the relationship between the parties and financiers, including Leasetec. These discussions resulted in two Deed Agreement being executed on 12 January 2001 involving the Capital companies, Leasetec and LSE. The agreement of central importance in relation to the characterisation of the transactions and payments the subject of this proceeding is that between the Capital companies, LSE and Mr Scott ("the Second Deed"). The evidence indicates that in December 2000, the full value of the business equipment leases between the Capital companies as lessor with LSE as agent amounted to an amount in the order of $11 million. 16 There is evidence that Mr John Vendrell, Assistant General Manager at Capital Finance, was concerned in mid-December 2000 that LSE was in difficulties. This was apparent from the investigations which commenced following the preservation order obtained by Leasetec. Moreover, it became clear that there had been double financing of equipment by Mr Scott and LSE as well as financing of equipment that did not exist. Mr Tolcher claims that this series of events brought to light the serious possibility of fraud by LSE. This concern ultimately proved to be correct, with Mr Scott being made bankrupt and later pleading guilty to fraud charges, a consequence of which he went to gaol. 18 Finally, the recitals of the Second Deed record that Capital Finance and Capital Corporate no longer wished to provide finance to the lessees under the hiring agreement and that over a period of three months they wished to "reduce the Exposure to nil". The term "Exposure" was defined in the Second Deed as the aggregate at any given time of the Payouts under all the Leasing Agreements plus all amounts otherwise owed by LSE or Lloyd Scott to Capital Finance or Capital Corporate pursuant to the deed or any other agreement between the parties. The expression "Payout" refers to the sum of money required to be paid by a lessee under a leasing agreement to terminate the obligations of the lessee under that agreement. 19 Clause 3 of the Second Deed requires payment of certain sums in respect of rent by specified dates. This clause specifies that on or before 15 January 2001, LSE is to pay Capital Finance $318,053.09 as monthly rental for December 2000. On or before 24 January 2001, there is a further rental payment due in the sum of $298,487.32 as a monthly rent for January 2001. This clause also outlines that until the exposure is reduced to zero, LSE is obliged to remit monthly rental to Capital Finance commencing on 1 February 2002. 20 Clause 4 of the Second Deed requires LSE to reduce the "exposure" and pay out the LSE leases by payment to Capital Finance in cleared funds of amounts on specified dates as follows: the sum of $3 million plus the amount required to be paid by LSE to terminate its obligations to Capital Finance under the LSE leases (which at 12 January 2001 totalled $323,032), on or before 11 February 2001; the further sum of $3 million which was required to be paid on or before 11 March 2001; and thereafter $4 million which was to be paid by LSE before 11 April 2001. The clause specified that following this payment, the balance was to be paid on or before 11 May 2001. 21 The Second Deed, and in particular Clause 4, are central to the case advanced for the liquidator, Mr Tolcher, in relation to recovery of payments which are the subject of this proceeding. NAB statements illustrate that amounts equal to the first three challenged payments were debited to the account of LSE in respect of three leases, and that corresponding credits were recorded in the Office Suspense Account. These amounts were then deposited to the account of Capital Finance on 14 February 2001. An email from Ms Katherine Foreman of Capital Finance to Mr Vendrell dated 15 February 2001 records that the three "payouts" were deposited on 14 February 2001. The amounts due were shown by "Payout Quotes" sent by Capital Finance to NAB on 12 February 2001. There is also in evidence an NAB Office Suspense Account statement in relation to later payments made in a similar manner in May 2001 in respect of the payout of the other leasing agreements with LSE. All payments noted in the above table are the payments which are challenged as voidable in this proceeding. 22 The dispute can be considered by reference to the headings as set out below. It is submitted that that when the dealings between the Capital companies, LSE and the NAB are considered as a whole, there was no debtor-creditor relationship between LSE and Capital Finance at the time of the payments. The Capital companies say that the payments represented a "sale" transaction between NAB and Capital Finance, where NAB agreed to buy out and pay for the equipment and rights which were the property of the Capital companies. It is then submitted that because the true characterisation of the transaction was a "sale," a failure to comply with an obligation to acquire goods or property at a specified price can only give rise to an action for damages: see McDonald v Dennys Lascelles Limited [1933] HCA 25 ; (1933) 48 CLR 457 at 475; Box Valley Pty Limited v Kidd [2006] NSWCA 26. An action for damages is not a "debt": Jelin Pty Ltd v Johnson (1987) 5 ACLC 463 at 464; Molit (No. 55) Pty Ltd v Lam Soon (Australia) Pty Limited (1996) 21 ACSR 157 at 159. The Capital companies say that the payments in question were part of the purchase price and were made by NAB on its own account as purchaser of the leased equipment from Capital Finance. 24 Central to the characterization of the payments is the Second Deed as executed between the Capital companies, LSE and Mr Scott and the transactions which resulted in the payments in suit. 25 The expression "transaction" is defined in s 9 of the Corporations Act 2001 (Cth) to include the disposition of property, payments made and obligations incurred. The case law indicates that the term "transaction" is a word of wide connotations. A transaction in its totality may include a series of events in a course of dealings initiated by a debtor intended to extinguish the debt: Re Emanuel (No. 14) Pty Ltd (in liq) ; Macks & Anor v Blacklaw & Shadforth Pty Ltd (1997) 147 ALR 281 at 288. The events can occur at different points of time and need not occur simultaneously. The Court must consider the transaction in its entirety so that it can determine the ultimate effect of the transaction. 26 In V.R. Dye & Co v Peninsula Hotels Pty Ltd (in liq) [1999] VSCA 60 ; [1999] 3 VR 201, Ormiston J at [39] pointed out that to properly characterise a transaction, it is necessary to look at the totality of the business relationship between the parties in order to see whether there is a true preference in favour of a creditor by the insolvent company. The Court will look at what the parties are intending to effectuate and how that was effectuated in part or in whole by the transactions in question: see also Mann v Sangria Pty Ltd (2001) 38 ACSR 307. • Each payment was initiated by LSE to satisfy the obligations imposed on and bestowed by LSE to Capital Finance under the Second Deed in order to reduce the "exposure" as referred to in Clause 4 of that Deed. The Capital companies submit that the Second Deed formed part of an overall arrangement whereby NAB would purchase the goods from Capital Finance in return for the payments, effectively becoming a substituted financier so that the end hirer would continue to lease goods from LSE as owner or lessee under the Master Lease Agreement. It is contended by the Capital companies that Clause 4 requires LSE to incur an obligation to reduce of the exposure of the Capital companies under the lease arrangements previously existing in accordance with the P & A Agreements between LSE and the respective Capital companies. Capital says that this was to be done by arranging alternative finance, and that the Second Deed did not impose an obligation upon LSE as debtor. It is submitted that the proper characterisation of the arrangements leading up to the payouts, when looked at in their entirety, should be viewed as a sale transaction where NAB agreed to buy out and pay for the equipment and rights of the Capital companies. Furthermore, the Capital companies add, a breach of an agreement to procure a reduction in exposure does not give rise to a debtor-creditor relationship, although it may expose the party in breach to an action for damages. In summary, the position of the Capital companies is that the refinancing arrangement involved items of equipment being acquired by NAB and that this was the way the transaction was seen by bank officers Ms Belinda Cook and Mr Garry Green, who were called on behalf of the respondents to give evidence. 30 It is clear from the authorities that the Court is concerned to determine the nature of a transaction in issue as an objective matter. The views of individuals involved in the transaction do not determine the true characterisation of the transaction, although they may be of some assistance. It is also noteworthy that Capital Finance lodged an informal proof of debt as an unsecured creditor in the winding up on or about 29 June 2001 claiming an unsecured debt of $7,162,151.84. 31 In support of the contention that the transaction, properly characterised, did not involve the purpose or effect of discharging any unsecured indebtedness on the part of LSE, the Capital companies point out that prior to 12 January 2001, no debtor-creditor relationship existed because the arrangements between the Capital entities and LSE were in the form of Principal & Agency Agreements whereby the agent was simply the conduit for the transmission of funds for the Capital companies. The respondents submit that if the effect of the Second Deed was, as is contended by Mr Tolcher, to create a new obligation to pay out more than $10 million, then this was a dramatic and inexplicable change in the relationship between the two companies which is extraordinary from a commercial perspective. It is said by the respondents that from the viewpoint of LSE, it was an extremely unfavourable transaction involving an obligation to pay a large sum which was not previously due. 32 The difficulty with this construction is that the language of Clause 4.1 obliges LSE to reduce the exposure by payment in cleared funds of specific amounts on specific dates. The obligation is not simply to reduce the "exposure" but rather to reduce the exposure by making specific payments in a defined time-frame. The phrase "by payment to CFAL in cleared funds" prescribes the way in which the exposure must be reduced. The obligation is imposed on LSE. There is no reference to simply procuring the reduction or effecting a reduction. 33 There is force in the submission by the Capital companies that the transaction is disadvantageous from a commercial view point so far as LSE is concerned. However, the evidence indicates that in the period leading up to execution of the Second Deed there were strong indications of mismanagement on the part of Mr Scott in relation to "duplicated" transactions and "non-existent" equipment. As early as 19 December 2000, Mr Vendrell refers in an email to Ms Foreman that Mr Scott was "in the poo. " It became apparent at approximately this time that Mr Scott had been involved in the double-financing of $3.8 million of LSE contracts. In a Memorandum of 21 December 2001 addressed to Mr Bernie Campbell, Mr Vendrell refers to actions that will be taken "in the event of LSE insolvency. " In another Memorandum from Mr Vendrell dated 12 January 2001, there is reference to a proposed plan put forward by Mr Scott on 9 January 2001 seeking to hold back an investigation by Ferrier's Investigating Accountants so that he could do some necessary deals to ensure that himself and LSE would be immune from criminal prosecution. This Memo also notes that at meeting of 11 January 2001, a final deal was brokered where a verbal undertaking was given by Capital Finance and Leasetec that they would not pursue prosecution of LSE or Mr Scott if the arrangements relating to the payouts were adhered to. They did not agree, however, to grant LSE and Mr Scott immunity from prosecution. In addition, there is a reference in a Leasetec File Note dated 10 January 2001 that Mr Campbell had discussions with Mr Scott during which Mr Campbell mentioned that the research of Capital Finance indicated that LSE had possibly engaged in more double-financed deals. It is noted that Mr Campbell used the words "embezzled" and "fraud" in these discussions and Mr Scott had not disagreed. 34 In my view, Mr Scott's fear and the threat of prosecution provides an explanation for why Mr Scott committed LSE to the payment obligations under the Second Deed of 12 January 2001. I consider that the language used in Clause 4 of that Deed is clear and unambiguous and that it had the effect of creating a debtor-creditor relationship between LSE and Capital Finance. I do not accept that the agreement was simply one which gave rise to an action for damages in the event of a failure to pay. In my view, Clause 4 is a promise to pay a liquidated amount. 35 Nor do I accept that the arrangements under the Deed and the challenged payments in their context constituted a sale agreement as between NAB and Capital Finance whereby payments were made by NAB in exchange for equipment and associated rights belonging to Capital Finance. 36 There is no Agreement in evidence which would constitute a contract for sale relating to the equipment or rights where NAB was under any obligation to make payments of monies on its own behalf to Capital Finance. The subjective beliefs of Ms Cook and Mr Green do not establish that such an agreement existed, and it is of some significance, in my view, that no satisfactory explanation was advanced as to why Ms Foreman was not called. 37 Having regard to the clear language of the Second Deed, I am satisfied that the arrangements in place for payment of the obligations under that Deed resulted in LSE approaching the NAB in January --- February 2001 to obtain funds necessary for it to meet the obligations of LSE as specified under the Deed. This had the consequence that Capital Finance obtained payment in full of the debts created by the Deed at the time when LSE was insolvent. 38 I do not consider that any different view is tenable having regard to the matrix of agreements and records in evidence, including the P & A Agreements between LSE and the Capital companies; the Deed of Charge given by LSE to NAB, the Master Leasing Agreement between LSE and NAB; the payout invoices; the existence of the NAB Office Suspense Account and the NAB bank statements. 39 Accordingly, I am satisfied that there was a debtor-creditor relationship, that the transaction was constituted in the way contended for by Mr Tolcher, and that the challenged payments were made in order to pay out the debt incurred by LSE to Capital Finance under the Second Deed. The "winding up" as referred to in the statute is the actual winding up, and not a hypothetical winding up or series of windings up as at the date of each payment: see Walsh v Natra Pty Limited [2000] VSCA 60 ; (2000) 1 VR 523. 41 In this case, the unsecured debt owed by LSE to Corporate Finance under the Second Deed was discharged in full as a result of the challenged payments, whereas unsecured debts to other creditors were not reduced. 42 The affidavit of Mr Tolcher of 23 August 2006 shows that Capital would have received substantially less if it had proved in the winding up of LSE as unsecured creditor. He states that the Capital companies will have received as a result of the transactions a net value of $3,751,861.40, whereas if they had proved in the winding up they would have received either $1.345 million or a lesser amount. It is not necessary, having regard to the language of the section, to direct attention to the effect on other creditors: see Walsh at [47] and Sheldrake v Paltoglou [2006] QCA 52 at [9] . 43 With each payment, Capital Finance became less exposed to LSE in respect of its unsecured debts. It was preferred because its debts were wholly discharged by the payments whereas other creditors were required to prove in the winding up. LSE received nothing of equivalent value as a result of the payments apart from the discharge of its debt. In these circumstances, I am satisfied that the requirements as outlined under s 588FA have been established. WERE THE CHALLENGED PAYMENTS MADE BY LSE? Payments were made to Capital Finance from the Office Suspense Account which was credited with the eight payments in the period of February --- May 2001. Credit was created by drawing down the lease finance account of LSE for the full amount of the lease finance, which equated to the value of the lease over its full term. The credit amount in the Office Suspense Account was then electronically transferred to Capital Finance. NAB opened a number of lease finance accounts with debit balances in the name of LSE as customer in respect of each lease, from which the amounts to be paid to Capital Finance were drawn down and credited to the Office Suspense Account. The statements indicate that NAB treated the each lease finance account as a form of borrowing. In my view, the NAB Office Suspense Account was simply a conduit through which money borrowed by LSE from NAB was paid to Capital Finance with the authority of and by arrangement between NAB and LSE. I am satisfied on the evidence that LSE authorised or directed NAB to make the challenged payments. Therefore, these payments must be treated as having been paid, not by NAB on its own account as purchaser, but under the authorisation of LSE. WAS THE TRANSACTION UNCOMMERCIAL? 46 The test under this section is objective. There is no doubt that LSE was a party to the transaction which I have found to exist consisting of the entry into the Second Deed and subsequent steps taken to discharge the payment obligations of LSE created by that Deed. 47 The direct legal effect of the Second Deed was that Capital Finance benefited by obtaining repayment of the entire debt due to it under that Deed, whereas prior to the execution of the Deed there was no obligation to make such payments. LSE thereby incurred a very substantial debt for the first time at the request of Capital Finance without any equivalent or corresponding financial benefit to LSE. On the evidence before me, it can be reasonably inferred that an important consideration present in the mind of Mr Scott when entering into the Deed was that by making the new arrangements he could reduce the risk of any threatened prosecution of himself and LSE. 48 The Capital companies submit that the purpose of the provisions relating to uncommercial transactions is to ensure that unsecured creditors are not prejudiced. It is said that at the time when the payments were made, the debt owing by LSE to NAB greatly exceeded the value of LSE's assets, and that therefore LSE had no assets available to unsecured creditors when those transactions took place. It follows, it is submitted, that there was no prejudice to the unsecured creditors. 49 I do not accept this argument as a basis for demonstrating that the transactions were not uncommercial. It is clear that on 12 January 2001, LSE entered into an uncommercial transaction to its detriment by assuming debts which it otherwise did not have to pay. LSE subsequently took steps to give effect to those obligations pursuant to the Deed in circumstances where it received no corresponding or equivalent benefit. 50 The fact that NAB may have also suffered detriment as a result of the arrangements does not persuade me that the Deed entered into by LSE on 12 January 2001 and the payments pursuant thereto were not uncommercial transactions within the meaning of the section. Accordingly, I reject the submission that the payments did not constitute uncommercial transactions. The onus of establishing this defence rests on the respondents and it has not been discharged. 52 There is evidence that in mid-December 2000, Capital Finance became aware of the proceedings instituted by Leasetec, and that by late December it had decided to terminate its business arrangements with LSE. In an email written on 19 December 2000 to Ms Foreman, Mr Vendrell referred to Mr Scott being in deep trouble and expressed the view that if Capital Finance "played its cards right" and "with a bit of luck," it could be out of the arrangement with LSE by the end of February. NAB ...[is] presently unaware of the depth of the problem. It is likely that they will appoint a receiver once the full details are known. As evidenced by the Leasetec File Note dated 10 January 2001, Capital Finance was aware that issues in relation to embezzlement, fraud and further duplications had been put to Mr Scott, who had not denied the allegations. The Memos written during this period illustrate that there had been the suggestion of possible prosecution. There was also reference to a suspicion about the misallocation of funds. Clear evidence of inadequate record keeping by LSE was available to Capital Finance by the end of December 2000 and was discussed in the report to Mr Vendrell by the National Consulting Group dated 2 January 2001. This is a factor to take into account. That report referred to Mr Scott being unaware of and unable to locate records and noted his inability to trace inflows and outflows during previous months. There was also reference to Mr Scott's lack of credibility and to his financial exposure, together with an admission by Mr Scott of responsibility for duplication in financing in several instances. 54 The two Deeds entered into on 12 January 2001 were designed to end the relationship by removing Capital Finance from the leasing arrangements and enabling it to obtain a complete payout by LSE. After 12 January 2001, Capital Finance was aware that LSE had failed to meet its obligations as outlined under the Deeds and payments had not been made on time. It seems reasonable that this would have served to reinforce the reasonable suspicion of Capital Finance as to the insolvency of LSE. By 22 March 2001, both Capital companies were actively considering the appointment of a provisional liquidator and a forced sale of the business. It was clear that the problems with LSE were not simply due to administrative mismanagement. In my view, there is an available inference to the effect that Mr Vendrell had reasonable grounds to suspect insolvency by the time of the first payment on 14 February 2001. These suspicions would have been strengthened thereafter by the instances of non-compliance and further investigations into the affairs of LSE. 55 Mr Tolcher also relies on the fact that Ms Foreman, who was the addressee of Memoranda from Mr Vendrell, was not called to give evidence. Ms Foreman was a Capital Finance employee who was involved with LSE in relation to the transactions. In my view, the principles in Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 and Cook's Construction Pty Limited v Brown [2004] 49 ACSR 62 at [31]-[36] and [41]-[42] are applicable in the present circumstances to reinforce the available inference that officers of Capital Finance had reasonable grounds to suspect insolvency. Cook's Construction is of specific relevance because it considers the operation of s 588FG. Mr Tolcher also points out Mr Joseph, who was the solicitor for the Capital companies as at December 2000, was not called to give evidence in relation to this matter. 56 I am not satisfied that the Capital companies have discharged the statutory onus to enable reliance on the defence provided by s 588FG of the Act . I am not persuaded that Capital Finance had no reasonable grounds to suspect that the company was insolvent at the time the payments were made. I direct the applicants to bring in Short Minutes to give effect to these reasons at a time to be arranged with my Associate. At that time, I will hear the parties on costs. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | whether transactions relating to payments made to the first respondent should be construed as preferential, uncommercial or voidable transactions whether debtor-creditor relationship existed between first respondent and company subsequently declared insolvent at the time the challenged payments were made whether payments were made to first respondent by company or another entity whether totality of arrangements and payments should be construed as a "transaction" whether statutory defence can apply on basis that the respondents had no reasonable grounds to suspect that the company was insolvent. corporations |
The background to the motion is set out in two previous interlocutory judgments which I delivered in relation to what is broadly the same dispute: see Williams v Automotive, Food, Metals, Engineering, Printing Kindred Industries Union [2009] FCA 86 , and Williams v Automotive, Food, Metals, Engineering, Printing Kindred Industries Union (No. 2) [2009] FCA 103. I shall assume that the reader of these reasons is familiar with that background, and with the terminology used in my previous reasons. The applicant, John Holland Pty Ltd, is a building construction company involved in a major project of works on the West Gate Bridge ("the project"). The first respondent, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the AMWU") and the second respondent, the Construction, Forestry, Mining and Energy Union ("the CFMEU") are organisations registered under the Workplace Relations Act 1996 (Cth) ("the WR Act"). The third respondent, Mick Powell, is an organiser in the employ of the CFMEU, and the fourth respondent, Tony Mavromatis, is an organiser in the employ of the AMWU. The fifth respondent, Mick Bull, is not the subject of the present motion. The Australian Building and Construction Commissioner has intervened in the public interest pursuant to s 71 of the BCII Act. I shall refer to him as the intervener. I heard argument on the motion on 10 March 2009, and subsequently received short written submissions from the parties. On 11 March 2009, I imposed a limited restraint upon the respondents, operative only for the period during which I reserved judgment on the applicant's motion. In the second of my previous interlocutory judgments, I referred to the circumstance that, on 8 February 2009 or thereabouts, Civil Pacific Services (Vic) Pty Ltd ("Civil Pacific") made an agreement with the AMWU and the CFMEU, applicable to work on the project, which would, it seems, have obliged Civil Pacific to pay higher wages than had previously been paid by that company on the project. I referred also to Civil Pacific's request to the applicant for a consequential adjustment to the contract pursuant to which it was then providing labour for the project. Evidence now before the court establishes that the applicant did not agree to that request, and that Civil Pacific withdrew from the project on 2 March 2009. It seems that, there being no further need for the services of the workers who had been engaged on the project, the employment of those workers was then terminated by Civil Pacific. Since 3 March 2009, the respondents and others with whom they are associated in their dispute with the applicant have maintained a presence outside the applicant's office at 275 Williamstown Road, Port Melbourne, which is the head office for the project ("the project office"). The applicant describes this presence as a picket line, while the respondents describe it as a protest. The applicant says that the respondents' purpose is to prevent or hinder those working in the project office, and others having lawful reasons to attend there (particularly workers applying for employment on the project), from entering the building. The respondents say that their purpose is to protest against the involvement of the applicant in the dismissal of the Civil Pacific workers, and to advance their claim that the applicant should enter into a site agreement for the project with the AMWU and the CFMEU. I shall commence by referring to the evidence as contained in the affidavits filed in support of, and in opposition to, the applicant's motion. To the extent that I make findings of fact, they are, of course, provisional and intended to be used only for the purpose of deciding first whether the applicant has a prima facie case in the sense explained in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 (and if so what is the apparent strength of that case) and secondly where the balance of convenience lies. On the morning of 3 March 2009, Mr Marshall, the applicant's General Superintendent for the Southern Region, was informed that there was a picket line outside the project office. At about 7.30 am that day, he arrived at the office, and saw a number of men standing around one of the pedestrian entrances thereto. Most of them had either AMWU or CFMEU logos or badges on their clothing. One of them approached Mr Marshall and said: "What are you going to do about our jobs?". Another asked him: "What are you going to do with us?". Mr Marshall asked if he could speak to a spokesman or representative of the group. He was advised to speak to Mr Powell. Mr Marshall walked to the front entrance of the office, and was approached by Mr Powell and Mr Gareth Stephenson (an organiser of the CFMEU). According to Mr Marshall, Mr Mavromatis was also present, but, according to the affidavit of the respondents' solicitor, Mr Trevor Clarke, Mr Mavromatis was not present. Mr Marshall indicated to these men that he would like to have a discussion with them. In his affidavit sworn on 6 March 2009, Mr Marshall said that he told them that he would like to have a meeting to discuss the picket line that was then occurring. Mr Clarke was informed by Messrs Powell and Stephenson, however, that Mr Marshall merely asked whether they wanted "to catch up and have a chat". Messrs Powell and Stephenson (and, according to Mr Marshall, Mr Mavromatis) indicated that they were happy to have a meeting. After that conversation, Mr Marshall continued towards the front entrance of the project office. At the entrance, according to him, Mr Marshall encountered eight or ten persons lying or sitting on the steps, blocking his way. He recognised some of them as former Civil Pacific employees. They were wearing clothing with AMWU or CFMEU badges or insignia. As Mr Marshall approached the entrance, these individuals moved slightly, but made some remarks towards him, including, "Gary, nice to see that you have got a fucking job". According to Mr Clarke, neither Mr Powell nor Mr Stephenson observed any persons lying on the steps, and Mr Powell observed Mr Marshall entering the entrance to the project office without any impediment. Mr Marshall did arrange a meeting as discussed between himself and Messrs Powell and Stephenson (and, according to him, Mr Mavromatis). It was held at 9.00 am on 3 March 2009 at the applicant's office in Abbottsford. The meeting was attended by Messrs Marshall, Powell, Stephenson and Mavromatis, and by some other staff of the applicant, including Mr Bradd Hamersley, the applicant's Regional HR/IR Manager for the Southern Region. The meeting was chaired by Mr Hamersley. Although there is a dispute as to the words he used, it is common ground that, at about the start of the meeting, Mr Hamersley inquired of the union representatives what was the purpose of their presence at the project office. According to Mr Hamersley, Mr Stephenson asked what the applicant was going to do with the former Civil Pacific employees, and asked whether it was going to give them jobs. That led into a discussion about the terms and conditions under which those persons would be employed on the project, if they were so employed directly by the applicant. Mr Hamersley said that the applicant intended to engage direct employees under an existing agreement between itself and the Australian Workers Union ("the AWU") called the John Holland Southern Region Agreement ("the Southern Region Agreement"). That agreement was made under Part 8 of the WR Act. That led to a debate about whether the Southern Region Agreement appropriately covered all the categories of employees that were likely to be working on the project, particularly boilermakers. The union representatives contended that it did not, while the applicant's representatives contended that it did. The parties at the meeting then discussed the general nature of the relationship between the applicant, on the one hand, and the AMWU and the CFMEU, on the other hand, in relation to the project. At some point, Mr Mavromatis said that the reason for the action being taken by the respondents at the project office was the termination of the employment of the former Civil Pacific employees. There was reference to what the union representatives described as "freedom of association", in the sense that, according to them, the applicant was proposing to force direct employees, including any that may have previously been employed by Civil Pacific, to work under the Southern Region Agreement. According to the affidavit material filed on the present motion, from this point the nature of the discussion became somewhat more robust, and ultimately the union representatives left the meeting, clearly dissatisfied with progress. Before they did so, Mr Mavromatis made it clear that there had to be an agreement for the project between the CFMEU, the AMWU and the applicant. I shall go no further in my provisional findings about what was said at this meeting, both because of the nature of the differences between the relevant evidence proffered by the parties (which, at least in the way those differences were described by Mr Clarke, appears to be concerned substantially with whether the union representatives used the expression "picket line", or the expression "industrial action", and with the extent to which the various representatives accompanied their contributions to the conversation with coarse expletives) and because further elaboration does not appear to be necessary for the limited purposes of the motion presently before the court. After the meeting at Abbottsford, Mr Marshall returned to the project office. Upon arriving, he saw about 30 people standing on Williamstown Road itself, on the median strip and on the kerb outside the front entrance to the office. He saw large CFMEU flags and one large AMWU flag. As he entered the office, he noticed that Messrs Mavromatis, Powell and Stephenson were conducting a meeting with those present. Mr Stephenson was speaking through a megaphone, and Mr Marshall heard the expressions "stick it out" and "workers' rights". After the meeting, those present remained where they were and waved flags at passing traffic. They dispersed at around 12.30 pm. At 2.00 pm on 3 March 2009, Mr Marshall held a meeting with the staff then working at the project office. According to him, some of the female staff members were visibly anxious and upset, and were concerned about what would happen when they left the office for lunch. Two of them told Mr Marshall that they felt intimidated as they entered the office. One of them referred to a comment made to her as she was entering, in the following terms: "Why are you lucky enough to have a job and I haven't?". Mr Marshall exhibited to his affidavit a file note made by Mr Alan Foster, an IR/HR Manager employed by the applicant. In that file note, Mr Foster refers to his arrival at the project office on 3 March 2009, when he encountered two groups of persons protesting outside the project office. He was approached by Mr Powell. Mr Powell asked: "When are John Holland going to get the blokes a job?". Thinking that Mr Powell was referring to the former Civil Pacific employees, Mr Foster said that he understood that a number of them had lodged their CVs online the previous night, and that he (Foster) intended to commence processing their applications that day. Mr Powell questioned why the applicant would not simply employ all the former Civil Pacific employees immediately. Mr Foster responded that it was necessary to follow what he described as "due diligence processes". Mr Powell asked when they were going to talk about an agreement. Mr Foster responded that he would pass on this question to Mr Marshall, to which Mr Powell said that he (Foster) should let Mr Marshall know that he (Powell) had asked. On 4 March 2009, Mr Marshall arrived at the project office at about 8.00 am. He saw about 40 persons gathered standing outside the front entrance. He did not recognise many former Civil Pacific employees. He did recognise "a lot more union officials" than had previously been present. Messrs Mavromatis, Powell and Stephenson were present. Mr Marshall also saw what he described as "a CFMEU camper/barbeque trailer", and two marquees, set up on the front garden of the project office. Mr Marshall says that he saw some of the persons present urinating on the project office building and on the front garden. According to Mr Clarke, Messrs Mavromatis, Powell and Stephenson deny that anyone so urinated, and say that they had no knowledge of such behaviour being alleged until reading about it in Mr Marshall's affidavit. Messrs Powell and Stephenson did inform Mr Clarke, however, that the police had told them that they had received complaints that persons were urinating on trees in the park across the road. Mr Powell suggested to the police that these persons might have been from another site that was nearby. He told the police that those attending the protest outside the applicant's office would use the public toilets in the park, along with those in "an auction business nearby" which they had permission to use. He assured the police that he would ensure that persons attending the protest did not urinate in the park. Mr Marshall also noticed a CFMEU flag being raised on one of the flagpoles on the project office. According to Mr Marshall, the lock and cover had been removed from the access point for the working mechanism for the flagpole, but Mr Powell told Mr Clarke that there was "never a lock or a cover on the flagpole" on which the CFMEU flag was raised. Mr Marshall said that it was not possible to enter the project office through the front entrance, as there were about 12 people sitting on the steps. According to Mr Clarke, he was instructed by Messrs Mavromatis, Powell and Stephenson that, while there were persons sitting on the steps, they moved aside whenever any person approached to enter, or to leave, the building. They told Mr Clarke that no-one was stopped or hindered from entering or leaving. They did not, however, suggest that Mr Marshall had in fact entered the building through the front entrance on the occasion referred to in his affidavit. As a result of being unable (according to him) to enter the project office through the front entrance, Mr Marshall called the police. He asked the police to request the picketers to move the camper trailer and marquees to the other side of the road, and to hire "a portaloo". According to Mr Marshall, the police spoke to the persons on the protest, and then left. There was no change in the behaviour of those outside the project office. Mr Marshall later saw Mr Powell drive his vehicle onto the footpath, connect the camper trailer, and drive about 40 metres along the footpath before departing. According to Mr Marshall, the withdrawal of Civil Pacific from the project has had the result that little meaningful work is now being undertaken there, and the recommencement of work is an urgent priority. The applicant is considering both the employment of workers directly, and the engagement of a labour hire company. Some interviews with prospective employees and labour hire companies were arranged for 4 March 2009. These were to occur at the project office. Two workers who had applied for direct employment did not attend their interviews at the appointed time. Each was telephoned by a staff member of the applicant. Each spoke to Mr Marshall. The first worker told him that, as he was approaching the project office to attend his interview, he was spoken to by two of the persons gathered outside. They discussed their issues with the worker, and told him (according to Mr Marshall) "not to cross the picket line". The worker told Mr Marshall that he decided not to attend for the interview, as he did not want to be labelled a "scab". The second worker was also approached by two of the persons gathered outside the project office. According to Mr Marshall, they asked him if he was going to attend a job interview, and they communicated to him their concerns in relation to the applicant. They told him that, while they could not tell him what to do, "it would not be a good idea to cross the picket line". For that reason, according to the worker, he did not attend the job interview. Of the three persons who provided Mr Clarke with information, only Mr Stephenson said anything which might bear upon Mr Marshall's evidence regarding the workers who failed to attend for their job interviews. Mr Stephenson spoke to one worker who had attended at the project office for the purposes of a job interview. He told the worker that those on the protest had been sacked, and that there was a dispute about the pay and conditions on the Westgate project. The worker told Mr Stephenson that he had not been informed that there was a dispute on the job when they asked him for an interview, and that he would not go into the project office. Mr Stephenson said that the worker remained at the protest for some time, and shook hands with other persons then present. Mr Stephenson said that this worker was not told by him, or by any other person, that there was a picket line, he was not told not to cross the picket line, and he was not told that it would not be a good idea for him to cross the picket line. On 5 March 2009, Mr Marshall arrived at the project office at about 8.00 am. He saw about 40 persons (whom he described as "picketers") outside the front entrance of the project office. The campervan/barbeque and the two marquees were again set up on the front garden. The CFMEU flag was on the flagpole. Messrs Mavromatis, Powell and Stephenson, and a small number of former Civil Pacific employees, were amongst those present. Mr Marshall saw a number of them urinating in public across the road from the front entrance to the project office. Mr Marshall was told by a member of the applicant's staff that he (the staff member) had been abused by those present, and a security guard told Mr Marshall of an obscenity which had been directed to him by one of those present. In his affidavit, Mr Clarke does not refer to any instructions which would deny the content of these allegations. The security guard told Mr Marshall that those present at the protest had kicked the front door of the project office off its tracks, such that the door would not open. The guard said that he had had to repair the door. Mr Marshall observed where this damage had been done. According to Mr Clarke, Messrs Stephenson and Powell informed him that they did not see any person kicking the door, and that such behaviour would have been "entirely inconsistent with the tone of the protest". Mr Marshall telephoned the police, as he was becoming increasingly concerned about the behaviour of those present outside the project office. When the police arrived, those persons left the front entrance of the project office. However, as soon as the police left, they reoccupied the front entrance steps, so that, according to Mr Marshall, it was not possible to enter. According to Mr Clarke, Mr Powell instructed him that the protesters (as he described them) remained at the front entrance after the police arrived "but moved aside on the steps to allow them to enter and exit the premises". Generally with respect to the behaviour of the respondents and their supporters on 3, 4 and 5 March 2009, Mr Stephenson told Mr Clarke that it was intended that the protest be "highly visible" and that, for that reason, they concentrated themselves at the front entrance to the project office. Mr Stephenson said that the complaint that the protesters were communicating at the project office was "that there was a dispute because John Holland were trying to drive down rates of pay and that this had led to 38 workers being sacked". He said that the protesters did attempt to speak to persons who approached the front entrance, some of whom spoke to the protesters, and others of whom did not. Mr Stephenson said that the protesters did not "obstruct or inhibit" anyone wishing to enter or to leave the office, and did not persist in attempting to speak to persons who did not wish to speak to them. Messrs Stephenson, Mavromatis and Powell informed Mr Clarke that it was possible to enter, and to leave, the project office through the front and rear entrances, and that numerous persons did this on 3, 4 and 5 March 2009. Mr Mavromatis told him that, on those days, trucks and couriers at various times entered and left the premises. What I have described above broadly represents the state of the affidavit evidence filed in relation to the applicant's motion as at 10.00 am on 6 March 2009. I had indicated that I would hear the motion at 10.15 am on 10 March 2009, conditionally upon the applicant having served its affidavit evidence by 10.00 am on 6 March 2009. When the matter came on before me on 10 March, the applicant and the intervener sought, and were granted, leave to read further affidavits containing evidence of the respondents' conduct since 10.00 am on 6 March 2009. I also received a further affidavit from Mr Clarke, in response to that evidence. When Mr Marshall arrived at the project office at about 10.00 am on 6 March 2009, he saw that what he described as a "picket line" was still in place, that there was a camping trailer, and that there were marquees and CFMEU and AMWU flags on display. Those present wore clothing labelled with AMWU and CFMEU insignia. Mr Marshall noticed a number of former Civil Pacific employees amongst those present, as were Messrs Mavromatis and Powell. As he was entering the project office, Mr Marshall was heckled by those present. One former Civil Pacific employee yelled at him while he was trying to make his way through a group of about 10 persons to get to the door of the office. The former Civil Pacific employee said to Mr Marshall: "You think you can get fucking scab labour on this project Gary, you are a fucking idiot. We all know who you are. Where's our job? " Mr Marshall said to this person: "We have offered all of you the opportunity to apply for a position. " The former Civil Pacific employee said: "I wouldn't work for the shit money you're offering. " Mr Marshall then commented that the pay on the project was $5.00 an hour better than any construction job in Victoria, including Eastlink. (He explained in his affidavit that, when under construction, the Eastlink project was commonly regarded throughout the industry as involving very good pay for construction workers. ) The former Civil Pacific employee said: "We will get what we want and there will be no scab labour getting past this picket line. " According to Mr Clarke, Messrs Mavromatis, Powell and Stephenson advised him that nobody in their hearing said words to the effect that there would be no scab labour getting past the picket line. However that may be, Mr Powell was present at the time when Mr Marshall entered the door of the office. Mr Marshall said to Mr Powell: "You'd better control your boys, they're starting to get out of control. " Mr Powell replied: "You getting worried? It's not my problem. " At the time of making that statement, according to Mr Marshall, Mr Powell was laughing. Once inside the office, Mr Marshall viewed the gathering from the inside. He noticed a number of persons present drinking beer. He saw people banging on the windows of the office, yelling, and kicking at the front door. Messrs Mavromatis and Powell advised Mr Clarke that they observed no banging on the windows and no kicking of the front door. Mr Marshall said that he called the police, and that they came and spoke to the persons present outside the project office. Once the police had left, Mr Marshall found no change in the behaviour of those persons. At about 12.15 pm on 6 March 2009, Mr Marshall was required to leave the project office to attend a meeting elsewhere. When he arrived at his car, he noticed it had a flat tyre. Those gathered outside the project office were laughing at him. He repaired the tyre and proceeded to the meeting. On the same day, 6 March 2009, Ms Rachel Hardinge, an investigator in the service of the intervener, returned the telephone call of Mr Lee, the security guard. Mr Lee told her that, when the picketers (as he described the persons outside the project office) were packing up for the day, he saw a man standing at the applicant's flagpole, and thought that this man was about to cut the ropes. Accordingly, he took a photograph of the man and the flagpole. According to what he told Ms Hardinge, at this point Mr Mavromatis yelled out the following words to him: "Smile you cunt your whole fucking family is going to be on this fucking camera ...and I will get every one of you. You think you're funny now you fucking copper wannabe cunt ... you're fucked and you don't know how fucked you are. " The security guard told Ms Hardinge that Mr Mavromatis had said to him several times "You are a fucking cunt" and "You're fucked". According to the affidavit of Mr Clarke, Mr Mavromatis advised him that he denied speaking in the terms alleged by Ms Hardinge. After his meeting, Mr Marshall returned to the project office at about 2.00 pm on 6 March 2009. At that time, according to Mr Marshall, "the picket line and all its remnants were gone". Mr Marshall spoke to Mr Lee, the security guard, who told him that, earlier that day, Mr Mavromatis had abused him by saying things like: "You're gone you cunt, you're fucked, you're gone and your fucking family's gone, I'm gonna get you, you want to be a fucking cop. " As is apparent from the terms of this alleged invective, Mr Lee was probably recounting to Mr Marshall the same incident as he recounted to Ms Hardinge. According to Mr Clarke's affidavit, he was advised by Mr Mavromatis that he did not make any such statement, or a statement to the effect, alleged by Mr Lee. As Mr Marshall and Mr Lee were talking outside the front of the project office, a vehicle with two occupants drew up behind Mr Marshall's car. The driver was waving Mr Marshall over. Mr Marshall went to the car and noticed, through the open passenger window, that Mr Mavromatis was the driver. He had an open can of "Jim Beam" on his lap. Mr Marshall asked Mr Mavromatis: "What are you doing back here? " Mr Mavromatis responded: "I am watching you. " Mr Marshall made a comment to the effect that he (Mavromatis) must be bored. According to Mr Marshall, Mr Mavromatis drove his car off with screeching tyres, yelling obscenities at the security guard to the effect of "you fucking grey haired cunt". According to the affidavit of Mr Clarke, Mr Mavromatis advised him that he (Mavromatis) did not make "the statement" attributed to him by Mr Marshall at the time of this encounter. After Mr Mavromatis had left, and while still in the vicinity of the entrance to the project office, Mr Marshall took a telephone call from Mr Cassells, a General Superintendent in the employ of the applicant. While talking to Mr Cassells, and within minutes of Mr Mavromatis having left, four vehicles pulled up surrounding Mr Marshall's car. Three to five men got out of each vehicle, and they appeared to be drinking from cans of beer. According to Mr Marshall, within seconds he was "surrounded" by 12 to 15 men. The main entrance to the project office was shut at the time, and the doors would not open because, according to Mr Marshall, some of those on the "picket" had removed sensor plates that caused the doors to operate. This meant that Mr Marshall had no way of getting away from the group of men by whom he was surrounded. These men began yelling and chanting. According to Mr Marshall, some of them were "noticeably intoxicated". Mr Marshall terminated his telephone call with Mr Cassells. He then noticed that Mr Mavromatis had parked his vehicle on the other side of the road and was standing beside it with his arms crossed, laughing. The men were chanting and yelling things like "give us our jobs and give us our rights". Some called Mr Marshall "cunt" and "dog". Then the security guard managed to open the doors to the office, and Mr Marshall walked inside. From the inside of the project office, Mr Marshall saw Mr Mavromatis walk across the road with an AMWU flag. Those present began chanting again, and banging on the windows of the project office. Mr Marshall saw some of them crowding around his car, and trying to open the doors. He saw some of them looking into the car and appearing to take a note about things that were inside it. This behaviour continued for about half an hour, after which the police arrived (Mr Marshall having called the police immediately upon his entry into the office). When the police arrived, the group of persons disbanded, and left the vicinity. Until this happened, members of the applicant's staff working at the project office felt too concerned for their safety to leave the office. Save to state that Messrs Mavromatis and Stephenson told him that they observed no person banging on the windows of the project office, Mr Clarke does not refer to any denial by the respondents of the events described in the previous two paragraphs. At about 7.00 am on 10 March 2009, Mr Andrew Williams, an investigator in the service of the intervener (and the applicant in proceeding No. VID 83 of 2009) attended at the project office. He saw about 20 people outside the front of the project office in Williamstown Road. He saw two blue marquees in the garden area between the footpath and the building. He saw two men in the centre median strip waving flags bearing the letters "CFMEU". A little later, he saw a large trailer barbeque bearing the letters "CFMEU", on the front garden between the footpath and the building. At about 7.45 am, Mr Williams saw Mr Mavromatis approach the front door of the project office. From that position, Mr Williams could hear Mr Mavromatis call out "morning Lee" and, after saying something that Mr Williams could not hear, yell out "have a good weekend ... family ... did you take the kids to Moomba? " As this was said, Mr Williams was standing with Mr Lee, the security guard. At various stages between then and 8.48 am, when Mr Williams left the project office, he saw a number of people assembled outside, including Mr Powell and Mr Stephenson. In his affidavit, Mr Clarke does not refer to any denial by Mr Mavromatis of the events described in this paragraph. In his affidavit, Mr Clarke refers to instructions which he has received which deal with, or from which may be inferred, the respondents' purposes in maintaining their presence at the project office, and (subject to their denials, where applicable) in doing the things referred to in the affidavits filed on behalf of the applicant. Generally the AWU agreements have less favourable conditions relating to RDO's and other general conditions. On projects which involve a large component of metal work, including projects such as the construction of Dams, power stations and bridges, it is common in Victoria that Agreements known as "mixed metal agreements" are made. These provide total pay which is approximately ten dollars per hour higher than that on civil construction agreements. All work conducted on the Westgate Bridge, from the 1970 collapse to date, has been performed under the metals award and later under mixed metal agreements. Stephenson and Powell inform me that they were advised by Allan Foster and Dave Cassells in a meeting on 21 January 2009 that the work to be performed on the project was fifty per cent metal work and that eighty boilermakers/welders would be required on the job. Stephenson and Powell inform me that Mr Hamersley confirmed Mr Foster's and Mr Cassell's comments in a later meeting. Further, Mr Clarke deposes that Messrs Stephenson and Mavromatis advised him that neither the AMWU nor the CFMEU "was or are pressing for the employment of any person on the project in circumstances where the conditions applicable to the employment were the AWU Southern Region Agreement conditions". In a further affidavit affirmed on 10 March 2009, Mr Hamersley deals with the consequences, for the applicant, of the respondents' conduct. As mentioned above, the withdrawal of Civil Pacific from the project on 2 March 2009 meant that the applicant no longer had the benefit of the 32 employees of Civil Pacific working on the project after that date. There were, it seems, a further six employees of another labour hire company, Workpac Pty Ltd ("Workpac") also working on the project at that time. On 3 March 2009, the applicant requested Workpac to stand its workers down both because of a concern that continued work by them might lead to the resumption of picketing activities by the respondents and because it was not commercially viable for the project to be operating for the sake of six workers only. As a result of these events, no work was done on the project between 3 and 10 March 2009, save for the removal of red lead paint from the bridge by an external contractor. According to Mr Hamersley, this has meant that the applicant has fallen a further week behind in its schedule to perform works under what he describes as "its contractual arrangements with VicRoads". Mr Hamersley states that it is the applicant's intention to obtain a peak workforce of 270 workers on the project by 1 April 2009. That number of workers is, he says, necessary to complete the project in the allotted time. It is proposed that much of the recruiting of this workforce will take place at the project office. Mr Hamersley said that he was informed by Mr Marshall that the applicant's efforts to recruit workers were being hindered by what was described as "the picket currently taking place at the project head office". The applicant's claim for interim relief is made under s 49(1)(c) and (3)(a), and relies upon causes of action said to arise under ss 43 and 44, of the BCII Act. Under s 43 , the applicant submits that the respondents have organised and taken action (and are threatening to continue to do so) with intent to coerce the applicant to employ the former Civil Pacific employees as building employees. Under s 44 , the applicant submits that the respondents have taken action (and, unless restrained, threaten to continue to take action) with intent to coerce the applicant, or with intent to apply undue pressure to the applicant, to agree to make a building agreement under Part 8 of the WR Act. It is convenient to commence by considering the respondents' purpose --- or their "intent" (in the words of ss 43 and 44) --- and to return later to the matters of coercion and undue pressure. It is strongly arguable that the activities and statements of the persons who have gathered outside the project office reflect the purposes of the respondents. Indeed, the contrary was not suggested by counsel for the respondents. Clearly the protest --- which I shall, favourably to the respondents, call the gathering at the project office for the present --- is a co-ordinated undertaking of the AMWU and the CFMEU. What is the purpose, or what are the purposes, of that undertaking? There is ample evidence that the present unemployed status of the former Civil Pacific employees is a significant grievance felt by those of them who have attended in protest outside the project office. It is, in my view, established at least prima facie that an object of their protest is to secure a return to employment on the project. The respondents are conspicuously associated with that object. It was a significant feature of the respondents' representations to the applicant at the meeting at Abbottsford on 3 March 2009. It is no secret that the applicant is in the course of considering employment applications for the project, in which circumstances I consider it to be strongly arguable that the respondents' purpose involves, although it may not be confined to, the achievement of employment of the former Civil Pacific employees by the applicant itself. It was argued on behalf of the respondents, however, that their desire to have the former Civil Pacific employees re-employed on the project was conditional upon the applicant first making a site agreement with the AMWU and the CFMEU. It was submitted that the evidence does not sustain the conclusion, even arguably, that the former Civil Pacific employees, and the respondents acting in their interests, are seeking immediate re-employment at the project on the rates and conditions which would apply under the Southern Region Agreement. My provisional view, however, is that there is a degree of forensic sophistication in this way of putting things that does not reflect the reality of the situation on the ground, as it were. The fact that a number of the protesters had lost their jobs with Civil Pacific, and the ability of the respondents to implicate the applicant in that event, provide elements of injustice which, evidently, are a significant justification for their protest. Indeed, the colour of the protesters' statements outside the project office was not that the respondents were seeking a new agreement with the applicant which would have brought with it higher rates of pay than those provided in the Southern Region Agreement, but that the applicant, by causing the Civil Pacific workers to be dismissed, was driving rates down. In the respondents' apparent purpose, there is an industrial dispute which requires an industrial solution. I consider it to be strongly arguable that the respondents have, as it were, a composite agenda which involves an insistence upon the applicant providing employment for the former Civil Pacific employees, and doing so by reference to a new site agreement to which the AMWU and the CFMEU would be parties. Indeed, I consider it to be strongly arguable that the respondents presently have no intention of terminating their campaign against the applicant until the former Civil Pacific employees are returned to employment on the project. For the purposes of provisions such as ss 43 and 44 of the BCII Act, it is sufficient if the intent referred to therein is a substantial and operative intent on the part of the persons having it: Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1188 ; (2000) 100 FCR 530 , 541 [45]. In the circumstances of the present case, it has, in my view, been established prima facie that a substantial and operative intent of the respondents is to influence the applicant to employ the former Civil Pacific employees. The other element of the respondents' apparent purpose is to have the applicant enter into a site agreement with the AMWU and the CFMEU to cover work on the project. That at least seems to be common ground. Where the parties part company is on the question whether the respondents intend that such an agreement be made under Part 8 of the WR Act (a requirement of liability under s 44 of the BCII Act). The applicant and the intervener submit that, as registered organisations, the AMWU and the CFMEU would be most unlikely not to want to have their proposed agreement made under Part 8, with the statutory means of enforcement which that (and the other steps for which Part 8 provides) would bring. The respondents rely on the evidence of Mr Clarke that he was instructed by Messrs Stephenson and Mavromatis that the CFMEU and the AMWU (respectively) did not want to have any agreement "registered" under Part 8. They also point to s 348(3) of the WR Act, and submit that any new agreement lodged under Part 8, and applicable at the project, would have no effect until after the nominal expiry date of the Southern Region Agreement. They invite me to infer, therefore, that they would have no reason to make a new agreement under Part 8. The respondents' submission calls for a brief examination of the operation of Part 8 of the WR Act. Division 2 of Part 8 deals with the subject of "types of workplace agreements". The question then arises: what does it mean "to make ... [an] agreement under Part 8"? Unlike previous legislation, the WR Act does not provide for the certification of industrial agreements. The provisions of the WR Act which apply to union collective agreements are complex to a degree, but it is at least arguable that they provide for a staged process involving the making, the approval, the lodging and the commencement of operation of such agreements. Having been made under one of the provisions referred to in Division 2 of Part 8, a workplace agreement is then "approved" if the steps referred to in s 340(1) are carried out. Once having been approved, and once the other pre-lodgement procedures referred to in Div 4 of Part 8 have been completed, the employer may lodge the agreement under Div 5. Subject to various other requirements of Part 8 which do not need to be presently considered, the workplace agreement "comes into operation" on the seventh day after the Workplace Authority Director issues a notice to the effect that the agreement passes the no-disadvantage test under s 346M(1): see s 347(1)(b). It seems that a union and an employer will make an agreement "under" s 328 if they make a conventional, traditional, industrial agreement without any conscious reference to Part 8, or to the WR Act at all. On the facts of the present case, the applicant employs no member of the AMWU or of the CFMEU whose employment would be subject to the agreement which those unions claim to be seeking. However, as I pointed out on a previous occasion, s 44(1) of the BCII Act is concerned not with the making of an agreement as such, but with influencing a person to agree to make an agreement. It is established, at least arguably, that the respondents have in mind, ultimately, achieving an agreement for the project, and having at least one member amongst the applicant's employees on the project. That is to say, the site agreement which they claim to want would seem to fall comfortably within the four corners of s 328 of the WR Act. Pace Messrs Stephenson and Mavromatis, Part 8 of the WR Act does not involve any process of registration. Assuming in favour of the respondents that, in giving their instructions to Mr Clarke, those men intended to refer to the lodgement of an agreement when they mentioned a process of registration, their evidence does not, in my view, go to the extent necessary to expunge what would otherwise be the applicant's arguable case that the respondents' intent is to have the applicant agree to "make" an agreement under Part 8. That is because, as I have explained, it is only the making of an agreement which is picked up by s 44 of the BCII Act, and the scheme of Part 8 of the WR Act is such that the making of an agreement under s 328 is an autonomous, and apparently quite simple, process which, of itself, involves neither registration nor lodgement. I consider, therefore, that the absence of a present intent on the part of the respondents to lodge the agreement which they presumptively hope to make with the applicant under Part 8 of the WR Act is not disqualifying apropos the applicant's prima facie case under s 44 of the BCII Act. Turning next to the matter of coercion, the authorities establish that what is required is an intent to negate choice, and to do so by conduct which is unlawful, illegitimate or unconscionable: see Seven Network (Operations) Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2001] FCA 456 ; (2001) 109 FCR 378 , 388 [41]. Here it is, in my opinion, important to recognise the connection between the "action" and the "intent to coerce" which together provide the axis along which ss 43 and 44 of the BCII Act relevantly operate. That is to say, the action must be taken with the intent referred to. This is important because of the meaning which the word "coerce" carries in context. The putative respondent's intent must be to negate choice on the part of his or her target, and the means employed must be unlawful, illegitimate or unconscionable. The means employed, of course, are one and the same thing as the "action" referred to in the sections. That is to say, the action which is considered to be unlawful, illegitimate or unconscionable must be the same action by reference to which the putative respondent intends to negate the choice of his or her target. This analysis is important, and may ultimately be decisive, in a case such as the present which involves different types of conduct. In this category I would place such activities as urinating on, or conspicuously in the vicinity of, the project office, damaging the applicant's property, banging on windows, abusing the applicant's staff, impeding persons in the act of entering or leaving the project office, and the like. (ii) The display of union flags and paraphernalia and the peaceful presence of a multiplicity of persons who, by their numbers and demeanour, are not intimidating. Considered in isolation, I would not regard these kinds of activities as illegitimate, even arguably. Neither do I consider that there is any sense in which the applicant's choice is negated by them. (iii) Interference with the applicant's process of hiring staff for employment on the project. I shall return to the question of whether such conduct arguably amounts to coercion presently. Whether conduct in the first category is not only illegitimate but also negates the applicant's choice is a difficult question. On one view, the choice of a substantial corporation should not be considered to be negated merely by having to endure distracting and at times distressful conduct of the kind to which I have referred. It might also be said that, to the extent that the applicant's property was damaged by those attending outside the project office (a circumstance which itself is put strongly in contest by the respondents), the damage should be regarded as minor in the scale of things involved in the project, and as insufficient to negate the applicant's choice. On another view, however, there must be a real question whether, if confronted with the reality that conduct of this kind would go on indefinitely, the applicant would not reasonably take the view that the normal work of its staff at the project office would be so affected thereby as to give it no choice, in a practical sense, but to yield to the respondents' demands. It might also be said that the impact of the protesters' activities outside the project office may not be confined to the applicant's balance sheet, as it were: the applicant's responsibility to its own employees (which is defined by reference to their "working environment": see Occupational Health and Safety Act 2004 ( Vic), s 21) should not be overlooked in the mix of factors that might, ultimately, if not immediately, move the applicant to act as it would never have acted if given a free choice in the matter. These are difficult questions which will need to be resolved at trial. I express no concluded view about them. However, I think that the applicant has a prima facie case that conduct in the first category is such as would have the practical effect of negating choice, the apparent strength of which justifies a consideration of where the balance of convenience lies, and of other discretionary questions. I turn next to the conduct in the third category. This was the aspect of the evidence upon which the applicant most strongly relied on the matter of the balance of convenience, something to which I shall later turn. It was also, however, part of the applicant's case on the merits that the pressure created by the respondents' interference in the hiring process, and the consequential delays to which, it is alleged, that would lead in the resumption of productive work on the project itself, were sufficient to involve a negation of choice in the relevant sense. I accept that it is arguable that an interference of this kind, and with those likely results, would, in a practical sense, negate the applicant's choice. In a project of this size, interfering with the employment of staff such as is necessary to permit the resumption of productive work would, at least arguably, place the applicant in an intolerable, and unsustainable, position. I would have little hesitation in holding it to be arguably established on the evidence that the negation of the applicant's choice is at least a substantial and operative factor in the intent behind the respondents' conduct. However, are the means by which the respondents seek to interfere in the recruitment of staff unlawful, illegitimate or unconscionable? The only evidence of those means is that which relates to the two job applicants who arrived at the project office on 4 March 2009 for the purposes of being interviewed on their applications. Even on the applicant's evidence, the argument that the respondents' methods were illegitimate or unconscionable is a weak one, and no submission has been made that those methods were unlawful. On the applicant's evidence, the position seems to be, broadly, that the job applicants were informed about the respondents' dispute with the applicant and asked not to cross, or told that it would not be a good idea to cross, the "picket line". The respondents resisted the suggestion that they, or their supporters, referred to the gathering outside the project office as a "picket line". However, neither Mr Mavromatis nor Mr Powell gave evidence (either directly or through Mr Clarke) on the subject. Despite the denials of Mr Stephenson, I am disposed to think that the statements made by the job applicants themselves, related to the court through the affidavit of Mr Marshall, provide a sufficient foundation for a provisional finding that they were indeed advised not to cross, or that it would not be a good idea to cross, the picket line. Even so, is it arguable that, at trial, the court would regard it as illegitimate for the respondents to have spoken to the job applicants in these terms? Here it must be remembered that the job applicants were not persons with established business or employment relationships with the applicant. They were persons proposing to attend interviews, after which it would, I presume, be a matter of their own choices, and of the choice of the applicant, whether new employment relationships would be created. Further, these persons were not independent trading enterprises with the operations of which the respondents could claim no legitimate connection. They were intending workers on a construction job and were, therefore, within the cohort of persons with whom the respondents had a conventional and, I consider, legitimate concern. In a nutshell, unless otherwise unlawful in some way, I do not consider that it should be regarded as industrially illegitimate for a trade union, in dispute with an employer, to draw to the attention of an intending worker the nature of that dispute, and to ask the worker to take the union's side, as it were, rather than accepting employment under terms and conditions which the union has placed in dispute. Describing their presence as a "picket line", and asking the job applicants not to cross the notional line, was, I consider, compendious and well-understood terminology which would not, without more, involve illegitimacy. For the above reasons, while I accept it to have been arguably established that, by interrupting the applicant's recruitment process for the project, the respondents intend that the applicant's choice should be negated, I consider that, if the proposition that relevant aspects of the respondents' conduct were unlawful, illegitimate or unconscionable is arguable, it is barely so. I would summarise my conclusions on the matter of coercion as follows. The respondents' conduct in the first category is arguably such as would negate choice and is (more clearly) arguably illegitimate. Accordingly, I consider that that conduct arguably bespeaks an intent to coerce the applicant. The argument that the respondents' conduct in the second category is such as would negate choice is a very weak one, as is the argument that such conduct is illegitimate. I do not consider that either argument is sufficiently viable to sustain interim restraints of the kind sought by the applicant. The respondents' conduct in the third category is, in my view, arguably such as would negate choice; but I am less impressed with the argument that that conduct is illegitimate. I would not say that the point is too weak to be responsibly argued but, if the evidence at trial remains as it is, I can foresee considerable problems for the applicant on the matter of illegitimacy. I turn next to the notion of "undue pressure" employed in s 44 of the BCII Act. These words did not appear in s 170NC of the WR Act, which was the corresponding provision, applicable to industry generally, at the time when the BCII Act was enacted in 2005 (see now s 400 of the WR Act). Counsel were unable to assist me as to why these words were introduced. The Explanatory Memorandum to the BCII Act makes it clear that many of its provisions were introduced in consequence of the Report of the Royal Commission into the Building and Construction Industry , but that document appears to contain no recommendation which would have involved an extension of the concept of coercion as used in what was then s 170NC of the WR Act. The Explanatory Memorandum does not deal with "undue pressure" at all (other than, as frequently occurs, to explain the new provision in a grammatical paraphrase of the words of the section). The words have not, it seems, been the subject of judicial exposition. In these circumstances, it appears that the court is thrown back on first principles in its task of giving a connotation to these words. In the context in which it is used, the expression "undue pressure" could not, in my opinion, be limited to circumstances of the kind comprehended by the equitable doctrine of undue influence. If they were so limited, while there might, conceivably, be industrial situations in the building and construction industry to which they would be relevant, those situations would, in my estimation, be few and far between. I consider that the expression was intended to have a connotation that was relevant in the conduct of industrial relations in the building and construction industry over a much broader front than would be implied by the equitable doctrine. Looking then at the normal meaning of the words used in the expression, there is no particular difficulty with the word "pressure". It is the word "undue" which is problematic. The dictionaries tell us that "undue" may carry a quantitative connotation --- in the sense of going beyond what is warranted, or excessive --- or a qualitative connotation --- in the sense of being discordant with some rule or norm, unjust or, in a softer sense, inappropriate or unsuitable. I think it unlikely, given the industrial relations context, that a quantitative connotation was intended in s 44 of the BCII Act. It would, in my view, be almost impossible for a court to say that a given degree of pressure applied to induce a person to make an agreement (for example) was simply too much. Rather, I think it likely that the legislature intended that a qualitative standard of some kind was connoted by the expression. What is clear, as a matter of construction, is that the application of undue pressure was regarded by the legislature as something different from coercion. Assuming, as I do, that the legislature intended the reach of s 44 to travel beyond the reach of the then existing s 170NC of the WR Act, it is at least respectably arguable that the legislature intended the expression to connote forms of pressure that were reprehensible, blameworthy or inappropriate in ways that could not be described as unlawful, illegitimate or unconscionable. In this respect, I do, of course, assume that, in 2005 when the BCII Act was enacted, the legislature was aware of the connotation which had been given to the word "coerce" in s 170NC in Seven Network (decided in 2001) and the earlier authorities referred to therein. A very cursory survey of the recent use of the expression "undue pressure" in the industrial relations context reveals that it has been used to describe the kind of situation that might be regarded as a constructive dismissal (see Allison v Bega Valley Council (1995) 63 IR 68 , 73) and the situation which may arise when an employee does not make a free decision to agree to a change of shift, for example (see Victorian Hospitals Industrial Association v Australian Nursing Federation [2002] AIRC 1124 [14]). Cases of this kind throw little light on the meaning of the expression used in s 44 of the BCII Act. They do, however, demonstrate that, in context, the expression "undue pressure" has at least the potential to cover forms of pressure which are somewhat more benign than those considered necessary to make good an allegation of coercion in the statutory sense. Treating the expression "undue pressure" as of wider connotation than that of coercion, I would nonetheless adhere to the conclusion reached earlier with respect to the second category of the respondents' conduct outside the project office. That is to say, I do not think the argument that conduct in that category constitutes the application of undue pressure to be sufficiently viable to sustain the imposition of the interlocutory restraints which the applicant seeks. That leaves the matter of the third category of the respondents' conduct. The question here is whether a direction or request by the respondents, given to a person approaching the project office for the purpose of applying for, or taking up, employment, to the effect that he or she should not cross the picket line, or similar, constitutes the application of undue pressure on the applicant. It is not to the point that no such pressure is placed upon the intending employee. Assuming it to be arguable that the respondents act in the confidence that most intending employees will respect, and therefore refuse to cross, a union picket line, the question is whether the use by the respondents of this kind of influence to cut off the supply of future employees who are known, or reasonably supposed, by them to be intended for work on the project should be regarded as the application of undue pressure on the applicant. This is clearly an important and difficult question in the present proceeding. On one view, it might be said that considerations of the kind to which I have referred in par 53 above could not be regarded as consistent with a conclusion that such pressure was "undue". On another view, however, the standard of delinquency, as it were, involved in undue pressure, is arguably (and, in my opinion, most probably), somewhat less than that involved in the concept of coercion. For reasons which I have attempted to explain above, I consider that the applicant has a good prospect of persuading the court at trial that illegitimacy is not required to make good an allegation of undue pressure. There is, therefore, a reasonably arguable prospect that the applicant would succeed in persuading the court that, however legitimate the conduct of a peaceful picket line might be as a matter of industrial relations, the use of such a means to stifle the flow of employment to a major construction project, with the delays and significant costs which would self-evidently result from that stratagem, should be regarded as the application of undue pressure. In summary, I consider that the applicant has established a prima facie case in the relevant sense that, by engaging in conduct in the first category, the respondents have taken action, and are continuing to take action, with intent to coerce the applicant to employ the former Civil Pacific workers as building employees, contrary to s 43 of the BCII Act, and also to agree to make a building agreement under Part 8 of the WR Act, contrary to s 44 of the BCII Act. I consider the applicant has also established a prima facie case that, by engaging in conduct in the third category, the respondents have taken action, and are continuing to take action, with intent to apply undue pressure to the applicant to agree to make a building agreement under Part 8 of the WR Act. It remains to consider whether the balance of convenience, and other discretionary considerations, favour the grant of interim restraints in relation to conduct in those categories. Commencing with conduct in the first category, the applicant's interest in not having to endure it during the period it takes to bring this case to trial is obvious. There is, in my view, a very real risk that, if such conduct were not restrained, the applicant might have no alternative but to resolve the issues which it has with the respondents in ways which do not recognise the operation of, and the policy behind, ss 43 and 44 of the BCII Act, thereby effectively frustrating the exercise of the court's jurisdiction in this proceeding. Or, to put it differently, by their continued and unrestrained engagement in conduct which I have held to be arguably in contravention of those sections, the respondents would have succeeded in achieving their ends by means which the WR Act prohibits. It is not, in my view, in the interests of justice that such a regime should prevail during the interlocutory period. Save for relying on the broad common law right to communicate, the respondents did not claim that they would be disadvantaged by an interim restraint on conduct in this first category. In my view, it is quite unnecessary for the respondents to resort to conduct of this kind as a means of communicating with the applicant, its staff or job applicants, or the public generally. The balance of convenience does, therefore, favour the grant of an injunction against the continuation of this conduct. Turning to conduct in the third category, here I have held that the applicant has a prima facie case under s 44, but not under s 43, of the BCII Act. If no interim injunction is granted, but the applicant ultimately succeeds at trial, the detriment which it will have by then suffered will depend upon its reaction to the respondents' conduct. If it holds the line, as it were, and refuses to agree to make an agreement, the likelihood is that no further work will have been done on the project, due to lack of staff. In a project of this size, it is self-evident that the losses to the applicant (or, to the extent that the applicant might achieve some adjustment in the contract price, or another contract condition, by negotiation with its client, to the Victorian community) will have been very substantial. It was not suggested by the respondents that the applicant could realistically look to them to make good its damages in such circumstances. Alternatively, if the applicant yields to the respondents' pressure and makes the agreement they seek, the achievement of the very policy which underlies s 44 will have been frustrated: that is to say, a party will have been able to achieve an agreement under Part 8 of the WR Act by the application of undue pressure. And the making of such an agreement is likely to bring into existence a new range of legal rights and obligations, and of industrial relations realities, which will prove difficult to undo. Either way, I consider that the applicant has done enough to justify the conclusion that the damage it will suffer is likely to be irreparable. The alternative situation which requires consideration is that in which an interim injunction as sought is granted, but the respondents ultimately succeed at trial. Here, the only detriment upon which counsel for the respondents relied was the denial of the respondents' rights to communicate. I accept that the right of a trade union to communicate, peacefully and without intimidation, with workers who fall within its area of interest should be accorded considerable respect, particularly under an Act which is concerned with industrial relations. However, because of the applicant's case under s 44 of the BCII Act, to assert that there is a right to communicate in the terms arguably being used by the respondents is to beg the question. I am here concerned not to resolve the ultimate rights and wrongs of the respondents' conduct in relevant respects, but to arrive at a practical, just and workable regime of obligations that will govern the parties' conduct while this proceeding is being dealt with by the court. It was not submitted that either the respondents or any workers whose interests it was their concern to protect would suffer any material detriment as a result of the short term restraints which the applicant proposes. In particular, no submission was made that either the respondents or those workers would be disadvantaged in any practical sense by the respondents' inability to continue to place pressure upon the applicant for the making of an industrial agreement. The respondents' case was not run, for instance, by reference to the need of the former Civil Pacific employees to regain remunerative employment. For the above reasons, I consider that the balance of convenience favours the applicant's case, and I propose to grant its motion to the extent of restraining the respondents, pending the hearing and determination of this proceeding or further order, from engaging in the first and third categories of conduct identified in these reasons. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | union protest outside head office for major construction project intent of protestors to influence contractor to make industrial agreement with unions not presently having members working on the project whether intent was for agreement to be made under workplace relations act 1996 (cth) whether intent of protestors also to secure employment of workers previously laid off by subcontractor whether intent to secure that employment in absence of claimed industrial agreement. union protest outside head office for major construction project methods used by protestors whether illegitimate whether negated choice of contractor whether amounted to coercion or application of undue pressure. words and phrases "undue pressure". industrial law industrial law statutes |
To avoid any confusion between the Applicant for the documents and the Applicant for relief in these proceedings, I will describe the Applicant in the proceedings as Comcare. I will describe the Respondent in the proceedings as Ms Foster. 3 Comcare is a body established by sections 68 and 74 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the SRC Act ") and has the functions and powers conferred by sections 69 and 70 among other functions conferred by the Act. 4 Ms Foster made claims upon Comcare for compensation in relation to incapacity and also permanent impairment on 31 March 1999 (Q1999/369) and 13 December 2002 (Q2002/1094) among other claims including an application in November 1994 (Q1994/731) all pursuant to the SRC Act . I would have files in the department with your litigation area, AAT files, section 37 'T' documents, medical files, compensation files, claims for costs (files? ) etc. I would like a copy of everything thank you. I last made a FOI/Section 59 request in 1995 so documents made prior to 27/5/1995, unless they were not previously supplied, are not needed. I do not know whether I was to lodge my request under FOI or Section 59 as I do not know about section 59 but can you please accept whichever will provide me with full access in the most timely manner. Can you please also ensure that Kristina King's notes (handwritten by Kristina) of the Conciliation meeting at the AAT in June 2002 and Comcare notes of the Directions Hearing at the AAT at the end of 1998 or 1999 are included. On 23 March 2003, the Respondent made a further request for access to "all my files under the FOI Act ... from the start of my claim" . That request made reference to another claim or reference number described as "claim 26745/03". On 8 May 2003, Comcare made a decision to release certain documents and withhold "legal advice, internal working documents in relation to legal advice and investigation documents" on the ground that those documents were exempt from disclosure by operation of section 42(1) of the FOI Act because the documents are of such a nature that they would be privileged from production in legal proceedings on the ground of legal professional privilege. Upon review, Comcare concluded the documents were privileged from production on the ground of legal professional privilege. In some cases, this also included the purpose of preparing for or conducting litigation to which Comcare was a party or litigation being considered by Comcare. Comcare has not waived that legal professional privilege. However, those documents were documents within the category of group of documents Comcare decided were exempt under section 42(1) of the FOI Act and therefore "no purpose would be served in further identifying these documents" . 13 On 25 August 2003, Ms Foster applied to the Tribunal for a review of Comcare's decision arising out of the internal review. Subsequent to Ms Foster filing her application with the Tribunal, Comcare elected to release further documents to Ms Foster. The documents to which Comcare continues to refuse access are set out in Annexure "KAK1" to the affidavit of Kristina Anne King affirmed on 13 February 2004 and marked Exhibit 1 in the Tribunal review. Kristina King is a public servant employed as an instructing officer in the "Appeals and Review Team" within Comcare. Annexure "KAK1" to Exhibit 1 refers to various documents, among others, generally described as "investigation file" and referenced as E123 and "copies of surveillance videos" referenced E124 and dated 20 July 2000 to 18 August 2000. These documents (and particularly E124) are more particularly described in the affidavit of Gary King sworn 13 February 2004 and marked Exhibit 2 in the Tribunal review. However, a confidentiality order applies to those documents. Nevertheless, they are the same documents referred to generally in Annexure "KAK1" to the affidavit of Kristina King. I am employed as an instructing officer in the Appeals and Review Team within Comcare. My role in that position includes management of Comcare's responses to applications to the Administrative Appeals Tribunal for review of decisions made under the Safety, Rehabilitation and Compensation Act 1988 ("the SRC Act "). Since 1999 I have had responsibility for the management of Comcare's response to 2 applications by the Applicant in this matter to the Administrative Appeals Tribunal for review of decisions made by Comcare in relation to claims by the Applicant for compensation under the SRC Act those applications being Application Q1999/369 lodged 31 March 1999 and Application Q2002/1094 lodged 13 December 2002. I am also aware that the Applicant had, prior to my involvement, lodged an earlier application, Q94/731 lodged in November 1994. Comcare engaged Messrs Phillips Fox, lawyers, to provide legal advice to Comcare in relation to claims by the Applicant under the SRC Act and to provide legal services to Comcare in relation to the proceedings Q1999/369 and Q2002/1094 brought in the AAT by the Applicant as listed above. Annexed hereto and marked KAK-1 is a list of documents in respect of which Comcare claims exemption from disclosure under the Freedom of Information Acct 1982. Each of the documents listed but not struck through was created either for the dominant purpose of Messrs Phillips Fox giving or Comcare obtaining legal advice in respect of the Applicant's claims for compensation under the SRC Act or her applications to the AAT for review of decisions on such claims or for the dominant purpose of use in existing or anticipated proceedings in the AAT. It is the usual practice when Comcare requests or receives legal advice from external legal service providers that the matter is referred to an appropriate lawyer within that provider firm to prepare and provide the advice. One of the reasons that Comcare seeks legal advice from external legal service providers is to gain independent advice with respect to a particular matter. When legal advice is received from external legal service providers, it is kept separately from the claim file in a white folder specifically utilised for holding documents passing between Comcare and its external service providers. That folder is retained within the AAT Unit of Comcare. The same measures are taken when Comcare creates or obtains documents for use in existing or anticipated proceedings in the AAT. Where other litigation proceedings are initiated, similar measures are taken, except that the white AAT folder may be retained in the Legal Services Unit of Comcare. The same principle applies to the specifically listed documents in Annexure "GTK1" of Exhibit 2. Before the Tribunal, Comcare abandoned the exemption based upon section 45 and conceded that the section 36 ground of exemption added nothing because its operation in the circumstances, turned upon whether the documents were exempt by operation of section 42(1) of the FOI Act . In other words, it would be contrary to public interest to disclose documents falling within section 36(1)(a) if any such documents are of such a nature that they would be privileged from production in legal proceedings on the ground of legal professional privilege. To the extent that any document within Annexure "KAK1" of Exhibit 1 withheld in reliance upon section 42(1) of the FOI Act also comprehended documents falling within section 59 of the SRC Act (and not disclosed), Comcare relied upon the privilege from production on the ground of legal professional privilege. It seems to be common ground between the parties that neither section 59 of the SRC Act nor the SRC Act otherwise expressly or by necessary implication abrogates the privilege from production of documents on the ground of legal professional privilege. In Baker v Campbell (1983) 49 ALR 385 a majority of the High Court held that the doctrine of legal professional privilege applied not only to judicial and quasi-judicial proceedings but also to situations where there are no anticipated judicial or quasi-judicial proceedings. It is obvious, to my mind, that any person seeking advice such as must have been sought in this case would be seriously hampered in giving full instructions, as would his legal adviser be in giving advice, by the prospect that the instructions or the advice might have to be disclosed under compulsion and so become available for use, in one way or another, to his disadvantage. Clearly, those instructions and the consequent advice would be likely to be relevant in establishing at least the fact of agreement, which is a necessary part of any conspiracy, and the nature of the agreement. And yet, it is just such relevant evidence that the law excludes in judicial proceedings because of its overriding regard for the confidentiality of communications between a legal adviser and his client and it does so at the expense of the availability of the whole of the relevant evidence. It is hardly to be supposed that the principle which lies behind that exclusion is so narrow in its application as to be confined to judicial or quasi-judicial proceedings with the result that it may be thwarted by executive or administrative processes. The decision of the High Court in Waterford v Commonwealth of Australia (1987) 71 ALR 673 put beyond doubt that documents brought into existence for the sole purpose of obtaining and giving and receiving legal advice in relation to proceedings in this Tribunal would sustain a claim for legal professional privilege. There the Court referred to the sole purpose test (as explained in Grant v Downs (1976) 11 ALR 577). That must now be considered in light of the Court's decision in Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67 ; (1999) 201 CLR 49. There the Court overruled Grant v Downs , holding that the test for whether legal professional privilege exists is whether the dominant purpose for which the document came into existence was the purpose of obtaining legal advice and communication of legal advice or information which may be used in existing or possible legal proceedings. Of course it is the client's privilege and may be waived by the client. In this case the respondent has done so in relation to some documents for which exemption is not claimed. Further, the circumstances that the document is a 'routine document' will not be definitive. The dominant purpose of its production may none the less qualify it for professional privilege. Whether or not a document does so qualify is a question ultimately to be decided, if need be, upon an inspection by the judge of the document itself, and by the application of the stated principle. An example of a routine document that was held to not be privileged is the solicitor's trust account ledger considered by Connolly J in Re Packer and Others v Deputy Commissioner of Taxation (1983) 53 ALR 589. There his Honour followed the majority in Grant v Downs but the judgment remains instructive. I have reviewed all the documents referred to in the schedule to Exhibit 1 in respect of which exemption is claimed under section 42 of the FOI Act . I am not satisfied that any of the abovementioned documents were prepared for the dominant purpose of providing legal advice, nor, if it is relevant, for the dominant purpose of the respondent being provided with professional legal services relating to proceedings in this Tribunal. Most of the documents are purely procedural and only refer to information on the public record. The applicant also made submissions about copies of a surveillance video (E124). I have not seen the document but if it is a typical surveillance video (and I infer it is) then it will be a purely factual record upon which an administrative decision may or may not be based. It is not in any sense part of the 'thinking' process of the agency --- it is part of the factual base on which the thinking process may or may not rely. I accept that there are decisions pointing both ways in relation to surveillance videos but I am persuaded that where the video relates to a claim for compensation and to the extent that the video contains personal information about the applicant, it is not an exempt document under either section 36 or section 42 of the FOI Act . Nor does the video itself come within the terms of section 37 of the Act because the video itself does not disclose its sources or prejudice the conduct of any investigation. Whether any (and, if so, which) of the circumstances set out in paragraphs (a), (b) and (c) below render legal professional privilege inapplicable to a document or any (and, if so, which) part of that document, when the document is created for the dominant purpose of aiding a party in actual or anticipated legal proceedings in a court or administrative tribunal? Whether the Administrative Appeals Tribunal, in considering whether legal professional privilege applied to each of the documents referred to in paragraphs (a) and (b) below, applied a correct legal test for determining whether legal professional privilege applied to that document? The Tribunal applied an incorrect test in determining whether legal professional privilege applied to each of the documents listed in paragraph 25 of the Tribunal's reasons for decision. On all of the evidence available to the Tribunal in relation to each of the documents listed in paragraph 25 of the Tribunal's reasons for decision, it was not reasonably open to the Tribunal to conclude that legal professional privilege did not apply to that document. The Tribunal applied an incorrect test in determining whether legal professional privilege applied to the surveillance video referred to in paragraphs 38 and 39 of the Tribunal's reasons for decision. On all of the evidence available to the Tribunal in relation to the surveillance video referred to in paragraphs 38 and 39 of the Tribunal's reasons for decision, it was not reasonably open to the Tribunal to conclude that legal professional privilege did not apply to that document. A court has power to examine documents in cases where there is a disputed claim and it should not be hesitant to exercise such a power. I use the word purpose here in the sense of intention --- the intended use. The question is one of fact. In some cases, a mere general description of documents in an affidavit of discovery may indicate an affirmative answer without any need further to examine the documents or the circumstances in which they came into existence. In other cases, both an examination of the documents and the surrounding circumstances may be necessary. Primarily, Ms Foster's questions were directed to the nature of the documents making up Annexure "KAK1". The Tribunal member examined each of the documents identified in Annexure "KAK1" and made a finding of fact that the documents described at paragraph 25 of the Reasons were not prepared for the dominant purpose of Comcare acquiring and Comcare's external independent lawyers, Phillips Fox, providing legal advice nor for the dominant purpose of Comcare being provided with legal services in relation to the proceedings before the Tribunal. Those conclusions are determinations on questions of fact. 24 The first question is whether in determining that question, the Tribunal applied an incorrect legal test. 25 The Applicant's central argument is simply this. A proper reading of the Reasons of the Tribunal and particularly paragraph 26 of the Reasons suggest that the Tribunal member reached the finding that the documents described at paragraph 25 were not prepared for the dominant purpose of Comcare acquiring and Phillips Fox providing legal advice nor the provision and acquisition of legal services in connection with the proceedings for the reason that "most of the documents are purely procedural and only refer to information on the public record " . The contention is that the final sentence of paragraph 26 is not simply an observational statement but rather an explanation of the deliberative process applied to each of the documents described in paragraph 25 of the Reasons to determine the question of whether the claim for legal professional privilege was made out. The Reasons of the Tribunal member do not address, in terms, the evidence of Ms King in detail and particularly the formulation adopted at paragraph 4 of the affidavit. In rejecting that evidence, the final sentence of paragraph 26 seems, fairly read, to suggest that the question of whether the documents referred to information on the public record and whether the documents reflected material which was purely procedural was determinative of whether the documents were brought into existence for the relevant dominant purpose. 27 If so, the test applied by the Tribunal member miscarried. 28 As to the question of information on the public record an example might be this. Suppose a senior officer of a corporation such as a chief executive officer or chief financial officer approaches a solicitor or counsel or both for the purpose of determining whether the corporation might encounter legal obstacles in effecting a merger with another corporation or an acquisition of the shares or assets of another corporation. A question would arise as to whether such conduct might involve, for example, a contravention of section 50 of the Trade Practices Act 1974 (Cth) on the basis that the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market and if so, what remedial consequences might arise at the suit of the regulator or an affected party. A lawyer asked to advise on that question, having obtained particular material and oral and written instructions from the corporation's officers, might access the website for each corporation involved and access and print documents from that site dealing with the detailed scope of operations, concentration ratios, market share, asset details, quarterly briefings, description of market influences etc, access the website for the Australian Competition and Consumer Commission (ACCC) and print a copy of the current merger guidelines, recently posted reasons for informal merger approvals, determinations and other material, access the Australian Stock Exchange website and obtain copies of disclosure statements and releases published to the Exchange, obtain copies of annual reports of each corporation and other briefing statements to funds managers and other publicly available documents. 29 All of that material, gathered together by the lawyers for the dominant purpose of providing legal advice to the corporate client, attracts privilege from disclosure on the ground of legal professional privilege notwithstanding that the material gathered for the purpose of critical assessment in forming views about components of the legal questions, is drawn from information on the public record. The client enjoys an immunity from disclosure of the printed versions of electronic material or copies of documents gathered from public databases and registers because disclosure of those documents would reveal confidential communications between the lawyer and the client concerning the seeking and giving of legal advice on the various issues comprehended by the legal questions. 30 As to the question of whether the documents, upon examination, reflect purely procedural matters, an assessment of the content of those documents is relevant to the question of whether the document was brought into existence for the asserted dominant purpose when testing the affidavit affirming the facts providing the foundation for the claim. However, the content of the document is not determinative of the factual question. As Barwick CJ observed in Grant v Downs (1976) 11 ALR 577 at 579-580: "The circumstance that the document is a 'routine document' will not be definitive. The dominant purpose of its production may nonetheless qualify it for professional privilege. Whether or not a document does so qualify is a question ultimately to be decided, if need be, upon an inspection by the judge of the document itself and by the application of the stated principle ". Although views might differ ( Commissioner of Australian Federal Police v Propend Finance Pty Limited & Ors (1996 --- 1997) [1997] HCA 3 ; 188 CLR 501 ( "Propend Finance" ) per Gummow J at page 564) as to whether the privilege is to be characterised as a practical guarantee of fundamental, constitutional or human rights ( Attorney-General (NT) v Maurice [1986] HCA 80 ; (1986) 161 CLR 475 at 490), a substantive rule of law ( Carter v Northmore Hale Davy & Leake [1995] HCA 33 ; (1995) 183 CLR 121 at 161) or a traditional common law right which is not to be abolished or cut down otherwise than by clear statutory provision ( Bropho v Western Australia [1990] HCA 24 ; (1990) 171 CLR 1 at 17-18), it is now clear that legal professional privilege is a rule of substantive law available to a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings: The Daniels Corporation International Pty Ltd & Anor v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 (" Daniels Corporation" ) at page 552 [9] per Gleeson CJ, Gaudron, Gummow and Hayne JJ. 32 Legal professional privilege is not merely a rule of evidence but an important common law immunity not confined to the processes of discovery and inspection or the giving of evidence in judicial proceedings: Daniels Corporation at 552 and 553 [10] and [11]; Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67 ; (1999) 201 CLR 49 ( "Esso Australia" ), Gleeson CJ, Gaudron and Gummow JJ at 73 [61]. 33 The test is "anchored to the purpose for which the document was brought into existence"; Propend Finance per Brennan CJ at page 508 and the privilege "protects the confidentiality of documents produced for the purpose of communication between a potential litigant and the legal adviser and confidentiality facilitates the administration of justice" : Propend Finance per Brennan CJ at page 508. Although the reasoning in a number of authorities proceeds on a false premise that what is involved is privilege for particular documents rather than communications, ( Propend Finance , per Gummow J at page 569), " communications with one's legal adviser for the [dominant] purpose are privileged from disclosure and this privilege extends to the various components of a communication" : Propend Finance , per Gummow J at page 571. 34 The determination of whether the privilege or immunity is properly established is "not a question of extracting one or other of what may be numerous documents all of which form part of the privileged communication ... . The communication as a whole is protected to foster the confidential relationship in which legal advice is given and received and thereby to advance the respect for an observance of the law" : Propend Finance , per Gummow J at page 571. 35 Where the communication is constituted by or recorded in a document, the document is merely evidence of the communication. When privilege is claimed for a document, it is because it records or constitutes a communication prepared, given or received for the purpose of obtaining legal advice or assistance: Esso Australia , per McHugh J, at page 79 [80]. Further, "it is the purpose of the communication that is decisive, not the purpose in making the document... . [The] document evidences a privileged communication : Esso Australia per McHugh J at page 80 [81]. 36 In the joint judgment of Stephen, Mason and Murphy JJ in Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674 at 687-688, the adoption of a sole purpose test was in part influenced by a concern that where a multiplicity of purposes existed for the preparation of documents, many routine documents passing between management officers within an agency or corporation would also be provided to internal lawyers for a purpose of obtaining legal advice and that many such routine documents would become privileged "merely because one of their intended destinations was the desk of a lawyer" : Esso Australia at page 67 [43] per Gleeson CJ, Gaudron and Gummow JJ. In the course of confidential communications between a client and his or her lawyer a number of documents may be generated which objectively might be characterised as routine either in the course of giving or obtaining legal advice or the supply and acquisition of legal services including representation and legal proceedings. The question is whether the communications of which the documents are a component, were made for the dominant purpose asserted. 37 Although legal professional privilege has been described as " an ancient doctrine which has assumed a life of its own " ( Attorney-General (NT) v Maurice (supra) per Mason J and Brennan J at page 487), the privilege is based upon encouraging full and frank confidential disclosures between a solicitor and client in order to enhance and assist the administration of justice and therefore the determination of rights and interests according to law. The antiquity of the importance of the relationship between the legal adviser and client in the administration of justice and the preservation of rights and interests according to law was recognised in Shakespeare's dialogue between the conspirators, Cade and Dick in Henry VI, Part 2 when Dick in response to Cade's description of the tyrannical and discretionary character of life and rights in England under Cade's proposed rule, responded, "The first thing we do, let's kill all the lawyers' . 38 In the present case, the evidence before the Tribunal was that the documents identified at paragraph 25 of the Reasons of the Tribunal were created for the dominant purpose of Comcare's independent lawyers giving and Comcare obtaining legal advice in respect of the claims by Ms Foster for compensation or her applications to the AAT for review of those claims. Alternatively, the dominant purpose involved use of the documents in the existing proceedings or proceedings then anticipated by Comcare. The evidence was that Comcare had retained independent legal advisers, the point of intersection between Comcare and the independent advisers was Ms King or other officers within the "Appeals and Review Team", that Ms King had administrative responsibility for managing the claims by Ms Foster and Comcare's response to those claims, that Comcare was seeking advice, independent of Comcare, on Ms Foster's claims and Tribunal proceedings and that advice from the independent lawyers is kept physically separate from other material such as administrative material passing between internal officers within Comcare. 39 The question to be determined is not whether the material is routine and thus the evidence of dominant purpose to be rejected but whether, although routine, the material was brought into existence as part of, or evidence of, or components of, confidential communications between Comcare and its lawyers for the dominant purpose of Phillips Fox giving and Comcare obtaining legal advice or the provision and acquisition of legal services including representation in the proceedings. If so, the sequence of letters reflected in Annexure "KAK1" to Exhibit 1 are all privileged. 40 Accordingly, the decision of the Tribunal in relation to the assessment of whether those documents identified in Annexure "KAK1" to Exhibit 1 evidence such a communication should be set aside and the matter referred to the Tribunal for consideration of whether the letters identified at Annexure "KAK1" of Exhibit 1, although reflecting routine or purely procedural matter or information on the public record, are components of a confidential communication between Comcare and its independent lawyers for the dominant purpose asserted in the affidavit of Ms King reflected at [14] and [25] and thus the determination of the factual question. The Tribunal concluded that the surveillance videos identified as Document E124 in Annexure "KAK1" to Exhibit 1 relate to a claim by Ms Foster for compensation and to the extent that the surveillance videos contain personal information about Ms Foster, the videos do not constitute an exempt document under section 42 and therefore are not properly the subject of a claim for legal professional privilege (apart from any question of whether an exemption might arise under sections 36 or 37 of the FOI Act ). Comcare contends that the circumstance that the surveillance videos contain personal information about Ms Foster does not operate to deprive Comcare of the exemption if the surveillance videos were brought into existence for the dominant purpose identified by Ms King at [14] and [25]. Comcare further contends that Ms King's evidence is supported by paragraph 2 of the affidavit of Gary King, Exhibit 2, to the effect that Comcare directly undertook inquiries itself and engaged private investigators to conduct investigations on factual issues "in preparation for the proceedings in the AAT" . The facts and circumstances deposed to by Gary King were not contradicted before the Tribunal. Documents identified in Annexure "GTK1" to the affidavit of Gary King referred to the commissioning of private investigators to conduct surveillance by video recording in preparation for the Tribunal proceedings [documents 5, 7, 8, 13 to 21, 25, 38 to 40 at pages 56 to 62 of the Appeal Book]. 42 Ms Foster contends, in reliance upon Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52 at 122 - 123 and Propend Finance particularly at pages 515 --- 516 per Dawson J that no privilege can subsist for physical objects other than documents and since the privilege is a function of communications between a lawyer and a client for the relevant dominant purpose, it is the communication which is the subject of the immunity and not the document or thing. In Propend Finance , Dawson J made the observation at page 515 that to say a document is privileged is merely a "shorthand way" of saying that the "communication" constituted by the document is privileged which was an expression of opinion consistent with the view His Honour had expressed in Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52 at 122 when his Honour said the privilege attaches only to communications "made for the purpose of giving or receiving advice or for use in existing or anticipated litigation" . His Honour further said in Propend Finance at page 516 that legal professional privilege does not "protect a document from disclosure as a mere physical object any more than it protects from disclosure any other physical object" . 43 His Honour, in those observations, is not suggesting that a document which is brought into existence for the dominant purpose of giving or obtaining legal advice or the provision of legal services including representation in legal proceedings is susceptible to disclosure because the privilege, properly understood, is a function of communications between the lawyer and the client. As Gummow J observed in Propend Finance at page 517, the privilege derived from communications with one's legal adviser for the relevant dominant purpose "extends to the various components of a communication" and to the extent that a document thus brought into existence is the expression of that communication it becomes the evidence of the communication as McHugh J observed in Esso Australia at page 80 [81]. The distinction His Honour was drawing was both to identify analytically the proper basis for the subsistence of the privilege and to illustrate the circumstances in which, for example, a document per se is not privileged. It is why a document which merely evidences a transaction --- a contract, for example --- which is not a communication seeking or giving legal advice or for use in the conduct of litigation (in the sense that it pre-exists in any actual or anticipated litigation) does not attract legal professional privilege, even if it is subsequently given to the legal adviser for the purpose of seeking advice or for use in litigation. 45 Ms Foster further relies upon the decision of French J in J-Corp Ltd v Australian Builders Labourers Federated Union of Workers (Western Australian Branch) (1992) 38 FCR 452 ( "J-Corp") . In those proceedings, J-Corp Pty Ltd sought injunctive relief and damages against the Australian Builders Labourers Federated Union of Workers (Western Australian Branch) (BLF) in respect of alleged contraventions of section 45D of the Trade Practices Act 1974 (Cth). Other respondent unions were joined in those proceedings. The matter of relevance for present purposes is that the BLF made arrangements for video tape recordings to be made of events which took place at the applicant's Rivervale building site when the BLF and other respondents established a picket line which was said to have the effect of obstructing or hindering the supply of goods and services to the applicant. The BLF contended that the video tapes were made in anticipation of and for the purposes of legal proceedings and were thus the subject of legal professional privilege affording an immunity against disclosure of the video tapes. But they are more than that. They were not taken in circumstances to which any confidentiality attached. To attach legal professional privilege to these materials would be to accord excessive respect to the adversarial aspects of litigation and insufficient weight to the objective of determining in litigation the facts in issue. To allow inspection of these materials, in my opinion, infringes no public interest and no established category of privilege. Its attraction is a function of whether, so far as the surveillance videos are concerned, they are the emanation of communications made for the dominant purpose of giving or retaining legal advice or the provision of legal services including representation in legal proceedings. 48 The point of departure between the facts of this case and those reflected in J-Corp lie in the apparent public nature of the recording of the public events surrounding the picket line which prima facie failed to comprehend the necessary quality of confidentiality. In other words, the material was not gathered as a function of a confidential communication between lawyer and client notwithstanding that the sole purpose for making a video recording of the picket line was for submission of the video to the lawyers for the BLF. 49 In Boyes v Colins (2000) 23 WAR 123, an intermediate Court of Appeal, the Court of Appeal of Western Australia, took a different approach to aspects of the reasoning of His Honour in J-Corp . In Boyes v Colins , the respondent was in possession of a surveillance video made of the appellant in relation to claims made by the appellant of certain physical disabilities. The respondent had caused the video of the appellant to be made for the purposes of the litigation and proposed to rely upon the video at the trial. Ipp J with whom Pidgeon and Wallwork JJ agreed observed that in Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674, Jacobs J had said at page 690, "Communications with one's legal adviser are privileged from disclosure and ... that privilege extends not only to communications actually made but to material prepared for the purpose of communication thereof to the legal adviser" . Thus, material furnished to the solicitor such as a witness statement to assist in contemplated litigation is privileged and on the same basis, the provision of the video film by the photographer to the respondent's solicitor must, consistent with principle, be regarded as a communication. In any event, in reliance upon a considerable body of authority, Ipp J concluded that legal professional privilege in relation to communications involving representation in actual or threatened legal proceedings does not depend upon information being "communicated". 50 The point of departure with the reasoning of His Honour in J-Corp by the Court of Appeal involved the notion that describing the video images as "real evidence" or direct evidence of matters in issue did not assist in determining whether legal professional privilege subsisted in respect of the communication of the video. The ordinary rules of privilege must apply and in the face of those rules, properly applied according to the proven facts as a matter of common law immunity, there was no "discretionary power" to compel the respondent to disclose the video film and compel waiver of the privilege. 51 There seems to be no real point of distinction between the principles which should apply to the surveillance videos and witness statements brought into existence for the purposes of litigation of the issues in controversy between parties. The privilege once established may involve a number of further considerations including whether the client has waived the privilege directly through intentional disclosure, whether the client has waived the privilege by implication and whether the circumstances are such that the necessary element of confidentiality in communication, such as in the case of J-Corp , is lacking. It may be that His Honour in J-Corp although he was not directly dealing with the question of implied waiver, had in mind some of the notions which influenced that consideration. For example, in Attorney-General (NT) v Maurice [1986] HCA 80 ; (1986) 161 CLR 475 at pages 487 and 488, Mason and Brennan JJ discussed the notion that circumstances might arise where by reason of some conduct on the part of the privilege holder, it becomes unfair to maintain or extend the privilege. Their Honours observed that the holder of such a privilege should not be able to "abuse it by using it to create an inaccurate perception of the proposed communication" . Similarly, His Honour Deane J observed at page 493 that a person may use privileged material in such a way that it would be unfair for him to assert the immunity. 52 In the circumstances of the present case, the notion that the video material related to a claim for compensation made by Ms Foster and contained personal information about her provides no basis for rejecting what would otherwise be a proper attraction of legal professional privilege on the facts. Accordingly, the Tribunal in finding that the surveillance videos are not exempt documents for the purpose of section 42 of the FOI Act applied an incorrect test to the operation and application of section 42. The Tribunal's decision will be set aside and the question of whether the documents listed in paragraph 25 of the Tribunal's Reasons are exempt for the purposes of section 42 of the Freedom of Information Act 1982 shall be remitted to the Tribunal for determination according to law. | application pursuant to section 44 of the administrative appeals tribunal act 1975 (cth) from the administrative appeals tribunal claims made under the safety, rehabilitation and compensation act 1988 (cth) application for access to documents under the freedom of information act 1982 (cth) claims of exemption on the ground of legal professional privilege sections 42 and 36 of the freedom of information act documents denied exemption before the tribunal as purely procedural only refer to information on the public record documents comprising letters between comcare and its external lawyers considered surveillance videos considered principles governing communications between lawyer and client for the dominant purpose of giving or obtaining legal advice for the provision of legal services including representation in legal proceedings considered. administrative law |
It carries on business hiring scaffolding in Australia and overseas. The respondent is a former employee and director of the applicant who, prior to the termination of his relationship with the applicant, was the manager of the applicant's branch office in each of the Republic of Azerbaijan and the Republic of Kazakhstan. The applicant alleges that, whilst engaged as the branch manager of the applicant's business in each of those two countries, the respondent, without the authority of the applicant withdrew USD 1,452,243 from the applicant's Azerbaijan bank account. It is also alleged that the respondent caused payments totalling not less than USD 1,334,369.35 due to the applicant, to be diverted to the bank account of a company which the respondent had established under the name of PCH AZ LLC in which he had a beneficial interest. Further, it is alleged that, after his position with the applicant was terminated, the respondent had failed to return scaffolding which belonged to the applicant worth USD 3.6 million and other property worth USD 323,000. The applicant alleges that by reason of these matters the respondent breached his duties under ss 180(1) , 181 (1), 182 (1) and 183 (1) of the Corporations Act 2001 (Cth) (the Act) and that he has breached his contract of employment and acted in breach of his fiduciary duty owed to the applicant. The applicant claims damages, compensation and delivery up. The respondent is ordinarily resident in the United Kingdom. Accordingly, the applicant seeks leave to serve its application and statement of claim on the respondent in the United Kingdom under O 8 of the Federal Court Rules (the Rules). The applicant proposes that service be effected by service through a private agent. In order for the Court to be satisfied that leave should be granted to serve an originating process out of the jurisdiction, it is necessary that the Court be satisfied that the Court has jurisdiction in respect of the proceeding, the proceeding is of a kind which is referred to in O 8 r 2 of the Rules, and that the person seeking leave has a prima facie case for relief claimed in this proceeding (O 8 r 3 of the Rules). There is also a discretion in the Court which may be exercised to refuse leave to serve the proceeding out of the jurisdiction. A basis on which this discretion may be exercised is that proceedings may be pending in another jurisdiction which may render the commencement of a proceeding in this Court vexatious or oppressive, or inappropriate on forum non conveniens grounds. The evidence which is filed in support of the application comprises an affidavit of Mr Guy Robert Rackham affirmed on 30 April 2009. It is a lengthy affidavit running to some 294 pages. The affidavit annexes materials including photocopies of cheques and reports of investigations which have been made into the conduct of the respondent in relation to the claims of breaches of duty and misappropriation, made in the statement of claim. The first issue is whether the Court has jurisdiction in relation to the proceeding. The applicant relies upon the Court's jurisdiction under s 1337B(1) of the Act and the accrued jurisdiction. The alleged breaches of ss 180, 181, 182 and 183 of the Act are said to have occurred in foreign countries, namely, Azerbaijan and Kazakhstan. The question is whether the Act, or at least those sections of the Act, operate extraterritorially, so that the Court would have jurisdiction in respect of acts or omissions in breach of those statutory duties which occurred outside of Australia. There is a presumption that Acts of Parliament operate territorially and so it is necessary to find some evidence of Parliament's intention that ss 180, 181, 182 and 183 are to apply to acts and omissions which occur outside of Australia. In my view, that intention is to be found in s 5 of the Act. The language is plainly capable of applying to acts and omissions which have occurred outside of Australia. Further, that these sections of the Act are to be construed as operating outside of Australia, is consistent with the position which has been taken in the United States of America, where the extraterritorial operation of similar provisions in the securities legislation of the United States is justified on the grounds that breaches of duty overseas by officers of an United States corporation may have an adverse effect within the United States. In my view, similar policy considerations apply to Australian corporations and the duties owed by their officers. Accordingly, in my view, notwithstanding that the alleged breaches of the Act are said to have occurred in Azerbaijan and Kazakhstan, they are allegations which are justiciable in this Court because of the extraterritorial operation of those sections of the Act. Further, the Court will have jurisdiction in respect of the claims founded on breach of the employment contract and breach of ordinary fiduciary duties by reason of the accrued jurisdiction, which would attach to the primary jurisdiction, which arises under the Act. The next question is whether the proceeding is of a kind which is mentioned in O 8 r 2 of the Rules. In my view, the proceeding falls within Item 12 of the table in O 8 r 2. This item applies to a proceeding based upon a breach of a provision of an Act, wherever occurring, seeking relief in relation to damage suffered wholly or partly in Australia. The applicant, as I have said, is an Australian company and the loss and damage claimed would be suffered here. The alleged breaches are breaches of the Act outside of Australia. The affidavit of Mr Rackham provides sufficient evidence of a prima facie case when applying the test referred to by French J (as he then was) in Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 109-110. Accordingly, the provisions of O 8 for service out of the jurisdiction are satisfied, subject only to the question of the exercise of the discretion. In this case, there is an unusual feature because in 2008 proceedings were commenced in Azerbaijan claiming compensation against the respondent in respect of the alleged breaches of duty and misappropriation referred to in the statement of claim. Whilst the proceedings initially sought to claim compensation in respect of these alleged breaches, the evidence discloses that the court in Azerbaijan refused to accept jurisdiction to deal with those causes of action by reason of their connection to Australia. The proceedings which are pending in Azerbaijan are now confined only to requiring the respondent to produce documents. The question is whether in those circumstances this Court should decline to permit this proceeding to be served out of this jurisdiction, on the grounds that it would be oppressive or vexatious on the part of the applicant to conduct proceedings against the respondent in two different forums, or that Australia would be an inconvenient forum within which to litigate the questions of breach of the respondent's statutory duties and breach of his common law duties. The co-existence of local and foreign proceedings is not vexatious or oppressive where relief is available in one forum which is not available in the other. Further, it cannot be said that Australia is clearly an inappropriate forum because there are strong connecting factors to Australia and the Azerbaijan court has declined to exercise jurisdiction in relation to these causes of action. Accordingly, I will grant leave to serve this proceeding out of the jurisdiction. There is also an affidavit from Ms Carolyn Dearing which annexes a document from the Attorney-General's department explaining that the appropriate method of service in the United Kingdom is by way of service by a private agent. On that basis, I permit the service to be effected on the respondent by way of a private agent. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | whether ss 180 , 181 , 182 , 183 of the corporations act 2001 (cth) apply to acts and omissions which occurred outside of australia service out of the jurisdiction proceedings pending in azerbaijan whether proceedings vexatious or oppressive corporations practice and procedure |
The first respondent was an officer and/or employee and/or duly authorized agent of the third respondent acting in the capacity of organizer. In the application the applicant appears to have misspelt the first respondent's surname name as "Nisbet". The correct spelling "Nesbit" is reflected in the respondent's amended defence. I give the applicant leave to amend the application to correct this error and direct it accordingly. The third respondent is an industrial association for the purposes of the BCII Act. The second respondent was dismissed from the proceedings prior to the hearing. The applicant seeks declaratory relief and the imposition of pecuniary penalties upon the first and third respondents in connection with conduct which allegedly occurred on 23 June 2008. The parties have filed an agreed statement of facts concerning this matter which I attach to these reasons as Annexure A. I am informed that the maximum penalty in the case of the first respondent is $22,000 and in the case of the third respondent, $110,000. The applicant submits that taking all factors into account the appropriate penalty for each of the first and third respondents is "in the vicinity of the upper end of the mid-range of potential penalties". The respondents submit that in the case of the first respondent the appropriate penalty is in the range $8,000-$10,000 and in the case of the third respondent, $15,000-$20,000. The first respondent was employed as an organizer from 7 June 1999 until 24 February 2009, during which period he was responsible for a number of industries including the shop fitting industry. He had been responsible for that industry since about 2006. The affidavit by Mr Close filed on 7 August 2009 discloses that shortly after the visit on 23 June 2008 referred to in the statement of facts, he was informed that there had been an "incident". His daughter was involved in the argument and there was a fair bit of foul language used. In addition to this there is a long lists of safety concerns at the factory that were noted and advised to Stan. As a result, he attended with the first respondent at Budget Shopfitters' premises in order to see if the matter could be resolved. At one stage Mr Lewis told Mr Close that matters had become "quite ugly" and that both parties were "quite aggressive". Certain safety issues were discussed, and there was then an inspection. Mr Close considered that many of the safety matters about which concerns had previously been raised had been remedied. The meeting on that day ended amicably. I proceed upon the basis that when Mr Close became aware that the incident was being investigated, he took steps to resolve any continuing difficulties. I also proceed upon the basis that although there may have been some safety issues requiring attention, the relevant threats were substantially motivated by broader industrial considerations. The first respondent's threats involved threatened abuse of power in order to cause ongoing disruption to Budget Shopfitters' business undertaking through industrial action, and to compel the expenditure of substantial amounts of money. The first respondent's refusal to provide a list of the alleged safety issues suggests that much of his conduct was not motivated by concerns about those matters. Similarly, his assertion that he would "find something" was an assertion of an intention to abuse his position and the power of his union. The matter is curious in that it is unclear why the first respondent should have chosen to behave in this way on this particular occasion. Mr Close thought it to be quite out of character. One infers from some of the things which were said that his attitude may have been partly the product of what might be described as the "cultural war" associated with the industrial policy of the previous federal government and the changes which have been made under the present government. Of course I make no comment as to the correctness or appropriateness of either approach to industrial relations. The first respondent has no record of previous contraventions of the Act or the Workplace Relations Act 1996 (Cth) (the "WR Act"). In those circumstances he may be treated upon the basis that this incident was a one-off lapse, to some extent out of character. However the conduct was quite extreme and completely unacceptable. The Court must demonstrate its disapproval of that conduct by fixing a penalty which will operate as a deterrent to others. There is no real suggestion that the first respondent expressed any remorse for his conduct at the time, although he has participated in the resolution of the matter and must be given credit for that, particularly for the fact that it has resulted in the avoidance of the need for a lengthy trial. The first respondent has left the third respondent's employ. It seems that he is no longer involved in the industrial relations field. Given that there was no previous misconduct of this kind, and that the relevant incident occurred on one discrete occasion, I am inclined to think that a penalty in excess of half of the maximum would be difficult to justify, even having regard to the seriousness of this particular conduct. The respondents suggest a range of $8,000-$10,000. I accept that submission. I fix the penalty at $9,000. As to the third respondent, a great deal of attention has been paid by the applicant to previous occasions on which unlawful conduct has been demonstrated, going back to 2003. Whilst such a record is no doubt relevant, two points must be kept in mind. First, many of the earlier events related to actions in other states. The union seems to operate through a series of semi-autonomous state organizations across the country. It may be that the record of one state branch is better than that of another. This fact may be relevant to the weight attributable to prior misconduct. Similar considerations might be taken into account in considering the previous misconduct of an employer corporation which operates through semi-autonomous branches. The second consideration is that any organization will, over a period of time, acquire a history, good or bad. The dynamics within a particular organization, which may produce misconduct at one point in time, may not be present at some other time. One should be cautious about inferring that a long history of misconduct, going back over many years, necessarily reflects the current mindset of the organization. Nonetheless the third respondent has a history of infringement of industrial legislation, including some infringements in Queensland. On the other hand, in this case, the conduct for which it is responsible, namely that of the first respondent, seems to have been out of character for him, and therefore not reasonably predictable. However as an employer itself, it was for the third respondent to ensure that clear guidelines were provided to its officers and reinforced so as to ensure that such behaviour did not occur. The third respondent cannot be treated as being innocent of previous infringements. The seriousness of the allegations cannot be overlooked. Further, when dealing with corporate employers or unions it is generally the case that only a substantial financial penalty is likely to have any deterrent effect. Loss will generally be borne by a relatively large number of people, so that perhaps none will actually feel any part of it. However it is also clear that the third respondent took steps to remedy the situation and has also cooperated in bringing the matter to a speedy and relatively economical conclusion. In the circumstances I consider that a penalty roughly equivalent to that imposed upon the first respondent, but reflecting the difference in maximum penalties, is appropriate. I fix the penalty at $40,000. I have been referred to the penalties imposed in numerous cases. However many were pursuant to the WR Act which provided for significantly lower maximum penalties. The penalties which I have imposed are generally consistent with those imposed by Jessup J in Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548. The conduct in that case was somewhat more serious than in this. However the penalties for individual breaches were reduced to reflect the overall extent of the misconduct. I further order that the third respondent pay to the Commonwealth of Australia a pecuniary penalty fixed at $40,000. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. | employee engaged in contraventions of s 44(1) of the building and construction industry improvement act 2005 (cth) employer engaged in similar contraventions by virtue of employee conduct admitted penalties to be imposed consideration of seriousness of conduct mid-range penalties imposed industrial law |
The Tribunal affirmed a decision of a delegate of the first respondent ('the Minister') not to grant the appellant a protection visa. He is a Christian who is an adherent on what the appellant referred to as " Wei Mau Lu " or " Family Church ", an underground Christian Church in China. He arrived in Australia on 8 January 1997. It appears from the appeal papers that he was detained as an illegal immigrant on or about 23 December 2004, rather than 23 October 2004 as recorded by the trial judge. 3 His application for a protection visa was refused by the delegate of the Minister on about 9 February 2005 and he applied to the Tribunal for a review of that decision thereafter. On 23 March 2005 the Tribunal had a hearing at which the appellant gave evidence and on 7 April 2005 it refused his application for review. 4 The appellant identified some errors in the dates which the trial judge gave for certain events in paragraph [2] of the judgment under appeal. I believe I have corrected those and, in particular, I tried to identify to the appellant during the course of argument how a figure that appeared to be a "10", and which his Honour used to give the date 23 October 2004, was perhaps "12" thus explaining the error in the date recorded for the appellant's detention in that way. 5 The basis on which the Tribunal refused the application is very appropriately summarised in the judgment of the trial judge. In essence, what the Tribunal did was to decide that there was a lack of credibility and reliability of the evidence of the appellant concerning his fears of persecution in China and the evidence he had used in respect of them. 6 The Tribunal took, I think it is fair to say, an adverse view as to the reliability of the appellant's evidence, describing it on some points as being fanciful. The Tribunal concluded that it was not satisfied that he had established a well-founded fear of persecution in China. The Tribunal did find that the appellant had a genuine involvement with community and church groups in Australia. However, it was not satisfied that that involvement would cause him, were he returned to China, to face a real chance of persecution. 7 The appellant applied to the Federal Magistrates Court on 28 April 2005 for orders to quash the Tribunal's decision. The trial judge heard the matter and delivered a reserved judgment on 25 October 2005 from which this appeal has been taken. Unless a jurisdictional error is established, section 474(1) of the Migration Act 1958 (Cth) ('the Act') provides that, in effect, the decision of the Tribunal is final and conclusive and must not be challenged, appealed against, reviewed, quashed or called in to question in any court. It is clear from the decisions of the High Court of Australia that the window for correction of errors in what the Tribunal did is narrow: see Abebe v Commonwealth Re Minister for Immigraiton [1999] HCA 14 ; (1999) 197 CLR 510 at p 534 [50] per Gleeson CJ and McHugh J; Re Minister for Immigraiton and Immigration and Multicultural Affairs: Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407 at p 409 [7] per McHugh J. 9 In Plaintiff S157 of 2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 at p 506 [76] Gaudron, McHugh, Gummow, Kirby and Hayne JJ said that an administrative decision which involves jurisdictional error is regarded in law as no decision at all. Thus, if there has been jurisdictional error due to, for example, a failure to discharge imperative duties or to observe inviolable limitations or restraints, the decision in question cannot properly be described in the terms used in section 474(2) as a " decision made under this Act ". 10 I have given anxious consideration to the material in the appeal papers and the submissions of the appellant for the purpose of seeing whether I can detect any arguable case of a jurisdictional error. I have also asked counsel for the Minister, pursuant to his duty to the Court, whether there is any basis, in the material before the court, on which an argument that there was a jurisdictional error might be raised other than the matters which I will discuss next. There was not identified by counsel or myself any such error which might be argued to exist. The judge below considered carefully and in detail each basis which the appellant put to him, many of which he also put to me. I am not sure whether the appellant intended to connote anything more than he believed that the result was wrong and that the trial judge should not have found, as he did, that the Tribunal's decision revealed no error amenable to correction. 12 I have examined the material in the appeal papers including his Honour's judgment. The appellant tendered no evidence and did not refer to anything in support of the allegation of bias except the ultimate result below. His Honour acted conspicuously in a completely fair and impartial manner, a fact which would have been apparent to a reasonable person observing the proceedings before the Federal Magistrates Court. I am of the opinion that there is no substance in the allegation and there is no evidence at all to support it. The first ground was that the Tribunal had questioned him unfairly and had not allowed him to answer questions. The second ground, which was related, was that the Tribunal did not give him, that is, the appellant, enough time to give his evidence. In particular the appellant drew attention to a passage in the transcript of the hearing before the Tribunal and sought to provide evidence of a transcription or translation of part of the tape recording of the hearing in relation to this matter. 14 I did not receive that material into evidence. But the appellant agreed that what he was seeking to say appeared in substance in the transcript, though in different words to those he believed had been used. In effect, the interpreter had said at one point in the Tribunal hearing that he or she had to leave by 12 noon and the Tribunal indicated that that was about the time it intended to conclude the hearing in any event. The basis of the appellant's submission was that this indicated that the Tribunal in effect hurried through the later part of the hearing and did not give him a fair opportunity to put all the matters that he would have put or to answer the questions in an unpressured manner. 15 The third ground argued before me and his Honour was that the Tribunal did not pay attention to the documentary evidence and photographs which the appellant had, which he said supported his claim. The fourth ground was that the Tribunal was biased against him. Lastly, before me and his Honour it was argued that the Tribunal wrongly took into account country information in coming to the decision against the appellant. An additional ground was argued before his Honour that if the tapes of the Tribunal were listened to it would be apparent from what was recorded on them that the hearing had not been fair before the Tribunal. 17 His Honour listened to the two tapes of the Tribunal hearing and concluded that " in short the tapes do not support the [appellant's] complaints ". The consideration which his Honour gave to the contents of the tapes, importantly, helped his Honour to find facts as to the complaints in relation to the procedural defects relied on by the appellant in support of his argument below. These findings are relevant before me. His Honour found from listening to the tapes that he could hear no unfair questioning and no specific example was evident where the Tribunal did not allow the appellant to answer questions on issues which were relevant to his claims. The judge found that it was not apparent from the tapes of the hearing that there was any substance in the complaint that the appellant was not given enough time to give his evidence. 18 His Honour did note that on a number of occasions the Tribunal had asked the appellant to deal with matters relevant to his claims. It is understandable that a lay person in a foreign environment in the position of the appellant before the Tribunal, or indeed before this court, would find it difficult to understand all of the reasons why he or she would need to be confined to, or responsive to, particular questions in circumstances where the hearing involved a matter of very great importance to their lives. But that perception on the part of a person in the appellant's position should not obscure the objective fact that when the trial judge listened to the tapes his Honour was able to form a clear view that there was no evidence of the relevant unfairnesses which the appellant claimed had occurred before the Tribunal. 19 I can discern no error in the approach taken by his Honour or the findings of fact which his Honour made on this matter. His Honour's judgment carefully reviewed each of the first three grounds in greater detail than I need do because I agree with his Honour's findings for the reasons he gave. 20 His Honour noted that the appellant had been represented before the Tribunal by a migration agent who had been present at the hearing. The agent made no complaint about any unfairness during the hearing. Nor, on the evidence, is there any suggestion that the agent made a complaint about unfairness in the Tribunal's procedure at any other time. At the conclusion of the Tribunal's hearing, the member allowed a further week for further submissions including translations of documents which were in the appellant's native language and which he had sought to put before the Tribunal at the hearing but had not, because of their not being in English, been able to be received. The member said at the end of the hearing that " ... if there were any other outstanding points in there that he [the appellant] wants to communicate there will be time in those further submissions ". 21 In light of both the fact that his Honour listened to the tapes and gave careful consideration to each of the complaints about alleged unfairnesses during the hearing, and the fact that the migration agent and the appellant had an opportunity after the hearing to address any issues of unfairness and to make further submissions, I cannot find any error in his Honour's reasons for concluding that each of the three grounds of appeal relating to the conduct of the Tribunal hearing have any substance. I reject them. 22 Likewise, his Honour considered, as I have done, the written material before the Tribunal. While his Honour did not have, as I have had, the benefit of the transcript of the Tribunal hearing, his Honour had the benefit of actually hearing the tapes of the hearings, including intonations or indications in the member's or others' voices which might indicate any perception of unfairness or bias. His Honour found that the allegation that the Tribunal was biased could not be sustained. I agree with his Honour's finding for the reasons he gave. 23 Lastly, the appellant raised the issue that the Tribunal had taken into account what is called country information in deciding against his case. His Honour considered this in paragraph [13] of his reasons. Section 424A(3)(a) of the Act provides that it is not necessary for the Tribunal to give particulars to an applicant of information that is not specifically about the applicant for review or another person and is just about a class of persons of which the applicant or other person is a member. 24 There is no doubt that in the Tribunal's reasons the member set out an extensive extract running over about six pages of very close, small type from the China chapter of the Department of State of the United States of America's country reports on Human Rights Practices for 2004 which were concerned with issues about religious freedom. The material appears to fall squarely within the class of information referred to in section 424A(3)(a) which the Tribunal was not obliged to draw specifically to the appellant's attention. Again, because the appellant was represented before the Tribunal by a migration agent, he had the benefit, unlike in this court, of having someone to assist him with knowledge of the practice and jurisdiction of the Tribunal. 25 The decisions of Full Courts of this Court referred to in his Honour's reasons, namely, Minister for Immigration and Multicultural and Indigenous Affairs v NAMW [2004] FCAFC 264 ; (2004) 140 FCR 572 and QAAC of 2004 v Refugee Review Tribunal [2005] FCAFC 92 , show that no jurisdictional error was committed by the Tribunal in failing to give particulars to the appellant of the information contained in the country information to which I have referred. 26 In the first of those Full Court decisions, Merkel and Hely JJ said at 140 FCR at pp 598-600 [133] ,600 [138] that they were of the view that the reference in section 424A(3)(a) to the class of persons should be construed literally and is not another criterion to be met but, as is the case with section 57(1)(b) , it is designed to underline the specificity required by precluding any argument that reference to a class could be taken as a reference to all individuals including, for example, an applicant falling within it (see too ASIC v DB Management Pty Ltd [2000] HCA 7 ; (2000) 199 CLR 321 at p 338 [34]-[35]). 27 For these reasons I am of opinion that the country information referred to by the Tribunal in its reasons, and about which reference the appellant complains, was within the exemption of section 424A(3)(a) and no jurisdictional error by the Tribunal has been shown. 29 I am of the opinion that the appeal fails. I order that the appeal be dismissed. [The parties made submissions on costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | appeal from a decision of a judge of the federal magistrate's court dismissing an application for judicial review of a decision of the refugee review tribunal appeal dismissed no question of principle s 474 , s 424(3)(a) followed minister for immigration and multicultural and indigenous affairs v namw (2004)140 fcr 572 followed plaintiff s157 of 2002 v commonwealth [2003] hca 2 ; (2003) 211 clr 476 followed qaac of 2004 v refugee review tribunal [2005] fcafc 92 followed re minister for immigration and multicultural affairs; ex parte durairajasingham [2000] hca 1 ; (2000) 168 alr 407 followed migration migration act 1958 (cth) abebe v commonwealth re minister for immigraiton [1999] hca 14 ; (1999) 197 clr 510 |
Seemingly it makes no difference whether the timetable is fixed with the consent of the parties or following argument. The view that has taken hold in many quarters is that a party is only required to keep an eye on the timetable and, if it cannot be met, it will be extended. The assumption is that the wronged party will be fully compensated by an award of costs. 2 The assumption may be true in some cases. But often it is not true when it comes to commercial parties involved in a commercial dispute. Those parties do incur losses resulting from delay that can never be compensated by a costs order. For one thing the costs are often not capable of being calculated. For another thing the costs are not only directly pecuniary. Take, for example, the cost that results from diversion of management time away from the firm's business and to the litigation. This should not be, but more often than not is, overlooked. There is also the opportunity cost of a dispute remaining unresolved. Every businessman knows that firms are often inhibited from taking action until the court determines whether the action is lawful. Ultimate success in the dispute will not undo the loss incurred in the past. Finally there is the ever growing discrepancy between the costs recovered pursuant to a costs order and a party's actual out of pocket expenses. Nowadays the party that obtains a costs order is lucky to get back 50 per cent of its actual costs. 3 The courts, in no small measure, are responsible for allowing this state of affairs to come about. One of the chief causes is the chilling effect of the High Court's decision in Queensland v J L Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. That was an appeal against the refusal by the trial judge to allow a party to amend its pleadings. The High Court ruled that case management, while a relevant consideration, does not trump justice to the parties. A close reading of J L Holdings shows that the High Court was confining its comments to the case where costs would provide full compensation to the opposite party. However, J L Holdings has been applied in many cases where a simple costs order will not do justice between the parties. The case has, in my view, unfairly hamstrung courts. Almost every day a defaulting party seeks the court's indulgence to extend time, amend documents or obtain some other allowance (often not for the first, second or third time) and successfully relies on J L Holdings to obtain relief. 4 It is time that this approach is revisited, especially when the case involves significant commercial litigation. One of the primary objects of a commercial court is to bring the litigants' dispute on for trial as soon as can reasonably and fairly be done. If, in some instances, the preparation of the case is not perfect so be it. A case that is reasonably well prepared is just as likely to be decided correctly as a perfectly prepared case. 5 I am of the firm view that parties should not be treated as leniently as they have been in the past. Commercial parties expect this approach from the courts and their expectation should be met. A useful rule to adopt is to allow an extension only if the failure to meet the existing timetable is the result of excusable non-compliance. In deciding whether there is excusable non-compliance the court should take into account, among other factors: (a) the direct and indirect prejudice to the opposing party; (b) the impact of the delay on the proceedings; (c) the reasons for the delay; (d) good faith or lack of good faith on the part of the party seeking to be excused; and (e) the effect of putting off a trial both on other litigants and generally on the court's ability to efficiently manage its cases. 6 Here the respondent's non-compliance is not excusable. Indeed this case is a particularly bad one as regards delay. The respondent is being sued for patent and design infringement. It counter-sues for revocation of both the patent and the design. Want of novelty is one of the grounds relied upon. Initially the trial was fixed to begin on 10 April 2007. On the eve of the trial the respondent said it was not ready to begin the hearing and sought leave to introduce further prior art with which to attack both the patent and the design. Leave was granted so that the respondent was not shut out from running its best case. 7 The consequence was that the trial date had to be vacated. It was refixed to commence on 19 November 2007. A new timetable was put in place. The Respondent shall file and serve any further evidence on invalidity upon which it wishes to rely at trial by 4 May 2007, but not otherwise. The Applicants shall file and serve any evidence in answer on invalidity by 27 July 2007, but not otherwise. The Respondent shall file and serve any evidence in answer on invalidity by 31 August 2007, but not otherwise. 8 Despite the orders (or in defiance of them) the respondent has served two reply affidavits in which it seeks to add to its evidence in chief. The affidavits were filed without leave. The application for leave to rely on the additional material was made orally at the recent case management conference. 9 The first of the affidavits was sworn by Mr Bloom. It was served on 1 October 2007. An earlier version had been served on 7 September 2007 but the exhibits were in a mess and the affidavit had to be re-sworn. Paragraphs 16-25, 34 and 38 add new material, said to be by way of reply, but in fact also doubling up as evidence in chief. They introduced new prior art. The second affidavit was affirmed by Mr Barrett on 4 October 2007 and served on 5 October 2007. The affidavit adds new material again said to be by way of reply but in fact adding to the prior art. That the evidence was not only by way of reply was in effect conceded by counsel who asked for leave to further amend the already amended particulars of invalidity to add to the prior art. 10 The affidavits were filed late because the respondent was unable to get them sworn any earlier. The witnesses are not in the respondent's camp and the respondent's lawyers had difficulty getting in touch with them. Still, if leave were granted to permit the respondent to rely on this evidence and amend its particulars of invalidity the trial will have to go off once again. This is an intolerable situation. The applicants are entitled to know now whether or not they have a valid patent and design. It is simply unfair to put off the trial yet again. This action was commenced in October 2005 and should have been completed a long time ago. Putting it off is not only unfair to the applicants, it is also inconvenient for the court. The case has been listed to run for 7-10 days and if it is taken out of the list not only the applicants but other litigants will be prejudiced. 11 Leave to rely on the additional material is refused. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | timetable for filing evidence extension sought prejudice to opposite party extension refused practice and procedure |
The application is made pursuant to s 459P by a creditor of the respondent. The creditor relies upon the presumption of insolvency by operation of s 459C(2) of the Act arising out of the appointment of receivers and managers to the respondent by the secured creditors, Farallon Capital Pty Ltd ('Farallon') and Perry Holdings Australia Pty Ltd ('Perry Holdings'), pursuant to fixed and floating charges granted by the respondent company on 28 October 2004 and registered with the Australian and Securities Investment Commission ('ASIC') on 19 November 2004. 2 On 16 June 2006, the respondent pursuant to s 436A of the Act appointed Mr Peter Geroff and Mr Gregory Maloney of Ferrier Hodgson, as administrators of the company consequent upon the sole director of the company, Mr Gregory James Nunn, resolving that the company is insolvent. 3 Accordingly, it is common ground that the respondent company is insolvent. 4 I also have before me an application pursuant to s 440A(2) of the Act filed on 3 July 2006 by parties described as Farallon Capital Pty Ltd and Perry Catamarans Pty Ltd, to adjourn the hearing of the application for a winding-up order so as to enable the creditors of the respondent company to consider a proposal for a Deed of Company Arrangement at a meeting of creditors convened for Wednesday, 12 July 2006. The application is not made by the Administrators of the company. Section 437A of the Act places the control of the company's business, property and affairs, while the company is under administration, in the Administrators and by s 437C(1) no person other than the Administrator can perform or exercise a function or power as an officer of the company. Although the application recites Perry Catamarans Pty Ltd as an applicant, the company once under administration has no standing to apply. Mr Lee of Counsel who appeared for the applicants for the adjournment announced an appearance on behalf of Farallon and Perry Holdings Australia Pty Ltd. I will proceed on the assumption that the applicants for the adjournment are the two secured creditors. Farallon and Perry Holdings propose to provide $300,000.00 to Deed Administrators within seven days of the execution of a Deed of Company Arrangement to enable subject to the terms of the deed the unsecured creditors to receive in an accelerated way, a dividend which would exceed the dividend unsecured creditors might expect to receive upon a winding-up. 5 The circumstances are a little unusual in that the application is made by the two secured creditors. However, on 4 July 2006, the Administrators provided a report pursuant to s 439A(4) of the Act in relation to the business of the respondent, its property, affairs and financial circumstances. The Administrators are required by s 439A(4)(b) to set out a statement of the Administrator's opinion addressing whether it would be in the creditors' interests for the company to execute a deed of company arrangement; whether it would be in the creditors' interests for the administration to end; or whether it would be in the creditors' interests for the company to be wound-up. The statement must set out the reasons for the opinion expressed in the statement. The opinion of the Administrators is that the Deed of Company Arrangement proposed by the two secured creditors is likely to provide a better return to creditors than the distribution likely to be made in the event of a winding-up. 6 The application for the winding-up order is pressed vigorously by the applicant creditor and is supported by affidavits from nine other creditors. The applicant is owed an amount of $176,240.13 and the total value of the claims of those creditors who have sworn affidavits in support of the winding-up order constitute $461,485.68. The administrators assess the total value of external (non-related) claims by unsecured creditors as $1,437,815.00. The two secured creditors resist the winding-up order and have also assembled affidavits from creditors (seven in all) in support of the application for the adjournment. The combined value of those creditors supporting an adjournment of the application for the winding-up order constitute $245,475.88. 7 The question of course is not whether a pre-meeting alignment of support or resistance might result in a preponderance of support for one view or the other. The question is whether, on the material filed in support of the application for the adjournment of the hearing of the application for the winding-up order, the court is satisfied that 'it is in the interests of the company's creditors for the company to continue under administration rather than be wound up' (s 440A(2)). That section is framed in directory terms in the sense that the court 'is to adjourn the hearing of an application for an order to wind up a company' if the company is under administration and the court is satisfied, that is, affirmatively satisfied, that it is in the interests of the company's creditors to continue the administration in all the circumstances. In order to satisfy the court of the matter referred to in s 440A(2) of the Corporations Law, one would expect that there would have to be some persuasive evidence to enable it to be seen that there were assets which, if realised under one form of administration rather than the other, would produce a larger dividend , or at least an accelerated dividend for the creditors. (See TCS Management Pty Ltd v CTTI Solutions Pty Ltd [2001] NSWSC 830 per Hamilton J; Deputy Commissioner of Taxation v Yates Security Services Pty Ltd (1997) 26 ACSR 629 per Santow J; Waste Recycling and Processing Services of NSW v Local Government Recycling Co-Operative (1999) 32 ACSR 194 per Santow J). In TCS Management , Hamilton J at [15] embraced the observation of Young J in Deputy Commissioner of Taxation v Choice Design Homes Pty Ltd [1999] NSWSC 589 at [18] that, 'There must be a sufficient possibility , as distinct from mere optimistic speculation , that such a deferment for the envisaged time is in the interests of creditors' . The authorities on s 440A(2) require, in my view, more than a mere speculative possibility of a higher return to creditors if a winding-up application was to be adjourned, here in favour of the prospect of the Deed of Company Arrangement. In my view, there must be a real prospect of benefit from the adjournment. But it is too simplistic to say that that prospect must necessarily be, at this point, a comfortable satisfaction that a Deed of Company Arrangement will yield a greater amount than winding-up. Of course, in some cases that may already be safely apparent whilst in others the company is so evidently a basket case that further delay of the inevitable would simply add to costs; see, for example, Yates v Deputy Commissioner of Taxation. 11 In this case, the question is not whether the company might continue under administration so that assets of the company might be realised in one form of administration rather than another which would produce a larger or accelerated dividend for the creditors. The question is whether the proposal by the two secured creditors to promptly establish a fund to be administered under the terms of the Deed is one which is likely to more favourably serve the interests of the company's creditors as compared with the affect upon those interests derivative of a winding-up. 12 Apart from the issue of a comparison of the likely dividend as between the implementation of the proposed Deed of Company Arrangement and the likely distribution in a winding-up, the immediate question is whether it is in the interests of the company's creditors for the company to continue under administration so that the creditors might consider for the themselves at the meeting on 12 July 2006 where their interest lie, the competing proposals, the contextual financial circumstances in which their particular claims arose and the circumstances in which the proposal of the two secured creditors has emerged. 15 The respondent company was incorporated on 7 September 2004. The company traded from premises at Coomera in Queensland and operated a luxury catamaran boat building business. The original business was carried on by Perry Catamarans Australia Pty Ltd . That business was acquired by Farallon through two subsidiaries, Perry Holdings and the respondent company. Perry Holdings was incorporated to purchase the intellectual property and business assets from the operator. The respondent company was incorporated to purchase the trading assets and carry on the boat building business. 16 Mr Gregory Nunn is the sole director and secretary of the respondent company; the director and secretary of Perry Holdings which wholly owns the respondent; a director and secretary of Farallon; and the holder of the two issued shares in Farallon. Farallon holds 800 of the 1,000 issued shares in Perry Holdings. 17 The administrators in their report dated 4 July 2006 examined the trading performance of the respondent company in the conduct of the boat building business. In the period from acquisition in September 2004 to 30 June 2005, the respondent incurred a gross loss of $779,124.00 and a net loss (after expenses) of $3,085,282.00. In the period from 1 July 2005 to 24 April 2006, the company, although recording in its books of account, a gross profit of $1,563,653.00, suffered a further net loss (after expenses) of $2,851,548.00. On 24 April 2006, the company elected to appoint receivers and managers. In the period to 30 June 2005, current liabilities exceeded current assets by $640,703.00 and in the period to 24 April 2006 the working capital deficiency was $1,780,766.00. 18 On 28 June 2006, Mr Nunn provided the Administrators with a Statement of Assets and Liabilities as at 16 June 2006. Mr Nunn's estimate of the recoverable value of assets (ERV) was $1,947,948.00. Total priority creditors amounted to $7,259,368.00 (that is, employee entitlements and the claims of secured creditors). The value of estimated unsecured creditors was $1,260,454.00. The Administrators have subsequently assessed the value of unsecured unrelated creditors as $1,437,815.00. On 30 June, the receivers and managers paid priority employee entitlements of $395,000.00. 19 The trading activity of the company from the very commencement of operations was entirely dependent upon financial support from Perry Holdings. In the period 20 September 2004 to 21 April 2006, draw-downs were made each month by the respondent company in the total amount of $5,757,900.00. In addition, Perry Holdings did not seek payment of interest charges on debt nor payment of equipment rental charges totalling $419,824.00. Farallon, discharged a bank bill with the ANZ Banking Group Ltd totalling $1,000,000.00 on 21 April 2006. The total amount secured under the two charges in favour of Farallon and Perry Holdings amount to $6,937,873.00. After realisation of assets, the shortfall will be approximately $5,000,000.00. In a winding-up of the respondent company, Farallon and Perry Holdings would prove for the amount of the shortfall. There is also a further related party claim for $35,997.00. 20 The point that is made by those supporting the application for the making of a winding-up order and opposing the application for the adjournment is this. The operation of the respondent company has been in the hands of Mr Nunn from the very outset. Mr Nunn is also the director and secretary of Perry Holdings and the director and secretary of Farallon. It would have been obvious to Mr Nunn, it is said, that the trading performance of the respondent company was such that very substantial losses were being incurred throughout the entire period. It would also have been obvious to Mr Nunn based upon the trading performance of the company in the conduct of the boat building business that there was no serious prospect that the company would be able to pay, upon demand or otherwise, the amount of the advances by Perry Holdings or the accommodation provided to the company by Farallon discharging the bank bill to the ANZ Bank. The payment of debts due to unsecured creditors as and when they fell due was entirely a matter within the determination of Mr Nunn as and when he chose to make funds available to the company by entities he controlled pursuant to fixed and floating charges granted in favour of those entities. Notwithstanding the intimate understanding by Mr Nunn of the trading and financial performance of the company, Mr Nunn allowed the applicant creditor to supply goods in late March 2006 and in April 2006 to the total value of $176,240.13 in circumstances where Mr Nunn must have known that the company had no capacity to pay that amount from its own resources and no capacity to repay any advances by the secured creditor should Mr Nunn have a conversation with himself and elect to advance further monies from the mortgagee to the mortgagor company. Other creditors in support of the winding-up application also criticise the acceptance of goods and services by Mr Nunn on behalf of the respondent company in circumstances where, it is said, it must have been clear to Mr Nunn that the company had no capacity to pay the legitimate claims of third party creditors and no capacity to repay advances from Perry Holdings. In the result, unsecured creditors to the value of $1.4 million have not had their claims paid. 21 The Administrators in their report express the view that it can not be said that the company was insolvent until the moment in time on 22 April 2006 when the secured creditors made an election not to continue to support the company. That view rests upon the assessment by the administrators of the observations of their Honours, Giles, Hodgson and McColl JJA in Lewis (as liq) of Doran Constructions Pty Ltd (in liq) and Anor v Doran & Ors [2005] NSWCA 243. In particular, in determining whether a company is solvent for the purposes of s 95A of the Act, regard must be had to the commercial or practical realities of inter-group financing. It comes down to a question of fact, in which the key concept is ability to pay the company's debts as and when they become due and payable'. Accordingly, when the respondent company incurred an obligation to pay creditors for the value of goods supplied, it did not do so in circumstances of insolvency and, more particularly, it did not do so in circumstances which would give rise to a claim against either Mr Nunn or Perry Holdings or Farallon under the Act. Accordingly, such a claim is not, properly considered, an asset which might be recovered in a winding-up. Alternatively, the pursuit of such a claim would require a liquidator to conduct an oral examination of a number of individuals including Mr Nunn, senior management of the respondent company, senior staff (including the CFO) of Perry Holdings and Farallon and other stakeholders of Perry Holdings and Farallon. Since the insolvency arose only on 22 April 2006, only those debts incurred after that date would be the subject of such a claim. 25 The fixed and floating charges secure monies payable upon an 'event of default' should the mortgagee elect to make demand for the immediate repayment of the secured money or exercise other rights and powers conferred by the security. A proof of debt has been lodged in the administration for the full amount of the secured debt of $6,937,873.00 although the shortfall will be approximately $5M. Although it may well be true that at the moment in time that debts to unrelated third parties were incurred, no demand had been made and therefore the secured monies were not then immediately due and payable, there is a reasonable basis for inferring that when a number of the debts to unsecured creditors were incurred (particularly in March and April 2006 but also earlier) Mr Nunn must have known that a demand he might choose to make wearing his Perry Holdings' hat could never be satisfied by the respondent company. 26 Although it is not a part of the current application to consider the strength or otherwise of any possible claim that might subsist against Mr Nunn, Perry Holdings or Farallon, preliminary assessments of those matters have influenced the assessment by the Administrators of whether it is in the interests of the creditors to adjourn the winding-up application and enable the creditors to consider the proposed Deed of Company Arrangement at the meeting on 12 July. In supporting the notion that the proposed distribution under the Deed exceeds the estimated return upon a winding-up of the company, the Administrators made this comparison. If legal proceedings are taken to establish a claim for recovery of the full amount of the value of the claims of unsecured creditors ($1.4M) incurred in contended insolvent circumstances and a liquidator recovers the legal costs of pursuing that claim, the total revenue available for distribution in a winding-up would be $1.5M. The Administrators assess that the costs of deriving that revenue would involve a number of items of expenditure including $50,000.00 general administration charges; liquidator's costs $50,000.00; legal and counsel's fees $100,000.00; litigation costs (liquidator's remuneration - $100,000.00 and legal and counsel's fees $200,000.00); --- total - $500,000.00. The net estimated proceeds available for distribution to provable creditors therefore constitutes $1M. The value of unrelated unsecured creditors is $1.4M. The value of related party unsecured claims is $5,035,997.00. The total estimate of unsecured creditors is therefore valued at $6,435,997.00. The amount available for distribution is $1M. The dividend upon distribution would therefore be 15.5 cents in the dollar. The Administrators assess this distribution as the best case scenario in a winding-up. 27 Such an assessment involves acceptance of the notion that the creditors would fund litigation to recover those amounts incurred by the company in insolvent circumstances and that the full amount would be actually recovered. A second scenario assumes that the creditors would not fund legal proceedings but an insurer would be identified and arrangements struck so as to provide funding based upon a premium being paid to a litigation insurer. That assessment results in a potential dividend upon a winding-up of 6.8 cents in the dollar on the assumption that the full amount of the contended insolvent transactions would be recovered. A third scenario postulates a worst case scenario where a liquidator fails to establish a right of recovery. The distribution would then be nil. 28 Under the Deed of Company Arrangement, the proposal involves the payment of $300,000.00 to the Deed Administrators. The Administrators assess the costs of administering the deed at $50,000.00. The amount available for distribution to unsecured creditors would then be $250,000.00. Under the deed, neither Perry Holdings nor Farallon nor the third related creditor, Computer One Software Pty Ltd, would participate in any distribution. In that case the fund distributed amongst the unrelated unsecured creditors would result in a dividend of 17.9 cents in the dollar. 29 Accordingly, it is said that a dividend under the deed will be greater than the most favourable outcome in a liquidation and the deed fund would become available promptly and available for distribution quickly. Thus, the proposal under the deed is said to be more favourable to the unsecured creditors and represents an accelerated outcome. 30 The Administrators have expressed a number of views about the prospects of establishing a claim against Mr Nunn, Perry Holdings or Farallon. The Administrators make these observations in their report of 4 July 2006. First, the probability is that the company only became insolvent on 22 April 2006 (cl 6.3.2). Secondly, only $300,000.00 of purchase orders were accepted in the period 1 to 24 April 2006 and $70,000.00 in the period 13 to 24 April 2006 (cl 6.3.2). Thirdly, the claim against Mr Nunn would be unsuccessful (cl 6.3.3). Fourthly, the likely recovery from an insolvent trading action against Perry Holdings or Farallon would be nil (cl 6.3.4). Fifthly, the preliminary investigation into the company's affairs does not reveal any unfair preference payments (cl 6.4.1) nor any transactions of an uncommercial nature (cl 6.4.2) nor any unfair loans (cl 6.4.3). Sixthly, the Administrators say their investigations do not reveal any evidence of falsification of books (cl 6.5.2), any false or misleading statements (cl 6.5.3) or any evidence of any false information (cl 6.5.4). 31 Whilst it is of course true that in assessing the solvency of the company for the purposes of s 95 of the Act regard must be had to the 'commercial realities' of inter-group financing and the extent to which a company within the group may have acted as 'a banker' to another member within the group, it remains important to recognise that the inability to repay an inter-group debt when it becomes due and payable is a circumstance, in the context of the trading activity of the debtor entity, that is likely to be emergent well before any demand is made. A director charged with the governance of a trading entity incurring debts to unrelated creditors and who is also a director of an inter-group mortgagee lender will actively understand the implications of the burden of the debt assumed by the trading group member notwithstanding that a demand might be made well after the progressive assumption of significant debt. If it is apparent that both the mortgagor and security holder particularly by force of the role of a sole director or a common director who is the guiding mind of both entities, know the trading performance of the trading entity and the capacity of that trader to service a demand from the mortgagee once made, 'commercial realities' might suggest that in plotting a point of insolvency on the continuum in the affairs of a company, insolvency might arise when it is clear that by reason of the assumption of the debt it has become impossible in a practical sense to repay that debt when it falls due. That this respondent company proceeded on the footing that the debt would be repayable upon demand is clear from the election to lodge a proof of debt in the administration for the amount of the security and seek a dividend in respect of the net shortfall of $5M. 32 These questions are examined not for the purpose of expressing a view about the ultimate merits of such a matter but to test the proposition influential in the opinion formed by the Administrators that in the circumstances of the relationship between Mr Nunn and the three entities (the respondent company, Perry Holdings and Farallon) insolvency only arose on 22 April 2006 when the secured creditors elected to withdraw support, that is to say, when Mr Nunn decided that in his capacity as a director of Perry Holdings and Farallon, he would not continue cause the secured creditors to continue to support the respondent company of which he was the sole director and guiding mind. 33 It seems to me that there is an element of sophistry (although not deliberately so) in the Administrators saying that insolvency only arose on 22 April when the security holders through Mr Nunn withdrew financial support from the trading entity controlled by Mr Nunn leaving $1.4M of unsecured creditors unpaid. 34 It seems to me that there is an arguable prospect that the claims of a number of the unsecured creditors were incurred in circumstances of insolvency and it may be that there are prospects worthy of investigation as to whether causes of action might subsist against Mr Nunn or Perry Holdings. Nevertheless, such claims would have to be established and the process of establishing those claims would need to be funded. As to Perry Holdings and Farallon, the Administrators say that in any event those entities would be entitled to set off against any claim established against either of them, any amounts payable to them by the respondent company. 35 In making the comparative calculation, the Administrators have assumed the recovery by a liquidator of the full amount of the debts incurred in insolvent circumstances. The Administrators have correctly identified that the pursuit of any claim is likely to be resisted and significant costs will be incurred. There can be no guarantee that a claim will result in the recovery of the full amount of the value of the transactions claimed to have been incurred in insolvent circumstances. It seems to me that a foundation for the best case scenario in the event of a liquidation, on the assumptions contained in the Administrators report, at 15.5 cents is open. I recognise that the report of the Administrators is preliminary and the assessment does not emanate from a comprehensive analysis of the affairs of the company. Plainly enough, the secured creditors for the purposes of the Deed of Company Arrangement, have formulated a proposal which will provide an amount of money which, after expenses, will result in a dividend slightly greater than what might be thought to be the best result in a liquidation. 36 By way of further illustrative comparison, if the full amount of the claims of unsecured creditors which might be susceptible of action, was paid without the necessity of incurring the identified expenses of public examination and litigation, an amount of $1.4M (less $50,000.00 administration fees) would be available for distribution ($1.35M) amongst the total estimated unsecured creditor claims of $6,435,997.00 resulting in a dividend of 20.97 cents. A fund of $343,580.00 would be required to produce an amount of $293,580.00 for distribution under a deed to provide unsecured creditors with a distribution of 20.97 cents. 37 The applicant creditor seeking the winding-up order together with a number of supporting creditors press for a winding-up order on the basis, at least in part, of concerns that Mr Nunn allowed and in some cases pressed for the supply of goods in circumstances where, they say, he must have known that there was no prospect of those claims being paid or, alternatively, the possibility of payment was merely at the election or whim of Mr Nunn. The applicant says that the powers of a liquidator are expansive and the Act provides the necessary machinery to enable a liquidator to properly investigate whether there are matters which ought to be pursued which may result in a greater distribution to the creditors than that proposed under the Deed of Company Arrangement. The applicant for the adjournment says that the distribution under the deed is real, greater than the best case scenario in a winding-up on the present evidence and will produce a fund available for distribution quickly. Moreover, to the extent that contraventions of s 588G(2) have occurred, ASIC has standing under s 1317J to apply for a declaration of contravention, a pecuniary penalty order or a compensation order under ss 1317E , 1317G and 1317H , in addition to the remedial provisions of s 588G. 38 It seems to me that the evidence reflected in the report of the Administrators provides at least a basis for concluding that the Deed of Company Arrangement provides a possibility of a greater and accelerated dividend to creditors than would be the case in a winding-up on a best case assessment assuming for the moment that claims made by a liquidator were resisted, significant costs were incurred, a judgment for the full amount for the claim of $1.4M was awarded and the amount of any judgment was actually recovered. A significantly different outcome would emerge if the relevant claim was only partially successful or, obviously enough, if the claim failed. I accept the proposition that ASIC remains in a position to assess and determine as it sees appropriate whether circumstances suggest that conduct has occurred which would give rise to contraventions of or offences against the Act. 39 The respondent to the adjournment (the applicant for the winding-up order) relies upon a further observation of McPherson JA in Creevey v DCT (supra) at 457 to the effect that an adjournment would ordinarily not be granted where there is no, or practically no evidence, that the company has any assets. That is true in circumstances where there is no prospect of realising any asset which might then feature in a potential distribution to unsecured creditors. The failure of the company and its wasting of assets does not of itself provide a basis for necessarily making a winding-up order if a party is prepared to establish a fund on terms which would enable a distribution to be made to creditors when none would arise or when a dividend in a winding-up would be likely to be less than a distribution under a proposed Deed; would be dependent upon litigation; and would be deferred. 40 The respondents to the adjournment further rely upon the observations of Gyles J in Deputy Commissioner of Taxation v K J Consulting Pty Ltd [2005] FCA 1827. The factors that Gyles J suggests are influential against adjourning an application for a winding-up order are these. Firstly, the fact that the company is not trading; secondly, the undoubted insolvency of the company; thirdly, the composition and attitude of the creditors; and fourthly the recognition that a liquidator has more ability to follow potential breaches of the law than administrators. All of these factors are said to be made out in the present case and suggest strongly that the application for the winding-up order ought not to be adjourned. 41 It seems to me that each of these matters must contextually be considered against the background of whether there is, on the present material, a real prospect of a better outcome under the Deed than in a winding-up or, if the measure of the dividend is similar, whether the dividend can be achieved more quickly under the Deed. Although it seems to me that the circumstances of the relationship between the three entities and the role of Mr Nunn in each of them gives rise to a basis for suggesting that as a practical reality, a circumstance of insolvency may well have arisen earlier than the administrators contend for, there is no doubt that Perry Holdings and Farallon provided loan monies and financial accommodation of substance and that in a winding-up those related party transactions would rank for distribution. If an assumption is made that the full amount of the unrelated, unsecured creditor claims ($1.4M) might be recovered from Mr Nunn or from Perry Holdings or Farallon under s 588V (and assuming no set-off operates), the dividend will be 15.5 cents. Since the dividend under the deed is likely to be 17.9 cents without contest or the need to establish causes of action, the assessment by the administrators is more than 'a mere speculative possibility of a higher return'. 42 The opponents of the adjournment also say that the proposal to establish a deed fund of $300,000.00 should be viewed with scepticism because there is no obvious commercial purpose for establishing the fund and an inference should be drawn that the fund is proposed for the purpose of foreclosing any analysis or scrutiny of the conduct of Mr Nunn, Perry Holdings and Farallon. The monies will be deposited to the trust account of the lawyers of Perry Holdings and Farallon prior to the second creditors' meeting and the lawyers will hold an irrevocable authority to pay the Deed Administrators the fund within seven days of the resolution of the creditors to approve the proposal. (b) All employee entitlements will be paid in full from the assets secured by the floating charge. Should those entitlements not be discharged prior to the second creditors' meeting, the Receivers and Managers will become a party to the Deed for that purpose. (c) Neither Perry Holdings nor Farallon will participate in any dividend paid under the Deed however both entities otherwise retain their rights against the respondent company. (d) Computer One Software Pty Ltd, a related entity, will not participate in a distribution under the Deed. (e) All other creditors will be entitled to participate in full and final satisfaction of any claims against the company. (f) The Deed Administrators will first pay from the Deed fund, the costs and expenses of administering the Deed. (g) Upon payment of the $300,000.00, the respondent company will be released from all claims by participating unsecured creditors. To that extent, upon the events contemplated by the deed occurring, participating unsecured creditors will receive satisfaction of their claims as creditors by acceptance of the dividend upon distribution of the deed fund. The deed contemplates that the company will secure its release from all claims upon payment of the deed fund to the deed administrators by Perry Holdings and Farallon although the distribution may not take place for some time after that. 45 There are however other considerations which seem to me to be important. Section 588G addresses the statutory circumstances in which a director has a duty to prevent insolvent trading. Section 588G(2) addresses the failure on the part of a director to prevent a company from incurring a debt in the circumstances of the application of the section (s 588G(1)). Section 588J contemplates that on an application for a civil penalty order against a person in relation to a contravention of s 588G(2) the court may order such a person to pay the company compensation equal to the amount of the relevant loss. The company liquidator may intervene in such an application (588J(2)). Section 588M(3) contemplates that a 'creditor may as provided in Subdivision B but not otherwise, recover from the director as a debt due to the creditor , an amount equal to the amount of the loss or damage' . Subdivision B deals with proceedings by a creditor. Section 588R(1) provides that 'a creditor of a company that is being wound-up may, with the written consent of the company's liquidator, begin proceedings under s 588M in relation to the incurring by the company of a debt that is owed to the creditor' . Section 588S provides that a creditor in respect of a company being wound-up may give the company's liquidator a written notice stating that the creditor intends to take proceedings under s 588M and ask 'the liquidator to give the creditor, within three months after receiving the notice, a written consent to the creditor beginning the proceedings; or a written statement of the reasons why the liquidator thinks that proceedings under section 588M in relation to the incurring of that debt should not be begun. ' (s 588S(b)(i)and(ii)). The creditor, pursuant to s 588T(2) may begin proceedings if at the end of three months after the liquidator has received the notice, the liquidator has not consented and an application is made to the court for leave to commence the proceedings. Section 588U prevents a creditor of a company that is being wound-up from commencing proceedings under s 588M if the company's liquidator has made an application in respect of matters contemplated by s 588FF in relation to the debt (that is, orders in relation to voidable transactions) or the company's liquidator has begun proceedings under s 588M or has intervened in an application for a civil penalty order for the purposes of s 588G(2). 46 The consequence of these provisions is that a creditor enjoys certain rights and entitlements under the Act (in the events contemplated by the provisions) which can only be asserted in circumstances of a liquidation. The creditors entitlement to exercise rights contemplated by Subdivision B of Division 4 of Pt 5.7B would be lost in the absence of a winding-up order. 47 The possibility that one or more creditors in the circumstances of this case might be able to establish those elements which would enliven a right of recovery against a director as a debt due to the creditor of the amount of the debt incurred by the respondent company in circumstances of a contended insolvent transaction, raises the question of whether within the group of creditors of the company whose interests must be considered for the purposes of s 440A(2) , there are differential interests. There may be creditors, for example, whose debt was incurred in circumstances which gave rise to no basis for the assertion of rights specific to them. On the other hand there may be creditors whose debts were incurred in circumstances which have given rise to wider rights under the Act specific to them. Moreover, the company's creditors include claims to the value of $5M out of total unsecured creditor claims of $6,435,997.00 by parties related to the respondent company (that is, those parties promoting the deed of company arrangement and seeking to adjourn the application for a winding-up order). The question therefore is whether in making an assessment of the extent of the court's satisfaction that 'it is in the interests of the company's creditors for the company to continue under administration rather than be wound-up ', the cohort of creditor claims must exhibit some degree of unity of interest. If that cohort of claims reflects or arguably reflects differential interests, it would be important for the applicant for the adjournment to establish that it is in the interests of each group of creditors exhibiting a particular interest that the company continue under administration. In the consideration of applications for the convening of meetings in connection with schemes of arrangement, it was the practice to conduct separate meetings of those groups of creditors with relevantly differential interests. Under s 440A(2) the question is simply whether it is in the interests of the company's creditors to continue the administration. If the effect of the meeting is to approve a deed of company arrangement which will extinguish the claims of creditors, release the respondent company and prevent a liquidation which would in turn foreclose any opportunity for a relevant creditor to consider and if thought fit, invoke the processes contemplated by Subdivision B of Division 4 of Pt 5.7B , I remain unpersuaded that the evidence demonstrates that such a result is in the interests of the relevant creditors of the company. As a result, it has not been demonstrated that it is in the interests of the creditors to continue the administration of the company. 48 If a creditor, in exercising rights under the Act is able to demonstrate a basis upon which the amount of the debt payable to that creditor by the respondent company might be recoverable against a director as a debt due to the creditor and that possibility is foreclosed, that creditor (or those creditors) would be entitled to recover the full amount of the value of the insolvent transaction and not simply either 15.5 cents, 6.8 cents, nil cents or 17.9 cents. 49 In TCS Management Pty Ltd v CTTI Solutions Pty Ltd (supra) Hamilton J ultimately concluded [18] that the onus on the applicant for an adjournment of the winding-up application is one of establishing 'a good case that there will be a greater or more accelerated return from the course proposed' under the deed of company arrangement. It seems to me that the quality of the case made out must be one which demonstrates that the interests of all creditors are accommodated to a greater degree or with greater acceleration than they would otherwise be in the course of a winding-up. 50 Notwithstanding the assessment of the three scenarios contained in the report of the Administrators and an acceptance of the basis for those scenarios, I cannot be satisfied that it is in the interests of all creditors that the application for a winding-up order be adjourned. 51 Accordingly, I would dismiss the application for adjournment and make a winding-up order. | winding-up consideration of an application for adjournment pursuant to s 440a(2) of the corporations act 2001 (cth) of a winding-up order consideration of the meaning and approach to the phrase 'interests of the company's creditors' in an assessment of whether a company should continue under administration rather than be wound-up consideration of whether s 440a(2) requires a community of interest consideration of the onus under the section. corporations |
EBD is party to Federal Court proceedings WAD 73 of 2008, (the Distribution Proceedings) which is an application by Emu Brewery Mezzanine Ltd (EBM) for approval to make a distribution to its creditors. In the Distribution Proceedings, 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. EBD has filed a minute of proposed statement of claim in the Distribution Proceedings. As it has no funding to pursue this claim it has applied to the Court for a pre-emptive costs order to be paid out of the money which would otherwise be distributed to EBM's creditors. That application was part heard. Meanwhile it has attempted, unsuccessfully, to obtain litigation funding. Subject to obtaining directions from the Court in the present application, EBM and EBD have agreed to compromise the claim made by EBD for the sum of $1.5 million. Part of this sum will be used by EBD to pay professional fees incurred to date of approximately $463,000. If the compromise is effected, EBM will be in a position immediately to distribute the remainder of the funds available to its other creditors. The compromise has been reached in circumstances where EBD cannot predict the outcome of its application for pre-emptive funding in the Distribution Proceedings and where it has no other available funding. In these circumstances, unless a settlement were reached and approved prior to resolution of the application for a pre-emptive costs order, EBD may recover nothing if that application is unsuccessful as it is without the means to further pursue its claim against EBM. Section 477(2A) applies to a liquidator appointed by a creditors' resolution, by reason of s 506(1A) of the Act. The compromise is recorded in a Deed of Settlement and Release (Settlement Deed) dated 13 October 2009 executed by EBD and EBM together with their respective liquidators. Its terms were approved by EBD's creditors and accords with the advice given by EBD's counsel. The Settlement Deed is of no effect until approval of EBD's liquidators entering into it is obtained from the Court pursuant to s 477(2A) and a direction is obtained under s 511 that they are justified in entering into the compromise. The plaintiffs submit that the orders sought in this case correspond with those made in a number of cases, including QBE Workers Compensation (NSW) Ltd v GJ Formwork Pty Ltd (2006) 56 ACSR 687 and Re HIH Insurance [2004] NSWSC 5. In those cases, the order regarding the liquidator's justification for entering into the settlement was made under s 479(3) of the Act. The plaintiffs submit that s 479 and s 511 perform similar functions citing Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209 at 212. However, as Young J pointed out this is not "completely true". Section 511(1)(a) provides relevantly that a liquidator may apply to the Court to determine any question arising in the winding up of a company. By s 511(2) relevantly, the Court, if satisfied that the determination of the question will be "just and beneficial" may accede to the application. Here the question for determination as put in the application is whether EBD's liquidators are justified in entering into the Settlement Deed. I am satisfied that the determination of this question will be just and beneficial. I am of the opinion, and if necessary direct, that the entry into the Settlement Deed by Mr Ian Charles Francis and Michael Joseph Ryan as joint liquidators of EBD is justified in all the circumstances. The jurisdiction to give approval under s 477(2A) is conditioned upon the compromise relating to a "debt" of a company. The Court may approve a compromise if one of a number of ways of presenting a claim involves a "debt" claim: Elderslie Finance Corporation Ltd v Newpage (No 6) [2007] FCA 1030 ; (2007) 160 FCR 423 at [40] - [41] . In the present case, one way in which EBD has framed its claim is that payments made by it to EBM upon false invoices were made pursuant to sham transactions, and of no legal effect and that consequently, there is no basis upon which EBM may retain the money paid by EBD. This is a claim for restitution of an amount wrongly paid which is capable of constituting a "debt". The fact that the major creditors of EBD have had the opportunity to consider the proposed settlement, and do not oppose it, is also important. So too is the fact that EBD's liquidators have a limited opportunity to choose between the prospect of pursuing a novel application and the certainty of a settlement. For all these reasons the compromise constituted by the Settlement Deed should be approved pursuant to s 477(2A) of the Act. There should also be a direction that the liquidators of EBD are justified in entering into the Settlement Deed. The order and direction are intended to meet the conditions precedent under clause 2 of the Settlement Deed. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | liquidators compromise of debt court's approval of settlement deed s 477(2a) corporations act 2001 (cth) terms of settlement approved by creditors just and beneficial s 511 liquidators justified entering into compromise. corporations |
3 Judith Goh's defence is that by a Minute of the Company dated 31 March 2004, she was appointed as a director and provided with a share allocation. She also claims that some of her earnings as a gynaecologist were paid directly into the bank account of the Company and that as a result she was to be given a share allocation. 4 On 2 November 2006 the plaintiff filed a notice of motion seeking orders that discovery be made of Judith's taxation returns and any documents from the Company's accountant relating to the preparation of its taxation returns and financial reports. At the hearing of the motion, counsel for the plaintiff indicated that the documents from the Company's accountant had been received and that only Judith's tax returns would be pursued at that time. 5 It is apparent from the affidavit of Judith Goh that a substantial part of her case rests on earnings she says she received and payments she says she made out of those earnings. Her tax returns are basic financial records, and are inherently likely to provide information as to those matters. I am, frankly, a little surprised that their production has been resisted. There will be an order in terms of par 1 of the notice of motion. 6 The usual obligations, for which Harman v Home Department State Secretary [1983] 1 AC 280 is the leading authority, restrict the use to which a party that receives documents by way of discovery may put them. They are to be used only for the purpose of the litigation. There is no reason why any further restriction should be placed on use of them by the plaintiff. The plaintiff's conduct of the litigation should not be restricted by confining access to the discovered documents in the way suggested by masking parts said to be irrelevant. The plaintiff, as administrator, should be entitled to inspect the documents, along with his legal advisers and experts. 7 It has been necessary for the plaintiff to bring this proceeding and the plaintiff should get the costs of the motion, such costs to be taxed and paid forthwith. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | application for discovery of taxation returns practice and procedure |
For the following reasons, I have decided to grant leave. On 18 August 2009 the ACCC lodged an application and statement of claim seeking declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) and injunctions and other orders under ss 80 and 86C of the Trade Practices Act 1974 (Cth) (the Act). The ACCC contended that the respondent, a company registered in Valencia, Spain, had contravened ss 52 and 53 (aa), (c), (d) and (e) of the Act by causing to be published in Australia misleading and deceptive representations. These representations broadly concerned an online directory business listing service, including a business directory entitled 'Industry and Commerce' published on CD-ROM and on the internet. The ACCC contended the respondent sent a form to businesses and institutions in Australia to be completed and returned to the respondent. The respondent compiles the information to create the directory. This threshold 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: per French J in State of Western Australia v Vetter Trittler Pty Ltd (In liq) (Receiver and Manager Appointed) (1991) 30 FCR 102 at 110. The approach to be taken was discussed by Gray J in West v TWG Services Ltd [2009] FCA 1052. In that case, His Honour examined Bray v F Hoffman-La Roche Ltd [2003] FCAFC 153. The majority, Carr J at [36]-[55] and Branson J at [171]-[193], held that it was sufficient that there was a prima facie case for the relief sought on the basis of any of the causes of action relied upon. Finkelstein J dissented. In construing O 8 r 3(2)(c), I am, bound to follow the view of the majority in Bray. To the extent to which there are alternative claims for the same relief, it will be sufficient if there is a prima facie case for that relief on either of the bases claimed, in accordance with the principle in Bray to which I have referred. He found prima facie cases were made out in relation to some, but not all of the relief claimed. With respect to the relief sought on the basis of [another of the statutory claims], and on the basis of contract, the applicant does not have a prima facie case for that relief. This being the case, my view is that I should refuse the leave sought to serve the [originating process] on the respondent in England. 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 of the proceeding. To do so would be to allow the tail to wag the dog. The first two concerned the representation about the cost of the service and the mistakes contained in the forms. I am satisfied in relation to these matters that a prima facie case for the relief sought has been established. The third strand concerned the representation that the form was sent by an agency affiliated with the Australian Government. The ACCC's case was founded on three features of the form: the positioning of an Australian flag on the form; the reference in the form to a register; and the location and size of a disclaimer which said "European City Guide, SL, Martinez Cubells 6, 4, 8 - E.46002 Valencia --- Fax: +34902363471. This company is not linked to the institutions or agencies of the Australian Government". I was not satisfied that, in respect of this matter, a prima facie case for relief was established. I indicated as much at a hearing on 24 September 2009. Following that hearing, an amended application and statement of claim were filed on 15 October 2009. They no longer raised the allegation that the form suggested it was issued by an agency affiliated with the Australian Government. A prima facie case is raised by the amended statement of claim for the relief sought in the amended application and the provisions of O 8 r 3 are otherwise satisfied. I accordingly grant leave to serve originating process abroad. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | service of originating process abroad order 8 rule 3 federal court rules prima facie case practice and procedure |
In that decision the Tribunal affirmed a decision of a delegate of the first respondent refusing to grant the appellant a protection visa. The appellant is self-represented and presently resident in New South Wales. 2 The appellant is a citizen of India. He first arrived in Australia on 9 July 1999 on a student visa. On 3 August 1999, the appellant applied for a protection visa. In his application, he said he was a Sikh. He claimed that, in October 1998, Sikh militants commandeered a bus he was driving. He said that, soon thereafter, his brother and his father were taken into police custody, and later he was too. He claimed that he surrendered to the police who held him for two months and tortured him. The appellant said that he was only released after his family paid a bribe. After his release, he tried to acquire a passport. He claimed that as an accused militant it would have been very difficult to get a passport in his real name. The appellant claimed that in February 1999, while he was trying to get a passport, he was detained and tortured again by the police. According to the appellant, his parents sold his bus to pay a second bribe. He said that, after his release, he travelled to Utter Pradesh to hide from the Punjab police until he was able to travel to Australia. 3 A delegate of the first respondent refused the appellant's protection visa application on 7 December 1999. The appellant applied to the Refugee Review Tribunal (the "Tribunal") for a review of this decision. At the hearing before the Tribunal, the appellant repeated the claims he had made in his application for a protection visa. He also submitted a faxed copy of an arrest warrant in his name dated 19 April 2001 stating that he was charged with the offence of "212/216" of the Indian Penal Code (which relates to the harbouring of offenders). The appellant said that he would try to procure an original of the warrant and that he did not object to the Tribunal taking steps to verify the genuineness of the warrant. The appellant also supplied the Tribunal with a faxed copy of an affidavit from the head of his village, as well as from his father, stating that he had some criminal cases in the law courts pending against him and that the police had unlawfully detained his father and he for some days. The appellant also gave the Tribunal a letter from an advocate. 4 The appellant also claimed that he had medical problems with his eye as a result of the abuse he had suffered in India. The appellant claimed to have had an operation in India in 1998. The Tribunal, with the consent of the applicant, called the appellant's Australian doctor during the hearing. The appellant's doctor told the Tribunal that the appellant had never mentioned that his eye problem was related to abuse. The doctor said that the appellant has told him that he thought that chemicals were affecting his eye as a result of his working as an agricultural labourer. The doctor also said that the appellant had told him that he had an operation on 1996. The appellant told the Tribunal that his doctor was incorrect and that he had mentioned that he had been assaulted by the police. He also suggested that his friend, who had been translating for him, may have incorrectly told the doctor his operation had been in 1996 instead of 1998. 5 The Tribunal ultimately affirmed the decision of the delegate. The Tribunal referred to country information that indicated that militant activity in Punjab had largely ceased by 1998. The Tribunal found that, in light of that evidence, it was implausible that the appellant was involved in the alleged incidents. The Tribunal accepted that the appellant had, on at least one occasion, been in police custody but it did not find that this had been in connection with alleged militant activity or any other Convention reason. The Tribunal found it implausible that, if the appellant had been in custody in connection with the serious charges named in the warrant, he would have been released twice upon the payment of a bribe. 6 The Tribunal also found that the purported warrant was a fabrication. It noted that the warrant was purportedly issued nearly two years after the appellant had left India, and it saw "no plausible reason why it might be issued such a long period after any events that might have given rise to its being issued. " The Tribunal also found that "the statements by the village headman, the applicant's father, and the applicant's lawyer, referring to the warrant have been produced either to strengthen the perception of the Tribunal that the warrant is valid, or because they have been duped into believing that the warrant is valid". The Tribunal added that should the appellant "still feel it unsafe for him to return to the Punjab" he could return to Uttar Pradesh, alternatively, to another Sikh community in India. It was not satisfied that any minimal involvement on his part since coming to Australia in a particular organisation would come to the authorities' attention and, if it did, would occasion him any difficulties upon his return to India. 7 On 17 September 2001, the appellant joined the Muin and Lie proceedings in the High Court: see: see Muin v Refugee Review Tribunal ; Lie v Refugee Review Tribunal in [2002] HCA 30 ; (2002) 190 ALR 601. Ultimately, his application was remitted to the Federal Court and was refused on 30 April 2004: see S1775 of 2003 v Refugee Review Tribunal [2004] FCA 872 per Emmett J. As the first respondent has not sought to rely on those proceedings as the basis of any estoppel argument, it is unnecessary to discuss them further. 8 On 24 May 2004, the appellant filed an application for judicial review of the Tribunal's decision, which was heard in the Federal Magistrates Court. In his reasons for judgment, his Honour noted that the appellant had raised two issues in correspondence with the first respondent: first, he asserted that the date of his eye operation was 1998 rather than 1996 and, secondly, that his business activity was 1997 rather than 1995. His Honour held that the application for review did not disclose any basis upon which the Court could conclude that there had been any jurisdictional error on the Tribunal's part. He held further that the appellant's claims were no more than "an attempt to re-agitate facts or correct the factual material". His Honour noted that the Tribunal had spoken with the appellant's doctor by telephone and that the doctor's evidence was specific on the point and concluded that "the issues now sought to be reagitated by [him] were properly before the [Tribunal]", which made "findings of fact reasonably open to it". In particular, his Honour found that the Tribunal's decision involved "a clear finding of credibility adverse to" the appellant, and those credibility findings were within the domain of the Tribunal. 9 The appellant appealed from the Federal Magistrate's judgment on 17 June 2005 upon the ground that his Honour erred in finding that the Tribunal's decision was not affected by jurisdictional error. The appellant has given no particulars of this ground of appeal and did not file written submissions prior to the hearing. At the hearing this morning, the appellant submitted that the Tribunal had mistaken the date when he started his bus driving and the date of his eye operation. He further submitted that the Tribunal was wrong to rely on any supposed discrepancy regarding these dates and that he had not been aware that the Tribunal would so rely. 10 It is plain from a reading of the Tribunal's reasons that it placed no reliance on the date when he started his bus driving business. The Tribunal relied on the fact that the incident that gave rise to the appellant's protection visa application occurred in 1998, which the appellant does not dispute. It was open to the Tribunal, on the evidence before it, to make the findings it did concerning the appellant's eye condition and medical treatment. The appellant did not dispute that he had authorised the Tribunal to speak to his doctor and that he had been invited by the Tribunal to comment on the doctor's evidence. It is clear from the reasons of the Tribunal and the Federal Magistrate that the submissions he made to the Tribunal concerning the discrepancy in dates were the same submissions he made to the Federal Magistrate and to me. The Tribunal considered these submissions. The authorities establish that credit issues and findings of fact are generally matters for the Tribunal alone: see NACV v Minister for Immigration and Multicultural Affairs (2002) FCA 411 at [2] ; appeal dismissed in [2002] FCAFC 250 ; also W148/00A v Minister for Immigration and Multicultural Affairs [2001] FCA 679 at [64] . The Tribunal is not obliged to explain its thought processes to an applicant before making a decision. There is no discernible error in his Honour's judgment below. 11 The first respondent sought the costs of this appeal. The appellant submitted that he was not working and would be unable to pay such costs. The authorities establish that this is not a sufficient reason to depart from the ordinary rule: MZXEF v Minister for Immigration and Multicultural Affairs [2006] FCA 709. Accordingly, I would dismiss the appeal, with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | no basis for jurisdictional error raised migration |
2 The respondent is an official of the Construction, Forestry, Mining and Energy Union (CFMEU) which is an organisation which is registered under the Act. He was, at the relevant time, the holder of a permit issued by a Registrar under the Act pursuant to s 285A of the Act. A permit which is issued under s 285A of the Act permits the holder to enter any premises where employees work who are members of the organisation of which the person is an officer or employee for the purpose of investigating a suspected breach of the Act or an award, an order of the Commission or a certified agreement: s 285B(2). 3 It also permits the holder to enter any premises in which work is being carried out on to which an award applies that is binding on the organisation of which the person holding the permit is an officer or employee and employees who are members or eligible to become members of that organisation work on the premises, for the purposes of holding discussions with any of those employees who wish to participate in those discussions: s 285C. 6 Section 285E(1) is a penalty provision for the purpose of s 285F. A person who contravenes a penalty provision does not commit an offence. However, this Court may make an order imposing a penalty on a person who contravenes a penalty provision: s 285F(2). 7 Section 285F provides that the penalty cannot be more than $10,000 for a body corporate or $2,000 in other cases. In this case, therefore, the maximum penalty that may be imposed is $2,000. 8 The respondent and the applicant addressed me as to penalty. Counsel indicated that the parties had agreed that the appropriate penalty would be somewhere in the range of $1,200 to $1,600, being 60% to 80% of the maximum penalty prescribed under the Act. 9 I was also advised that the parties had agreed that the applicant should have the costs of the proceeding but that they be limited to $2,000. 10 In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 at 290-291, Burchett and Kiefel JJ (with whom Carr J generally agreed) discussed the question of the Court's role on fixing the quantum of penalty in circumstances where the parties had indicated a range within which a civil penalty ought to be imposed. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. (iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed. (iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters. (v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so. (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range. Four of those are relevant to this proceeding. First, that the regulator's resources will be saved which would allow the regulator to detect other contraventions which would increase the deterrent aspect of the penalty. Secondly, the Court is not required to limit itself to considering whether the penalty is within the permissible range. The Court may wish to take that approach but the Court could address the appropriate range of penalty independently of the parties' proposed figure. Thirdly, the regulator should always justify any discounted penalty to which the regulator has agreed. Lastly, if the Court is of the opinion that the penalty is inappropriate, it may then be appropriate to allow the parties to withdraw their consent to the proposed orders and for the matter to proceed as a contested hearing. 12 After discussing a number of authorities at first instance, the Court concluded that there was nothing to warrant a departure from the principles which had been identified in NW Frozen Foods [1996] FCA 1134 ; 71 FCR 285. 13 It was appropriate, therefore, for the parties to agree upon a range and submit that range to this Court for its consideration. 14 In CFMEU v Cole and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, Branson J considered the circumstances which might be taken into account when assessing a penalty under s 298U of the Act. (b) Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act. (c) Where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct. (d) The consequences of the conduct found to be in contravention of Pt XA of the Act. (e) The need, in the circumstances, for the protection of industrial freedom of association. (f) The need, in the circumstances, for deterrence. 16 I do not think in the case of a contravention of s 285E rehabilitation plays any real part. I think punishment plays some part in the purpose for the imposition of a penalty, but I think it plays a lesser part than aspects of deterrence. In my opinion, the principal reason for the imposition of a penalty in relation to a contravention of s 285E of the Act is deterrence. The purpose of the civil penalty is to deter persons, who have been given a right to enter premises by virtue of ss 285B and 285C, from intentionally hindering or obstructing any other employer or employee. In speaking of deterrence, I am speaking of both general and personal deterrence. The purpose of the penalty is to deter the particular person from further contraventions of the section and to deter other like minded persons who might otherwise commit a contravention of s 285E. 17 The Act also seeks to deter persons who hold a permit from contravening s 285E(1) by empowering the Registrar to revoke the contravenor's permit if the Registrar is satisfied that a contravention has occurred: s 285A(3). In considering the appropriate penalty I have taken into account that the finding of a contravention may put the respondent's permit at risk. It was contended by the respondent's counsel that if the respondent lost his permit the respondent may either lose or his job or be forced to take leave during the time when the respondent was without a permit. It was put that the permit was an essential aspect of his employment. However, the respondent's counsel was not able to say that either of those consequences would follow if the respondent were to lose his permit or have it suspended for any length of time. The risk of those events occurring ought to be taken into account but, in the circumstances of this case and in the absence of any evidence from the employer, I do not put great weight upon those risks. 18 I do not intend to recite the facts which I have found and which are contained in my reasons in Standen v Feehan [2008] FCA 1009. Those facts speak for themselves. The more serious the contravention, the higher the penalty. 20 For the reasons which I have given, I consider that the conduct was serious. The conduct was premeditated and was designed to hinder the contractor and the subcontractor in the carrying out of their work on the day in question. The conduct continued over a relatively long period. The conduct had the consequence that Mr Zito and his employees had to work late into the evening to complete their concreting. 21 I take into account the respondent's personal circumstances. The respondent has been an official of the CFMEU since about 1996. He acted as an official in New South Wales for a period of time from September 1997 to 1998. He has otherwise worked as an official in South Australia. He has not previously been the subject of an order for a civil penalty. 22 He earns approximately $60,000 per annum and has the use of a motor vehicle provided by his employer. He is obliged to support a child of a previous relationship. I was told that he would have to pay any civil penalty himself. He would need, I was told, because of a current liability to the Australian Taxation Office, three months in which to pay the civil penalty. 23 The respondent's counsel addressed the seriousness of the contravention. He asked me to assume that the respondent's conduct was not so much flagrant and determined, but conduct in the nature of someone who has tried to step back and be as close to the line as possible without offending it. He accepted that on my findings the conduct was deliberately provocative which had been engendered by an element of contest and bravado. 24 Notwithstanding that I think the conduct was premeditated, deliberately provocative and serious, I think the range is appropriate having regard to the maximum civil penalty which might be imposed. 25 I fix a civil penalty of $1,300. It would be appropriate to order that the penalty be paid to the Consolidated Revenue Fund: s 356. The applicant did not oppose the respondent having three months to pay any penalty. There will be an order that the respondent pay the sum of $1,300 by way of civil penalty to the Consolidated Revenue Fund within three months. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | decision as to penalty for contravention of s 285e of workplace relations act 1996 (cth) conduct was premeditated, deliberately provocative and serious principles in fixing monetary quantum in circumstances where parties have agreed on an acceptable range of penalty circumstances to be taken into account in determining penalty purposes of imposing penalty penalty fixed and imposed. industrial law |
2 The Notice is the fourth such notice to be issued to Genovese at BGC's request based on a judgment obtained by BGC against Genovese in the Local Court of Western Australia on 17 October 2003. Judgment was entered by consent for a sum of $10,000 and costs to be taxed. Those costs were taxed and certified on 23 December 2003 in a sum of $11,432.94. 3 Prior to 17 October 2003 other orders for costs had been made in the proceeding in BGC's favour namely, on 28 February 2003, 15 April 2003 and 9 June 2003. On 22 May 2003 costs were taxed pursuant to the orders made on 28 February and 15 April 2003 and certified by the Taxing Officer in a sum of $2,010.42. That sum was duly paid by Genovese. In respect of the order for costs made on 9 June 2003 taxed costs were certified on 29 October 2003 in a sum of $4,979.33. 4 The first bankruptcy notice, issued on 12 March 2004, was set aside by consent. The second and third bankruptcy notices were issued on 21 April 2004 and 8 September 2004 respectively. BGC elected not to proceed on the second notice and the third notice was set aside by an order made by a judge of this Court (Lander J) on 11 March 2005 on appeal from a judgment of the Federal Magistrates Court. The reasons for decision of his Honour set out the history of the matter in detail. (See: Genovese v BGC Construction Pty Ltd (2005) 215 ALR 440). 5 An unresolved issue that arose out of the hearing in the Federal Magistrates Court and not dealt with in the appeal is whether a further sum of $3,000 was paid to BGC by Genovese on 30 April 2004 in reduction of the judgment entered on 17 October 2003 being a sum not accounted for in the Notice. (See: Genovese v Homestyle Pty Ltd [2004] FMCA 673 at [33] ). 6 On 25 July 2005 Genovese filed an application in the Federal Magistrates Court seeking an order that the Notice be set aside. On 21 September 2005 the Federal Magistrates Court ordered that the application be transferred to this Court by reason of the complexity of the issues raised. 7 Upon transfer of the matter the Court determined pursuant to Order 80 of the Rules of the Federal Court that it was appropriate that the Registrar be directed to obtain pro bono legal representation for Genovese in order that the Court may be assisted by submissions from counsel for each party. Up to that point Genovese had been unrepresented. 8 As far as the instant matter is concerned s 40(1)(g) of the Act provides that a debtor commits an act of bankruptcy if a creditor who has obtained against the debtor a final judgment or final order, the execution of which has not been stayed, has served on the debtor a bankruptcy notice under the Act requiring the debtor to pay the judgment debt and the debtor does not, within the time specified in the notice, comply with the requirements of the notice. 9 Section 41(1) states that an Official Receiver may issue a bankruptcy notice on the application of a creditor who has obtained against a debtor a final judgment or final order (or two or more final judgments or final orders) in an amount of at least $2,000. 10 Section 41(2) stipulates that the notice must be in the form prescribed by the Bankruptcy Regulations 1966 (Cth) ("the Regulations"). Regulation 4.02(1) provides that Form 1 in Schedule 1 of the Regulations is the prescribed form. Regulation 4.02(2) also states that a bankruptcy notice must follow Form 1 in respect of its format --- "for example, bold or italic typeface, underlining and notes". 11 Item 1 of Form 1 gives notice to a debtor that the creditor claims that the debtor owes the creditor a debt in a specified amount arising under a judgment and states that details of the amount of the debt are shown in the Schedule to the Form. The Schedule provides for details of the amount owing to the creditor by the debtor under judgments or orders to be inserted. Item 2 of Form 1 states that "a copy" of the judgments or orders "relied upon" by the creditor is attached to the notice. Failure to attach a copy of a judgment or order relied upon is a failure to comply with s 41(2) and represents a fundamental defect in the notice and invalidates it. (See: The Australian Steel Company (Operations) Pty Ltd v Lewis [2000] FCA 1915 ; (2000) 109 FCR 33; Commonwealth Bank v Horvath (Junior) (1999) 161 ALR 441). . . . 15 Plainly the amount set out in Item 1 of the Notice and in Item 1 of the Schedule to the Notice was a composite sum based on several judgments or orders. Whether pursuant to Item 2 of the Notice BGC had to attach a copy of the costs orders made on 28 February, 15 April and 9 June 2003 is unnecessary to decide. At least pursuant to Item 2 and Note 1 of the Schedule to the Notice the certificates of the taxed costs made pursuant to those orders had to be attached. 16 Although unnecessary to decide in the instant case it may be thought that the words of Item 2 and of Note 1 of the Schedule to the Notice make it clear that costs not fixed but ordered to be paid as part of a judgment or order must be set out in Item 2 of the Schedule and a certificate of those taxed costs attached. I note that in Stec v Orfanos [1999] FCA 457 at [17] it is suggested that it is not necessary to attach a certificate of taxed costs where a judgment recited in Item 1 of the Schedule provides for costs to be taxed. But such a conclusion would not be consistent with the words used in Item 2 of the Schedule or Note 1 and, furthermore, would fail to meet the evident purpose of a bankruptcy notice prescribed by the Act and Regulations, namely, to give a debtor notice of how the amount set out in the Notice has been calculated as the amount owing. 17 Item 2 of the Schedule is not restricted to legal costs not included in the judgments or orders referred to in Item 1. It expressly applies to legal costs ordered to be paid where a specific amount has not been included in a judgment or order referred to in Item 1. The words of Note 1 confirm that construction. Therefore, if costs are ordered but not fixed in a judgment or order set out in Item 1 the amount of those costs as subsequently taxed or assessed must be set out in Item 2 and a certificate of the taxed or assessed costs must be attached. 18 On the reasoning applied in Stec there would be no function for Note 1 to the Schedule to perform. The amounts due under more than one final judgment or order, including a costs order, would be aggregated in Item 1 of the Schedule and pursuant to the reasoning in Stec no amount or certificate of costs taxed pursuant to a costs order could be said to be relevant to Item 2 and Note 1 of the Schedule. 19 In any event to comply with the requirements of the Act it was necessary for BGC to deliver to the Official Receiver for attachment to the Notice a copy of the judgment entered in the Local Court on 17 October 2003 and a copy of any other order for the payment of costs that BGC sought to have included in the Notice as the debt claimed to be due. (See: Commonwealth Bank v Horvath ). 20 The document dated 6 April 2005 attached to the Notice purported to be a certified copy of the judgment entered on 17 October 2003. It misstated the amount of that judgment debt by aggregating with that sum amounts of taxed costs that became payable under other orders. 21 No copies of those other orders, or certificates of the costs taxed pursuant thereto, were attached to the Notice. 22 It may be assumed that pursuant to O 23 r 6(2) of the Local Court Rules 1961 (WA), BGC prepared a praecipe of the certified judgment sought to be attached to the Notice and was responsible for the misstatement in the Notice of the amount of the judgment debt entered on 17 October 2003. 23 In light of the foregoing BGC conceded that the Notice must be set aside. It contended, however, that no costs order should be made. Counsel for Genovese submitted that costs should follow the event. 24 The grounds of BGC's argument on costs were that BGC had incurred unnecessary expense in preparing a response to arguments foreshadowed by Genovese as an unrepresented applicant but abandoned by counsel for Genovese. Further it was submitted that the ground raised by counsel for Genovese only materialised "at the eleventh hour". 25 Counsel for Genovese submitted that the Bankruptcy Notice was defective on its face and that the usual order for costs should be made. 26 I am satisfied that the discretion available to the Court under s 43 of the Federal Court Act 1976 (Cth) should be exercised by an order that BGC pay the costs of Genovese. BGC had four opportunities to present a bankruptcy notice for issue that complied with requirements of the Act and Regulations and failed to do so. 27 The defect in the Notice should have been apparent to BGC at the time the Notice was presented to the Official Receiver for endorsement and issue. Whilst it was not until Genovese was represented by counsel that the ground on which the challenge to the validity of the Notice was able to be articulated on behalf of Genovese, BGC had been on notice since the filing of the application that the validity of the Notice was in issue and it could have ascertained by appropriate examination of the primary documents that the Notice was defective. 28 By reason of the amendments made to the Act and Regulations in respect of bankruptcy notices considered and explained in Australian Steel, responsibility for the accuracy of a bankruptcy notice issued by the Official Receiver now lies with the creditor seeking the issue of the notice and not with a Registrar in Bankruptcy or an Official Receiver. It follows that a creditor requesting the issue of such a notice must exercise due care to ensure that there has been compliance with the Act and Regulations. (See: Australian Steel at [53], [63]). 29 The Notice will be set aside and BGC ordered to pay the costs of the application. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. | bankruptcy notice application for notice to be set aside failure by creditor to attach to notice a copy of judgment or order notice set aside. bankruptcy |
I came to fix today for the hearing of the winding up application as a result of earlier interlocutory proceedings which are the subject of an earlier interlocutory judgment which I delivered. I shall not repeat what is there stated. Since then, and as revealed by an affidavit of Justin David Ericson, filed and read today by leave, very considerable efforts indeed have been made to give order to the affairs, including the financial affairs, of the corporation. Mr Ericson is a principal of Millar Teitzel Accountants and also a director of the Corporation. He came to hold that office as a result of deliberate decisions taken responsibly by the Corporation to put its affairs in order following what one might term the "wake-up call" administered properly by the Registrar in respect of its governance. That affidavit reveals that, following the decision by the Mt Isa Council not to grant rates exemption, a successful application has been made to the National Australia Bank for the provision of sufficient finance to enable an outstanding rates bill to be settled. The affidavit also discloses that corporate responsibilities for the payment of moneys to the Commissioner of Taxation on behalf of the Commonwealth and in respect of superannuation are to be met. There will, though, be some need for a short passage of time to put particular arrangements into effect to enable outstanding obligations to be met by the provision of funds which are arranged. What the parties propose is a regime in terms of draft orders submitted, whereby the Corporation will be given time to file an affidavit which evidences the formal contractual relations having been entered into as between the Corporation and the National Australia Bank as presently apprehended. The time proposed does not seem to me to be unreasonably long, particularly having regard to the present time of the year. Subject to the filing of the affidavit by 15 January 2010, it is then proposed that orders in the form of an annexure to the order proposed be signed by each of the parties and then lodged with the Court for the making of a further order by consent about a week following the date proposed for the filing of the affidavit. Those orders provide for the Corporation to give an undertaking in respect of the notification to the Registrar of various key events in respect of the governance and financial performance of the Corporation for a period which will end on 31 December 2011. Thereafter, of course, there will remain statutory reporting responsibilities for the Corporation. In effect, what is proposed is what one might describe as a probation period, or a period of close supervision. It is significant that the Corporation volunteers the subjection of itself to that regime. It is also significant that the Registrar, who has a responsibility in relation to the wider public interest, conceives that, as a matter of considered value judgment, the course proposed is in the public interest. I recall particularly that the affairs of this corporation involve the very worthy end of provision of low cost housing to members of the Aboriginal and Torres Strait Islander community in Mt Isa. In terms of s 459R of the Corporations Act 2001 (Cth), I have a discretion to exercise. That discretion is one which may only be exercised if I am satisfied that special circumstances justify the extension of the period ordinarily prescribed by that section for the determination of a winding up application and further if the order is made within that ordinary period or as last extended. This particular application is made within the ordinary period. I am satisfied, having regard to the matters to which I have averted and which are more particularly detailed in Mr Ericson's affidavit, that special circumstances do indeed exist for the making of the orders proposed, which include, particularly, provision for the extension of the period within which the application for winding up must be determined until 9 July 2010. There will therefore be orders in terms of the draft as proposed. I commend the Corporation and those advising it and particularly also the Registrar and those advising the Registrar for the very particular and responsible course which has been adopted in this case. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Each party is to bear its own costs, save for the costs order made in this proceeding on 20 October 3009 that the Defendant pay the Plaintiff's costs thrown away by the adjournment, to be taxed. | winding up aboriginal and torres strait islander corporation application to wind up corporation on ground of insolvency application to extend period for the determination of the winding up application acquisition by corporation of finance to offset debts and payments due in arrears undertakings given by corporation to registrar of aboriginal and torres strait islander corporations in respect of governance and financial performance of the corporation public interest to undertake this course time for determination of application to wind up respondent corporation extended corporations |
The meeting convened by the directors is to be held on 27 May 2009. The meeting convened by the defendants is to be held on 28 May 2009. The two meetings are to consider the same resolutions, namely, resolutions for the removal of the present directors of the Company and the election of directors in their place. Both parties agree that it is absurd and wasteful for both meetings to proceed. Unfortunately the parties have not been able to agree on which is to proceed. NSX contends that the directors validly convened the meeting for 27 May and that the defendants' meeting has been invalidly convened. The defendants, on the other hand, contend that they validly convened the meeting for 28 May and that the meeting convened by the directors has been invalidly convened or at least should not be allowed to proceed. The meeting is to be held not later than 2 months after the request is given to the company. It is not disputed that the request satisfied the terms of s 249D(1). On 30 March 2009, NSX announced to the Australian Stock Exchange (the ASX) that it had received the request and that the directors intended to convene a general meeting in accordance with the Act, the date of which would be announced once that date was determined. The date 27 May 2009 referred to in para (a) was the last day of the two-month period referred to in the second sentence of s 249D(5). On the same day, Friday 17 April 2009, NSX announced to the ASX that it had determined that an extraordinary general meeting in response to the request of which NSX had advised the ASX on 30 March 2009, was to be held as described in [6](a) above. The announcement also stated that a notice of the meeting and proxy form would be mailed to shareholders in due course. On Saturday 18 April 2009, the defendants, who, it was not disputed, were members of NSX with more than 50% of the votes of all of the nine members who had made the request under s 249D, posted notices to NSX's members convening a general meeting of members to be held on 28 May 2009. The only ground of invalidity of the defendants' notice that NSX raised was that the power given by 249E(1) had not been enlivened because the directors had themselves called a meeting in conformity with the obligation imposed on them by s 249D(5). Was the power given to members by s 249E(1) to call and arrange a general meeting enlivened? In the light of the answers given to questions (1) and (2), what orders are to be made? 1. DID THE DIRECTORS "CALL" THE MEETING FOR THE PURPOSES OF S 249D(5) BY REASON OF WHAT THEY DID ON FRIDAY 17 APRIL 2009? Consistently with this provision, s 249E(1) provides that certain members may "call" and "arrange to hold" a general meeting if the directors "do not do so within 21 days after the request is given to the company". According to its plain meaning, the expression "do not do so" means "do not call and arrange to hold a general meeting". Section 249D(5) does not oblige the directors both to call and to arrange to hold the meeting within the 21 day period: it obliges them only to call it within that period. It is common ground that the directors did not on 17 April 2009 "call and arrange to hold" a general meeting of members because notices of the meeting were not sent out on that date. NSX contends that the sending out of notices was a part of "arranging" or "arranging to hold", while the defendants contend that it constituted the "calling" or a part of the "calling" of the meeting. NSX contends that the condition precedent to the enlivening of the power of the shareholders under s 249E(1) found in the words "if the directors do not do so" is only the directors' failure to call a meeting within the 21 day period. On this construction, which is not the plain meaning of "do not do so", a calling by the directors of a meeting within the 21 day period will, without more, prevent the shareholders' power under s 249E(1) from being enlivened. I need not decide the correct meaning of "do not do so" in s 249E(1) because in my opinion the directors did not even call the meeting within the 21 day period. In passing, I note that in my view in determining for the purposes of ss 249D and 249E what "the directors" did, there is to be included anything that they did through the Company Secretary acting as their agent. Any suggestion that it is only what they did personally that is to be taken into account must be rejected. Accordingly, for present purposes, the directors notified the ASX on 17 April 2009 and the directors sent out the notices of meeting on 27 April 2009. It is not to the point that it can be said, for the different purpose of distinguishing between what the directors of a company and the company's secretary respectively did, that the directors "called" a meeting and the company secretary then sent out the notices of it: cf Vawdon v South Sydney Junior R.L. Club [1975-1976] CLC p40-248 at 28,499. The making of the distinction in such terms for that purpose does not, to my mind, indicate an underlying general assumption that notification does not form part of the calling of a meeting. " The transitive verb "to call" is defined in the Macquarie Dictionary , relevantly, as "to convoke or convene, as a meeting or assembly". The New Lexicon Webster's Dictionary of the English Language defines the transitive verb "to call" as "to convoke, to call a meeting" . In accordance with these dictionary definitions and my own understanding of the English language, the idea of communication or notification to those who are to meet is part of the idea of calling a meeting. In saying this, I need not enter upon the question whether the sending of notice is enough or whether receipt of it is also necessary to the concept of calling a meeting; in the present case neither happened on or by 17 April 2009 and so the directors did not by that date call a meeting. The time when a notice of a meeting is taken to be "given" (see s 249J(4)) is irrelevant to the present question. Ballentine's Law Dictionary (3 rd Ed, 1969) defines the composite expression "called meeting" as "a special meeting of an organised group held upon notice". The words "held upon notice" in this definition are in accordance with the view that I have suggested above. In the same work, the word "call" is defined relevantly as "a notice of a meeting to be held by the stockholders or board of directors of a corporation. " It is also noteworthy that Ballentine's Law Dictionary defines "convene" as meaning "[t]o assemble; to meet as a body; to call a meeting...". The suggestion is that "call" and "convene" are synonyms, as I think they are. In Black's Law Dictionary (8 th ed, 2004), the verb "call" is defined as "to summon", and the expression "call of a meeting" as " Parliamentary law . Formal written notice of a meeting's time and place, sometimes stating its business, sent to each member in advance. " The overwhelming effect of the general dictionaries and law dictionaries referred to above is that the sending of notice is an essential element of the calling of a meeting. I will refer to this change below, but, first, I note that the legislative history of the provisions shows that the terms "call" and "convene" have been used interchangeably. Section 94 of the Companies Act 1936 (NSW) (1936 Act) provided in subs (1) that the directors of a company must "convene" a general meeting upon requisition, and in subs (3) that if they did not within 21 days from the deposit of the requisition proceed duly to convene the meeting, the requisitionists or a certain proportion of them might themselves convene a meeting. The immediately following section, s 95, set out certain provisions which were to have effect in so far as the articles of the company did not make other provision in that behalf. Relevant among these were those relating to the "calling" of meetings. For example, a meeting other than one for the passing of a special resolution could be "called" by seven days' notice in writing (subpara (1)(a)). Two or more members holding not less than one tenth of the issued share capital were empowered to "call" a meeting (subpara (1)(c)). Subsection (2) provided for the situation where it was for any reason "impracticable to call a meeting of a company in any manner in which meetings of that company may be called". It is clear that the references in s 95 were to the calling of a meeting by notice. A later reference in subs (2) to the manner by which a court may order a meeting to be "called, held and conducted" also supports the construction that "call" imported the giving of notice: otherwise the expression would leave the giving of notice entirely out of account because the terms "held" and "conducted" plainly do not include the giving of notice. Sections 137 and 138 of the Uniform Companies Acts and Ordinances of 1961/1962 (1961 Act) were comparable to ss 94 and 95 of the 1936 Act. Again, the verb "convene" is used in s 137, while the verb "call" is used in s 138. The comparable sections in the Companies Code (the Code) were ss 241 and 242. However, in s 242 the verb "convene" was used instead of "call". There was no other relevant change. It was made clear in s 138(2) of the 1961 Act and s 242(2) of the Code, that the call (of the 1961 Act) and the convening (of the Code) were both to be by notice in writing. In sum, the change from "call" to "convene" was not intended to mark any change in meaning. The comparable provisions in the Corporations Law (the Law) were ss 246 and 247, in both of which, the word "convene" was retained from the Code . However, the Company Law Review Act 1998 (Cth) amended the Law. As from 1 July 1998, ss 246 and 247 were repealed and the subject matter of s 246 was dealt with in ss 249D and 249E, while the subject matter of s 247 was dealt with in s 249F. In all three new sections (and in other sections within Div 2 of Part 2G.2 of the Law) there was a change from "convene" to "call". As well, as noted earlier there was the introduction of the concept of "arranging to hold". A new Div 3 (ss 249H --- 249M) was introduced dealing with "[h]ow to call meetings of members. " The new ss 249D, 249E and 249F and Div 3 were retained in the Act. I will discuss below the textual aspects of Div 2 of Part 2G.2, but it suffices to say at present that the legislative history referred to above suggests that "call" and "convene" have been used interchangeably and synonymously. In its written submissions it contends that on the facts of this case, the directors' decision to hold the meeting, their fixing of the time, date and place, and the announcement to the ASX "sufficiently to inform the requisitioners" were sufficient. In oral submissions, the third and fourth elements become instructing the Company Secretary to inform the ASX and to take the necessary steps to inform the shareholders. What is missing is a submission by reference to principle as to the essential elements of the calling of a meeting. It will be noted that there was no special notice given to the requisitionists here. The evidence showed only that Mr Seymour, the second defendant, happened to check the ASX announcements platform at around 7.00 pm on 17 April 2009 and noted that NSX had advised the market that its directors had decided upon a date for the general meeting and would send out a notice of the meeting in due course. Mr Seymour then advised Mr Pritchard, the first defendant, of what he had read. I do not accept that even if the directors, through the Company secretary, had given written notice of the meeting to each of the requisitionists on 17 April 2009, that would have constituted a calling of the meeting --- a fortiori, the announcement to the ASX, read by some of the requisitionists, did not do so. As indicated earlier, in my view the directors are to be taken as having done that which the Company Secretary did pursuant to their instructions. Accordingly, on 17 April 2009 the directors notified the ASX. However, whether NSX submits that notification to the ASX is or is not an essential element of "calling" is unclear. There are difficulties either way, as reference to various provisions in Part 2G.2 reveals. Division 2 within Part 2G.2 is headed "[w]ho may call meetings of members". The first section within Div 2, s 249C, provides that "[a] director may call a meeting of the company's members". The next section, s 249CA, applies only to a listed company and, empowers a director to "call" a meeting of the company's members notwithstanding anything in the company's constitution. In the latter case but not the former, notification to a stock exchange would be available. It seems that according to NSX's argument, in the case of s 249C a director would "call" a meeting simply by deciding to do so. It is unclear what NSX's argument would require in the case of s 249CA --- perhaps deciding alone would be enough or deciding followed by notification to a stock exchange would be required. But why would something over and above deciding be required in the one case but not in the other? We are not left to speculate. Division 3 of Part 2G.2, headed "[h]ow to call meetings of members", makes it clear that calling a meeting is by notice to members. This is the case when a director calls a meeting under s 249C or under s 249CA; when the directors call a meeting pursuant to requisition under s 249D; when requisitionists call a meeting of members under s 249E; when members call a meeting under s 249F; and when a meeting is to be called pursuant to Court order under s 249G. NSX's argument seems to be that the addition of the words "and arrange to hold" has the effect of denuding "call" of any element of notification, locating that element in "arrange to hold" and leaving "call" to encompass only the taking of the decision and (perhaps) giving of instructions for its implementation and (perhaps) notification to a stock exchange where that is relevant. Such a construction is not, however, compelled by the presence of the words "and arrange to hold". There is work for those words to do in any event. If, as I think, notification to members is an essential aspect of calling a meeting, other things remain covered by the expression "arrange to hold". Indeed, perhaps those words were added in order to make it clear that the directors' obligation under s 249D(5) is not discharged by the mere taking of the decision and sending out of the notices of meeting. Depending on the size of the company, there could be many other things to be done in order that the request for the meeting is truly met and not frustrated, including, the arranging of a venue, arranging for the staffing of the meeting, and (perhaps) printing of meeting papers. It suffices to say that the addition of the words "and arrange to hold" do not, in my view, displace the construction of "call" as including notification to members. Under s 439A an administrator of a company under administration must "convene" a meeting of the company's creditors by giving notice to creditors. Similarly, s 445F provides for the convening of a meeting of a company's creditors by the giving of notice by an administrator of a deed of company arrangement. Sections 496, 497 and 574 provide for a liquidator to convene meetings of creditors by the giving of notice. Yet the notion of "calling" a meeting also by the giving of notice is found in ss 283EA (expressly) and 283EB (by implication) in the context of the calling of meetings by a borrower and trustee (respectively) in relation to debentures. In large part they are answered in what I have said above. I will refer to those four arguments only briefly, and need not refer to the detail of them or to the "supporting" sources to which counsel referred. First, counsel points to the historical background to ss 249D and 249E, and, in particular, to the change in the Law from the concept of "convene" to the twin concepts of "call" and "arrange to hold" and the retention of those twin concepts in the Act. I have discussed the historical background including that change above. It is true that the terms "convene" and "arrange to hold" could have been used in the Act instead of "call" and "arrange to hold" but perhaps the drafter thought it better to emphasise the change. Second, counsel for NSX refers to what he characterises as "the particular statutory context of the duty on directors contained within s 249D". He referred to a particular situation (the proposed removal of a director, as in the present case) in which the construction advanced by the defendants (and adopted by me) might lead to a shortness of time available to the directors. I have some difficulty in appreciating the force of the argument or the shortness of time to which it referred. If the directors act without unreasonable delay after receiving the requisition, there should be no difficulty. There is no implication to be found in s 249D(5) that the directors are entitled to stand by for twenty days and to begin acting on the twenty-first day. Third, counsel refers to a division of responsibilities as between directors and the company itself and the purposes of the Parliament manifest in ss 249CA and 249D and Div 3 of Ch 2G of the Act. He seems to attribute (wrongly in my view) to the defendants a construction that the directors must personally take steps to notify members. Fourth, counsel refers to the distinction between "calling" a meeting on the one hand and "arranging" it on the other, a matter to which I have referred above. Although framed skilfully, none of counsel's submissions are, to my mind, persuasive. 2. WAS THE POWER GIVEN TO MEMBERS BY S 249E(1) TO CALL AND ARRANGE A GENERAL MEETING ENLIVENED? It follows that the power conferred by s 249E(1) was enlivened and the defendants' notice given on Saturday 18 April 2009 validly called the meeting to be held on 28 May 2009. 3. IN THE LIGHT OF THE ANSWERS GIVEN TO (1) AND (2), WHAT ORDERS ARE TO BE MADE? Counsel relies on Re Ariadne Australia Ltd [1991] 2 Qd R 377 (Ariadne). I accept that following 17 April 2009 it remained within the power of the directors to convene a general meeting of NSX on 27 May 2009. (As noted earlier, NSX distinguishes between "call" and "convene", submitting that the directors "called" the meeting on 17 April 2009. ) In any event, since I have rejected the supposed distinction between "call" and "convene", in my view the directors did not convene the meeting prior to 27 April 2009. Ariadne is distinguishable. In that case, decided on s 241 of the Companies (Queensland) Code , a shareholder, having requisitioned a meeting that the directors had failed to convene within the 21 day period, sought an injunction restraining them from convening the meeting following the expiry of that period. The application was dismissed. However, in that case the requisitionist had not exercised the default power to convene the meeting himself. Cooper J said (at 380) that he did not construe s 241 as prohibiting the directors "from discharging, albeit belatedly the duty cast upon them by s.241(1), and a duty which is ongoing in terms of Article 40 of the Articles of Association". Article 40 is not set out in the reported judgment. I assume that it gave the directors a general power to convene meetings as cl 10.2 of NSX's constitution does. It is doubtful that his Honour was saying that s 241(1) directly imposed an obligation on the directors that continued to operate after expiry of the 21 day period. It may be, however, that by reason of their general duties as directors they were obliged in the circumstances of that case to convene the meeting notwithstanding the expiry of that period. In the present case, once the defendants issued their own notice of meeting on 18 April 2009, the directors ceased to be under a duty of any kind themselves to convene a competing meeting, notwithstanding their undoubted power to do so under cl 10.2. It has not been suggested that there was any good reason for the directors to exercise their cl 10.2 power to call, or complete the calling of, a meeting by sending out the notice of meeting on 27 April 2009. After all, by Monday 20 April 2009 they knew that the defendants had themselves called a meeting to consider the resolutions identical to those which the directors were proposing to have considered at any meeting to be called by them. In the result, it is not shown that the Court should make any order having the effect of facilitating the holding of the meeting on 27 May 2009. The fourth defendant submitted that the directors have acted oppressively toward the members generally, and the defendants in particular, and that an order should be made under s 233(1)(c) of the Act to the effect that the meeting fixed for 27 May 2009 shall not proceed. So far as the evidence reveals, the directors acted in good faith, believing on legal advice that they had "called" a general meeting on 17 April 2009. I have no hesitation in rejecting the suggestion of oppression. I will allow the parties an opportunity to consider these reasons and the question whether an order against the defendants is required. The application should be dismissed. [On 22 May 2009 when the order of dismissal was made, counsel for NSX sought an opportunity to make submissions on costs, and directions were made to that end. Subsequently by consent the Court ordered that the plaintiff pay the defendants' costs. | request by members under s 249d(1) of corporations act 2001 (cth) (the act) that directors "call" meeting of members to remove existing directors and to appoint replacement directors whether directors "called" meeting within the 21-day period referred to in s 249d(5) of the act what constitutes "calling" of meeting whether sufficient that directors resolved that meeting be held at specified time on specific date at specified place, notified australian stock exchange, and resolved that notice of meeting be settled and sent to members. held : no. at least actual sending of notices to members was essential to calling of meeting. "to call" meaning of "to call" in relation to company meeting requisitioned under s 249d of the corporations act 2001 (cth). corporations words and phrases |
Malcolm Turnbull, Minister for the Environment and Water Resources [2007] FCA 1178 (TWS proceeding). These reasons for judgment are to be read together with the reasons for judgment published in the TWS proceeding. Terms defined in the reasons for judgment in the TWS proceeding have the same meaning in these reasons for judgment. 2 The grounds of review relied on in this proceeding overlap substantially with the grounds relied on in the TWS proceeding. There is a difference between the grounds in the applications dealing with the allegation that the Minister took into account Gunns' commercial imperatives in making the 2007 assessment approach decision. 3 Ground nine of the grounds of review in this proceeding states that the 2007 assessment approach decision is invalid or is not authorised by the EPBC Act because the Minister took into account an irrelevant consideration. Ground 10 in the TWS proceeding alleges that the 2007 assessment approach decision involved an improper exercise of power in that it was made for a purpose, or included a purpose, other than that for which the power was conferred. I rejected that submission in the TWS proceeding. 4 I also reject ground nine of IFT's third amended application. The Minister was obviously aware of Gunns' preferred timeline for a decision on approval. That preference mirrored the preference of the Tasmanian Government as set down in the Pulp Mill Assessment Act 2007 (Tas) which the Minister referred to at [21] of his reasons for the 2007 assessment approach decision. But the Minister's reasons for the 2007 assessment approach decision show that Gunns' and the Tasmanian Government's preferred timeline did not guide his decision on assessment approach. The Minister selected an assessment approach which "...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...". 5 The fact that officers of the Department and Gunns' representatives had meetings, the records of which note certain timelines, does not bind the Minister in the exercise of his choice of assessment approach under s 87 of the EPBC Act and did not form any part of his written reasons for the 2007 assessment approach decision. 6 I reject all other grounds of review raised in IFT's third amended application. Those grounds have been dealt with in the reasons for judgment in the TWS proceeding, but it is appropriate to add something on the procedural fairness ground. 7 IFT was incorporated on 9 October 2006 as a result of Gunns' proposal to build and operate a pulp mill at Bell Bay. IFT's members own, operate and/or are involved in various businesses and organisations, most of which are located in Launceston, Bell Bay and the Tamar Valley. Those businesses are in industries such as tourism, hospitality, food, agriculture, resources, public relations and training. 8 IFT appeared before the RPDC, including at the 22 February 2007 directions hearing. Before the demise of the RPDC, IFT had intended to obtain detailed expert reports on flora and fauna and social and economic issues including, but not confined to, the impact of the pulp mill on tourism. IFT also intended to seek legal, economic and other expert advice on the material that Gunns had submitted to the RPDC. IFT says that the 2007 assessment approach decision and the requirement to make comments within 20 business days of that decision, denied it the opportunity to undertake further investigations and to obtain detailed expert reports. 9 In the TWS proceeding, I held that s 131AA(7) of the EPBC Act is a complete statement of the Minister's obligation to provide procedural fairness in relation to his decision to approve, for the purposes of a controlling provision, the taking of an action and any conditions attaching to approval. If that is not correct and the obligation is wider, it is one that must be considered in the context of the EPBC Act and in the context of the facts and circumstances before the Minister (see SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592 at [26] ). 10 That the EPBC Act has provisions dealing with steps to be taken before a decision on approval is made suggests that the EPBC Act makes careful provision for when, and to what extent, comment from interested persons and/or the public is required. 11 Under s 74(3) of the EPBC Act, as soon as practicable after receiving a referral of a proposal to take an action, the Minister must cause to be published on the internet the referral and "an invitation for anyone to give the Minister comments within 10 business days" on whether the action is a controlled action. In making a controlled action decision under s 75, the Minister is required by s 75(1A) to consider the comments received in response to such an invitation, as long as they are received within the time specified. Under s 75(5), the Minister is obliged to make the controlled action decision within 20 business days after receiving the referral. 12 By contrast, there is no obligation on the Minister to invite comments and consider comments when making an assessment approach decision under s 87 of the EPBC Act. 13 There is no requirement in the EPBC Act to invite comments, or to consider the views of the public, on what assessment approach should be adopted. This tells strongly against the suggestion that the Minister has an obligation to accord procedural fairness to interested persons and the public concerning an assessment approach decision under s 87. 14 The Minister must consider the matters set out in s 87(3) in making an assessment approach decision under s 87(1). Those matters include, under s 87(3)(c), an obligation to consider any relevant information received in response to an invitation to the appropriate State or Territory Minister to comment on whether the action is a controlled action and to give the Minister "information relevant to deciding which approach would be appropriate to assess the relevant impacts of the action..." (see s 74(2)(b)(ii)). 15 There is no similar obligation for the Minister to invite or consider any other comments on an assessment approach decision. There is nothing to stop the Minister taking into account the views of interested persons or the public on the appropriate assessment approach, however, nothing in the EPBC Act compels the Minister to do so. 16 A further complication with IFT's procedural fairness argument, and also in the TWS proceeding, is that it is difficult to assess whether there has been any practical unfairness until the Minister makes a decision on approval. The decision on approval may attach conditions on approval which assuage the concerns of opponents of the pulp mill. It must also be remembered that the Minister's decision on approval only concerns matters that are the subject of the controlling provisions, as well as social and economic issues. Environmental matters raised in IFT's evidence which extend beyond the controlling provisions, such as noise and air pollution, are matters for Tasmania. 17 In order to establish practical unfairness, it must be shown that a person has been given an expectation by the Minister "as to a procedural step to be taken", which was not taken so that it may be said that a legitimate expectation held was disappointed (see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1 at [36] per Gleeson CJ). 18 Neither IFT or any of its members or, indeed, The Wilderness Society Inc., can show it or they were misled by the Minister. The subjective expectation held by opponents of the proposed action was generated by the RPDC process. While the Minister's predecessor agreed on assessment through the RPDC jointly with Tasmania, nothing the Minister did contributed to the demise of the RPDC. Further, the number and nature of the environmental matters relevant to the Minister's decision on approval are narrower than those dealt with by the RPDC. Even in that respect, the evidence of IFT is very general. There is no evidence of what precise material would have been put to the Minister had he decided on a longer period for "comment" than 20 business days. For example, Ms Christina Holmdahl referred to "detailed expert reports" on "flora and fauna and social and economic issues including but not only the impact on tourism". 19 The kind of material which IFT wished to put to the Minister, if there was more time, largely relates to matters which are relevant to Tasmania's assessment process, rather than the Minister's. The same can be said of the matters identified by Mr Paul Oosting at [59] of his affidavit dated 16 May 2007 in the TWS proceeding, with the exception of "marine impacts (including environmental impacts and particular species impacts)", "threatened species, as it relates to the site of the pulp mill", "social impacts" and "economic impacts". The limited nature of the matters which could be addressed with respect to the controlling provisions, combined with the limited nature of the evidence that could be put forward in respect of them, does not make it clear that the 20 business day time limit for comment amounts to a denial of procedural fairness in the circumstances. I certify that the preceding nineteen (19) 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 a relevant consideration 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 manifestly unreasonable whether in making second decision minister took into account an irrelevant consideration administrative law |
2 BDW has never acted for Mr Salfinger or Niugini Mining. However in the Queensland proceeding solicitors Mr Ray Lindwall and Ms Heidi Schweirkert, then at Corrs Chambers Westgarth, acted for Arkaroola and BDW acted for Niugini Mining. Subsequently Mr Lindwall and Ms Schweikert moved to BDW, but they have since left that firm. On 18 December 2000 Niugini Mining terminated the deed because of alleged breaches by Arkaroola. On 22 December 2000 Arkaroola commenced the Queensland proceeding against Niugini Mining alleging that the deed was improperly terminated. In the present proceeding, commenced in the Federal Court on 18 December 2006, Mr Salfinger as assignee of Arkaroola and in his own right makes substantially the same claim against Niugini Mining. He alleges unconscionable conduct, unjust enrichment and breaches of contract and fiduciary duty. 4 On 3 January 2001, on Mr Lindwall's application, an expedited timetable for delivery of pleadings in the Queensland proceeding, was directed. 5 In March 2001 Corrs ceased to act for Arkaroola. 6 On 20 August 2001 Mr Lindwall left the Corrs partnership and became a partner at BDW. Ms Schweirkert joined BDW at the same time as an employee senior associate. Two other Corrs' employees not involved in the Arkaroola matter, solicitor Thomas Boyd and articled clerk Thomas Vincent, also joined BDW about the same time. It would seem that the four transferred from Corrs to BDW as a group. 7 On 18 October 2001 Fryberg J struck out the Queensland proceeding on the ground of Arkaroola's repeated failure to comply with directions of the Court concerning the prosecution of the action, and specifically its failure to provide affidavits and expert reports. He intended to make Mr Lindwall and Mr Andreatidis "aware of the affairs and business dealings of Arkaroola and (himself) so that they could properly represent Arkaroola in the then intended litigation". The discussions also included various personal issues and financial and asset status. I understood that the discussions were held under solicitor client confidence. On behalf of Arkaroola, I provided Corrs with an extensive brief on Arkaroola's involvement with the deed and Red Dome. This brief became part of the files of Corrs. As already mentioned, Corrs ceased acting for Arkaroola in March 2001. Mr Lindwall believes that he did not have any further dealings with Arkaroola or Mr Salfinger after Corrs ceased to act for the company, apart from possible discussions in relation to unpaid accounts. 10 Mr Lindwall joined BDW on 20 August 2001 and commenced work in the Litigation and Dispute Resolution Group. When he left Corrs to join BDW he did not take any documents of any nature relating to Arkaroola, the Queensland proceeding or Mr Salfinger. 11 When Mr Lindwall joined BDW he advised Mr Guy Humble, the partner in charge of the Litigation and Dispute Resolution Group, that he had acted for Arkaroola at Corrs. Mr Humble said he was aware of the matter but had no involvement with it as it was being handled by Mr Kimmins under the supervision of Mr John Briggs, a partner in BDW's Resources Group. Mr Lindwall and Mr Humble agreed that they would have no further discussion in relation to that matter. This was the only discussion that Mr Lindwall had while at BDW about the Queensland proceeding. He understood then, and understands now, that he has a professional responsibility as a solicitor to maintain the confidences of his previous clients notwithstanding that any retainer with him personally has terminated. 12 Mr Lindwall had no involvement in the Queensland proceeding while at BDW. He did not provide any information, document or thing relating to Arkaroola, Mr Salfinger or his partner Mr Barry Moshel to any person at BDW, either while he worked there or after he ceased to be a partner. 13 Mr Lindwall left BDW on 31 October 2005 and is now practising in partnership with Ms Schweirkert. He has not discussed any matters relating to Arkaroola or Mr Salfinger with any person at BDW since leaving the firm (other than in relation to the preparation of his affidavit). 14 Ms Schweirkert says that she assisted Mr Lindwall in relation to the Queensland proceeding while at Corrs. She joined BDW as a senior associate on 20 August 2001 in the Litigation and Dispute Resolute Group. 15 When she left Corrs she did not take with her any documents of any nature relating to Arkaroola or the Queensland proceeding and those files and related documents remained with Corrs. During the time she was a BDW she did not discuss the dispute involving Arkaroola, the Queensland proceeding or anyone concerned with that company with anyone at BDW except Mr Lindwall. She had no involvement in the Queensland proceeding while she was at BDW. She did not provide any information, document or thing relating to Arkaroola to any person at BDW whilst she worked at the firm or after she ceased to work there. 16 Ms Schweirkert ceased employment with BDW on 30 September 2005. 18 On 30 March 2001 he was informed by Mr Lindwall that Corrs had ceased acting for Arkaroola. 19 On 16 August 2001 BDW sent a fax to Mr Salfinger advising that from Monday 28 August 2001 Mr Lindwall would join BDW as a litigation partner in the Brisbane office. Further Mr Lindwall will not be asked, nor will he comment on any matter associated with the present dispute. He said that so far as he is aware no documents of any nature of any relevance to the Queensland proceeding or the present proceeding were brought across by Mr Lindwall or Ms Schweirkert to BDW. 21 At no time has Mr Lindwall, Ms Schweirkert, Mr Boyd or Mr Vincent or any other person retained by Arkaroola or Mr Salfinger provided confidential information to Mr Briggs regarding Arkaroola, Mr Salfinger or the Queensland proceeding. Mr Lindwall, Ms Schweirkert, Mr Boyd and Mr Vincent had no involvement in the Queensland proceeding while they were at BDW. 22 Mr Michael Kimmins has been a partner with Corrs since approximately November 2001. Between January 1991 and 26 October 2001 he worked at BDW as a solicitor, senior associate and then special counsel in the Dispute Resolution Group. In 2001 at BDW he had the day to day conduct, on behalf of Niugini Mining, of the Queensland proceeding. When Mr Lindwall and Ms Schweirkert joined BDW to the best of Mr Kimmins' knowledge they had nothing to do with the Queensland proceeding. The Niugini Mining file was located in Mr Kimmins' office. During the conduct of the Queensland proceeding he never spoke to or otherwise communicated with either Mr Lindwall or Ms Schweirkert about the proceeding. 23 Mr Jeremy Chenoweth is a solicitor employed by BDW and, subject to Mr Lobban's direction, has the conduct of the present Federal Court proceeding. He has worked in the Litigation and Dispute Resolution Group within the Brisbane office of BDW since January 2005. During his time with BDW Mr Chenoweth did not work with Mr Lindwall or Ms Schweirkert on any file. They worked as a separate team within the Litigation and Dispute Resolution Group. Mr Chenoweth did not have any involvement in the Queensland proceeding and did not work in the Brisbane office of BDW at the time of that proceeding. Mr Chenoweth has never spoken to Mr Lindwall or Ms Schweirkert or otherwise communicated with them about the facts and circumstances of the Queensland proceeding, or about Arkaroola and Mr Salfinger or the dispute between Arkaroola and Niugini Mining. His knowledge of the file has only arisen after the departure of Mr Lindwall and Ms Schweirkert from BDW. 24 Mr Chenoweth has reviewed the material retained by BDW in respect of the Queensland proceeding. The file is extensive and comprises fourteen boxes. The only communications between any member of BDW and Mr Lindwall or Ms Schweirkert regarding the Queensland proceeding or in relation to Arkaroola apparent from the file occurred when Mr Lindwall was a partner at Corrs and Ms Schweirkert a senior associate at that firm and before Corrs ceased to act for Arkaroola. There were no documents held in the files of BDW containing any material in any way relevant to the present proceeding that could be confidential to Arkaroola. 25 Mr Chenoweth arranged a search of BDW's Keystone billing system which records time and narratives for time each person works on a file. The system does not show any time recorded for Mr Lindwall or Ms Schweirkert on the file relevant to the Queensland proceeding or any file for Niugini Mining. 26 Mr John Lobban is the partner at BDW in charge of the present Federal Court proceeding for Niugini Mining. He did not have any involvement in the Queensland proceeding, although his advice may have been sought. His involvement in the present matter arose only after the departure of Mr Lindwall and Ms Schweirkert from BDW. He did not communicate with Mr Lindwall or Ms Schweirkert in respect of the Queensland proceeding. He is not aware of BDW having possession of any documents or recording confidential information in respect of Arkaroola or Mr Salfinger and has no reason to believe the files of Arkaroola in respect of the Queensland proceeding did not remain at Corrs. 27 Mr Boyd had no involvement with any matter involving Arkaroola while at Corrs or at BDW. He left BDW on 24 March 2006. He has kept in touch with Mr Thomas Vincent who has been employed by Deutsche Bank in London since April 2004. The leading English authority is the House of Lords' decision in Prince Jefri Bolkiah v KPMG (a firm) [1998] UKHL 52 ; [1999] 2 AC 222. 29 It is not necessary to review these authorities in detail. The issues calling for resolution in the present case are within a short compass. 30 Since BDW never acted for Mr Salfinger or Arkaroola, and indeed have always acted against them, this case does not present the situation of a solicitor acting against a present or former client. 31 I will assume for present purposes that Mr Salfinger has made out a case with sufficient particularity that confidential information concerning his affairs and those of Arkaroola passed into the possession of Mr Lindwall and Ms Schweirkert when they were at Corrs. Such confidential information would extend to what Gillard J in Yunghanns v Elfic Ltd (Supreme Court of Victoria, unreported, 3 July 1998) has characterised as the "getting to know you" factors. In this regard the relationship between solicitor and client may be such that the solicitor learns a great deal about his client, his strengths, his weaknesses, his honesty or lack thereof, his reaction to crisis, pressure or tension, his attitude to litigation and settling cases and his tactics. These are factors which I would call the 'getting to know you' factors. The overall opinion formed by a solicitor of his client as a result of his contact may in the circumstances amount to confidential information that should not be disclosed or used against the client. 32 However, the critical question is whether the knowledge of Mr Lindwall and Ms Schweikert should be imputed to other lawyers at BDW. As Lord Millett said in Bolkiah , whether a particular individual is in possession of confidential information is a question of fact to be proved or inferred from the circumstances of the case: ( Bolkiah at 235. See also the observation of Steytler J in Newman v Phillips Fox (supra) at 317). The detailed evidence both from Mr Lindwall and Ms Schweirkert and from solicitors at BDW, the veracity of which was not challenged, enables that conclusion to be safely drawn. The circumstances point the same way. A large and reputable firm like BDW would be aware of the obvious potential conflict when a solicitor previously acting on the other side of litigation has joined them. This would be clear, notwithstanding that Corrs had ceased acting for Arkaroola some six months earlier. So there was all the more reason to take positive steps, such as notifying the former client of Mr Lindwall and going out of their way to ensure that he had nothing to do with any matters relating to that client. 34 As events have turned out, Mr Lindwall and Ms Schweikert left BDW before the present Federal Court litigation commenced so the risk of even accidental communication of relevant information hereafter can be ignored. 35 Mr Salfinger raised one particular matter. In early January 2001 he retained Mr David Finney of C & B Consultants of Cairns to prepare an expert's report and supporting affidavit for the Queensland proceeding. On Mr Salfinger's instructions Mr Lindwall and Mr Andreatidis prepared a brief for Mr Finney which contained confidential information and sent it to him on 9 March. 36 Mr Salfinger called Mr Finney in July and August 2001 to request the affidavit and again in September when he was given an "evasive response" and was told that C & B was not now willing to provide the affidavit and report. 37 On 4 September 2002, ie a year later, he called C & B to see if it were possible to get the affidavit in support of their report. On the same day he received a fax from C & B stating that they were now able to provide the affidavit to support the report. It would appear that C & B provided some kind of report in early 2002 but by this time Corrs had ceased to act for Arkaroola and Mr Lindwall and Ms Schweikert had left Corrs. The application be dismissed with costs. 2. The Directions Hearing be adjourned to 5 June 2007 at 9.30 am. | two solicitors at corrs chambers westgarth acted for applicant in earlier related litigation in supreme court of queensland corrs ceased to act the two solicitors moved to blake dawson waldron, solicitors for first respondent before commencement of present litigation in federal court the two solicitors left bdw evidence of no discussion between the two solicitors and other solicitors at bdw no documents brought by the two solicitors legal practitioners |
The application is dated 23 February 2006 and is supported by an affidavit and 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 Judiciary Act 1903 (Cth) and the 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 decision of the delegate was made on 8 August 2002. The applicant is a citizen of Bangladesh who arrived in Australia on 7 October 1999. On 21 May 2002 he lodged an application for a protection (class XA) visa. 2. On 8 August 2002 a delegate of the Minister refused the application. 3. On 5 June 2003 the Refugee Review Tribunal affirmed the delegate's decision. The decision of the Tribunal was handed down on 23 July 2003. 4. On 24 December 2004 the applicant issued proceedings in the Federal Magistrates Court seeking a review of the decision. 5. On 20 April 2005 the respondent brought an application to dismiss the application for review on the ground that it did not disclose a reasonable cause of action. 6. The Federal Magistrate made an order that the application for review be dismissed or in the alternative is incompetent because it is out of time. Those orders were made on 9 September 2005. 7. On 23 September 2005 the applicant applied to this court for leave to appeal. 8. On 7 October 2005 Bennett J dismissed the application for leave to appeal: SZFIO v Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2005] FCA 1449. 9. An application for review of the delegate's decision was lodged in the Federal Magistrates Court by the applicant on 26 October 2005. That is the application which is the subject of the second order made by the Magistrate. 10. On 1 December 2005 the respondent issued the notice of motion to which I have previously referred to have that proceeding dismissed. 11. On 6 February 2006 the respondent's application came on for hearing before a Federal Magistrate and he made the orders which I have set out above. The Magistrate said that the applicant's application challenges the delegate's decision and he said that it was doomed to fail because the decision of the delegate was subsumed in the decision of the Tribunal. This case is similar to the case which came before Wilcox J in SZDFW v The 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 The Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344). The Federal Magistrate found that the decision of the Tribunal was in no way affected by jurisdictional error and a judge of this court refused leave to appeal against that decision. 4 The delegate's decision is now of no significance having regard to the fact that it was reviewed by the Tribunal. The application for leave to appeal is dismissed. I certify that the preceding four (4) 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 federal magistrate and judge of federal court. migration |
2 By s 4 of the 1922 Act ' The Fund ' was defined to mean 'the Superannuation Fund established under this Act' and ' The New Superannuation Fund ' was defined to mean the superannuation fund established by the Superannuation Act 1976 (Cth) ('the 1976 Act'). 3 The 'New Superannuation Fund', established by s 40 of the 1976 Act, was the Commonwealth Superannuation Fund No. The fund so established and vested in the PSS Board became known as the PSS Fund . 5 As from 1 July 2006 the board ceased to be the PSS Board and became Australian Reward Investment Alliance, the applicant in these proceedings (see s 3 of the Superannuation Legislation Amendment (Trustee Board and Other Measures) Act 200 6 (Cth) and clause 47 of Schedule 1 thereto), also referred to as the 'Board'. 7 Section 3 of the 1990 Act defined ' trustee ' to mean 'a person who holds office as a trustee of the Board (i.e. Australian Reward Investment Alliance), and includes the Chairperson. 8 By a Deed made 21 June 1990 by the Minister for Finance in the name of the Commonwealth of Australia (the 'Trust Deed'), the Public Sector Superannuation Scheme was established as an occupational superannuation scheme to come into force on 1 July 1990 and to be administered by the PSS Board, later Australian Reward Investment Alliance. 9 The functions and powers of the Board in relation to the Public Sector Superannuation Scheme and the PSS Fund were, by virtue of s 22 of the 1990 Act, as set out in the Trust Deed. The Board was also responsible under s 22 for the general administration of the 1990 Act. My understanding is that the Commissioner for Superannuation is also the Chief Executive Officer of 'ComSuper' to which reference is made hereafter. 12 By s 25 of the 1990 Act provision was made for the Trustee Act 1925 (ACT) to apply to and in relation to the trustees acting in the performance of their functions, or the exercise of their powers, under the Trust Deed, except in so far as it was inconsistent with a law of the Commonwealth. 13 It may be observed that whilst the Chairperson and holders of office as 'other trustees' of the Board were trustees within the meaning of the 1990 Act, the Board was not itself a trustee to whom the Trustee Act 1925 (ACT) applied. 15 By clause 12 of the Trust Deed the Board was empowered to delegate all or any of its powers under the Deed other than its power to reconsider its own decisions or decisions made by its delegates to, inter alia, a member of the Board (i.e. one of the trustees), the Commissioner for Superannuation or a member of the staff assisting the Commissioner for Superannuation in the performance of his or her functions. 16 The Trust Deed made provision for the Board's decision-making process. If the Chairperson is not going to be present at a meeting of the Board, the Chairperson may nominate one of the Trustees to be Chairperson for the meeting. In the absence of such nomination, the Trustees shall elect one of the Trustees present at the meeting as a Chairperson for the meeting. Under s 6(1) of the 1990 Act persons employed in a permanent capacity by the Commonwealth or by an approved authority were constituted as members of the Public Sector Superannuation Scheme subject to certain exceptions. 18 The second respondent in these proceedings had been a member of the Commonwealth Superannuation Scheme constituted by the 1976 Act, but on 4 April 1991 she transferred from that scheme to the Public Sector Superannuation Scheme constituted by the 1990 Act. She became a member of the PSS Defined Benefits Plan as opposed to a member of the PSS Accumulation Plan. 19 It was common ground that the second respondent was at all material times a 'regular member' of the Public Sector Superannuation Scheme. 20 Where benefits became payable under the Rules for the administration of the Public Sector Superannuation Scheme as set out in the Schedule to the Trust Deed, s 16 of the 1990 Act made provision for the Board to make payments to the Commonwealth out of the PSS fund and for the Commonwealth to pay the relevant benefits under the Rules. DATE OF EFFECT This retirement will take effect at the expiration of 7 December 2005. 25 Prior to the notice in writing being given, the Board had certified in writing that, if the second respondent was 'retired'/terminated on the ground that, because of her mental or physical condition, she was unable to perform her duties, she would be entitled to receive invalidity benefits under the Public Sector Superannuation Scheme. 26 The termination of the second respondent's employment constituted an 'invalidity retirement' within the meaning of the Defined Benefits Plan section of the Rules. However, by an express exclusion, her 'invalidity retirement' did not fall within the definition of 'involuntary retirement' in the Rules (see clause B1.2.1). The matter about which the second respondent complained was identified as 'Disability Benefit' and 'Payment Calculation'. The Amount of the benefit/Amount in dispute was recorded as being $4,000 - $10,000 per annum. In particular, the second respondent was not satisfied with the assessment of her final average salary. In Retrenchment cases the PSS use a "weighted" method to calculate final monies. My pension is $10,000 per annum less than I would have received at age 60 & $4,000 pa less than if my exit salary had been allowed in the calculation of my FAS [which I would understand to be a reference to her final average salary]. Alternatively my exit salary of $87,305 be used to calculate my final benefit. On 21-3-2006 my FAS would have been $84,371. At Age 60 FAS would be $94,477 (Annual salary increases & not promotion which was very likely). I have a shortened life expectancy due to my health problems. ... Copies of my emails to and from PSS, setting out my complaint (about the method of calculating my final average salary), are attached ... ... I was retired from the Commonwealth Public Service on invalidity grounds on 7 December 2005. My health problems, unplanned and not really expected at age 55/56, came as quite a shock to me. ... My pre-assessment payments (50% of my salary) ceased on 7 December 2005, and so I had no option other than choose this date as my retirement date. Otherwise I would have had no income. 33 It seems to me that the concept of a Commonwealth public servant choosing her own 'retirement date', where her employment is terminated by a notice in writing given by the relevant Agency Head under s 29 of the Public Service Act , is misconceived. 34 The Board certainly has no part to play in determining when the employment of an Australian Public Service employee is to be terminated on the ground that the employee is unable to perform her duties because of physical or mental incapacity. True it is that s 13(1) of the 1990 Act places a restraint upon the giving of a termination notice under s 29(3)(d) of the Public Service Act where the relevant employee is under the age of 60, as the second respondent was in December 2005, and the Board has not certified in writing that if the employee is terminated on the ground that because of a mental or physical condition she is unable to perform her duties, she would be entitled to receive invalidity benefits under the Public Sector Superannuation Scheme. In the second respondent's case, a certificate was relevantly provided on 11 November 2005, whereupon it became a matter for her Agency Head to decide when, if at all, a notice of termination should be given to her. 35 As it transpires, on 23 November 2005 the Australian Crime Commission wrote a letter to the second respondent under the heading ' Pre-assessment Payments and Invalidity Retirement '. The date of effect of the pre-assessment payments is 14 April 2004 and payments commence at the expiration of all paid sick leave. ... As you are aware, you utilised annual leave and long service leave at the expiration of your paid sick leave (from 23 September 2004) ... ... Invalidity Retirement Comsuper has also approved invalidity retirement for yourself. The date of effect of your retirement is determined between the ACC and yourself. Comsuper have advised that your pre-assessment payments must cease effective close of business 7 December 2005 or on the retirement date, whichever is earlier, therefore I would recommend a retirement date for yourself of 7 December 2005. In any event, it is clear that insofar as she was able to influence the selection of the date upon which the Australian Crime Commission's notice of termination of her employment would take effect, she was content to accept the end of the day on 7 December 2005 as her date of termination/retirement. As she said in her letter of 20 December 2005 if she had not chosen 7 December 2005 as her 'retirement date' she would have been left in a position where she 'had no income'. 38 As it transpires, the second respondent's complaint was premature, as s 19(1) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ('the SRC Act') had not been satisfied. The SCT will not deal with my complaint until the Trustee of the PSS has formerly (sic) responded to me. If I am not satisfied with a response from the PSS, I have to lodge a new complaint with the SCT. Please note that I am asking for my current salary of $87,405 to count as my FAS (not just form part of it) or that the weighting system used for Retrenchments is applied to my case. Thereafter she received two emails in reply from a Complaints Officer within ComSuper, both of which were sent on 1 February 2006. The method used to determine the FAS for PSS invalidity benefits is specified in the PSS Rules and is the average salary for superannuation purposes on the 3 birthdays prior to the date of invalidity retirement. In your particular case your PSS invalidity benefit has been calculated based on a FAS of $77,195 which is your average salary for superannuation purposes on your 3 birthdays prior to your invalidity retirement on 7 December 2005. In your email you have asked that your salary as at the date of your invalidity retirement be taken into account when calculating your FAS, as is the case for PSS retrenchment benefit calculations. The PSS Rules are quite specific in relation to FAS calculations and do not include any discretion that would allow us to include your salary at retirement of $87,305 in your FAS calculation. The issue of whether PSS invalidity FAS calculations should allow for the inclusion of salaries as at the date of invalidity retirement is, therefore, a policy matter and any further enquiries in this regard should be directed to the Minister for Finance and Administration who is responsible for PSS policy matters. The fact that we have not provided a formal response to your earlier email is regretted and please accept my apologies in this regard. It was, however, our understanding from earlier telephone conversations with yourself and your husband that you were aware of the fact that any further queries regarding this matter needed to be directed to the Minister and, as a result, a formal response to you was not required. 42 In s 3(2) of the SRC Act ' complaint ' was defined to mean, relevantly, 'a complaint that has been made under section 14'. However, once it is accepted that "decision" connotes a determination for which provision is made by or under a statute, one that generally is substantive, final and operative, the place of "conduct" in the statutory scheme of things becomes reasonably clear. ... .... There is a clear distinction between a "decision" and "conduct" engaged in for the purpose of making a decision. A challenge to conduct is an attack upon the proceedings engaged in before the making of the decision. It is not a challenge to decisions made as part of the decision-making process except in the sense that if the decisions are procedural in character they will precede the conduct which is under challenge. In relation to conduct, the complaint is that the process of decision-making was flawed; in relation to a decision, the complaint is that the actual decision was erroneous. To give an example, the continuation of proceedings in such a way as to involve a denial of natural justice would amount to "conduct". That is not to deny that the final determination of the proceedings would constitute a decision reviewable for denial of natural justice. 51 It is common ground that the second respondent's invalidity retirement/termination required an application of the Average Salary Factors as set out in the column headed 'Cessation otherwise than on involuntary retirement '. 52 Given the period of her membership, the calculation of 'average salary' for the second respondent required her salary as at the date of her 56 th birthday, her salary as at the date of her 55 th birthday and her salary as at the date of her 54 th birthday to be added together and divided by 3. As at 7 December 2005, the second respondent was already 56 years of age. 53 Under clause B1.2.1 of the Rules ' final average salary ' was defined to mean 'the average salary applicable to a member on ... her last day of membership [i.e. the date on which she ceased to be a member]'. On 24 October 2006 the Board's Chief Business Operations Officer, who was the Delegate responsible for decisions under Rule B3.5.3, appears to have accepted a recommendation of ComSuper that the Board not exercise its power under Rule B3.5.3. A review meeting was held on 24 April 2007 and a further review meeting on 20 September 2007, but nothing relevantly occurred at those meetings. On 14 December 2005 the Trustee advised the Complainant of her Invalidity Benefit. The Complainant objected to the amount of the invalidity benefit calculated by the Trustee and to the lack of advice regarding her options. On 1 February 2006, the Trustee, having considered the Complainant's complaint, affirmed its original decision. On 20 December 2005 and 3 February 2006, the Complainant lodged a complaint with the Tribunal that the amount of her invalidity pension benefit paid to her from the Fund was unfair and unreasonable. The Complainant states the Trustee should have used its review power under the Trust Deed to change the calculation of her average salary. Under s37(6) of the Complaints Act, the Tribunal is required to affirm the decisions of the Trustee if it is satisfied that those decisions, in their operation in relation to the Complainant, were fair and reasonable in all the circumstances. For this purpose, under s4 of the Complaints Act, a "decision" includes engaging in any conduct or failing to engage in any conduct. For the reasons set out above, the Tribunal is not satisfied that the decisions of the Trustee, in their operation in relation to the Complainant, were fair and reasonable in all the circumstances. The Complainant may advise the Trustee of a shorter period if she feels she does not need this amount of time. If the Complainant does not so advise by the end of this further 45-day period then the current pension will stand. I am considering the possibility of retiring after my next birthday (ie 21 March 2005) --- due to ill health. I would observe that the second respondent's email made no mention of a perceived inability to perform her duties due to the 'ill health' to which she referred. Later the Tribunal expressed its view that the Board had not met its obligation to the second respondent in relation to its function [power, not duty] to 'provide information about benefits or potential benefits, and available options' to, relevantly, members (see [71] of the Review Determination and Reasons). 63 The second respondent urges that the obligation cast upon the Board by clause 3.3(c) of the Trust Deed, when taken with clause 3.1(b), converted the power to provide information into a duty. It will be recalled that clause 3.3(c) required the Board to ensure that its powers were performed and exercised 'in the best interests of members, preserved benefit members and associates'. 64 The Tribunal concluded that the Board had failed to meet its obligation to the second respondent to provide information about benefits or potential benefits, and available options. It said that, at the very least, the Board should have advised the second respondent, when it became aware of her 'imminent invalidity retirement, of the effect that her retirement date would have on the amount of her benefit' (see [76] of the Review Determination and Reasons). 65 The Tribunal continued by expressing its concern that the Australian Crime Commission had provided the second respondent with personal financial advice in relation to her superannuation benefit without considering her alternative retirement dates (see [77] of the Review Determination and Reasons). 66 These observations of the Tribunal proceeded, in my opinion, on a complete misunderstanding in relation to the selection of a date for the second respondent's 'imminent invalidity retirement'. This misunderstanding is further demonstrated by what appears in subparagraphs 3) and 5) of paragraph 81 of the Determination of the Tribunal as set out above. Subparagraph 3) contemplates that the second respondent could 'make an informed decision about her options in relation to her retirement date' and subparagraph 5) suggests that the second respondent could advise the Board 'that her invalidity retirement date is to be 21 March 2006'. 67 In my opinion the idea of the second respondent having control over the selection of a date for the termination of her employment is ludicrous. 68 Part of the reason for the Tribunal's misunderstanding was, no doubt, that s 13(1) of the 1990 Act spoke about a member 'being retired', as if the member could choose to 'retire' or 'not retire'. The truth of the matter is that 'being retired' is simply a rather genteel way of saying 'terminated'. 69 What happened in the case of the second respondent was that by the conduct of the Agency Head of the Australian Crime Commission her employment was unilaterally terminated by the notice in writing dated 1 December 2005 with effect at the expiration of 7 December 2005. Her employment as an Australian Public Service employee came to an end at the end of the day on 7 December 2005 in circumstances where she had no right to select a date for her termination different from that selected by the Agency Head. 70 What is more, the Board had no responsibility for advising the second respondent that the Australian Crime Commission may yield to her wish, were she to communicate such a wish to the Australian Crime Commission, that her employment be terminated at some later point in time. In any event, it is clear from the second respondent's letters to the Tribunal of 20 December 2005 and 3 February 2006 that she in fact chose 7 December 2005 as her retirement date to ensure that her income stream was uninterrupted. Otherwise I would have had no income. Its conclusion in respect of the application of Rule B3.5.3 was not challenged by the second respondent. The first respondent erred in law in that, having found that the applicant could not use its discretion in Rule 3.5.3 of the Rules in the circumstances of this case to 'use an alternative average salary', the first respondent ordered that, if the second respondent so requests, the applicant must vary her retirement date from her actual retirement date of 7 December 2005 to 21 March 2006. That order is inconsistent with the Rules, and therefore unlawful. The first respondent erred in law in making directions purportedly to remedy the failure of the applicant to give the second respondent adequate information. The applicant's conduct in relation to the provision of information to the second respondent is not 'conduct in relation to making a decision' by the applicant, and therefore is not a decision for the purposes of s 4 of the Superannuation (Resolution of Complaints) Act 1993 (the Act). Therefore, it is conduct that is outside the first respondent's jurisdiction under s 14 of the Act. These directions that do not pertain to the unfairness or unreasonableness of the decision to calculate the member's FAS using her actual retirement date and are therefore unlawful. 76 In Rule B1.2.1 ' preserved benefit member ' was defined to mean 'a former member to or in respect of whom a preserved benefit has not yet been paid'. ' preserved benefit ' was defined to mean 'a benefit that, on a member ceasing membership, is either compulsorily or voluntarily retained in the PSS defined benefits plan for payment under Part B8 of these Rules, together with any increases under Division 6 of that Part, to, or in respect of, the former member or his/her beneficiaries'. 77 In respect of the calculation of the benefit payable to a former member an important amount is the person's 'final average salary', defined in Rule B 1.2.1 to mean 'the average salary applicable to a member on ... her last day of membership' . In the second respondent's case that was 7 December 2005. 78 By a letter dated 14 January 2006 from a Member Benefits Officer in ComSuper to the second respondent, she was advised that her application for a Public Sector Superannuation Scheme benefit had been processed. This entitlement comprises your scheme equity, less the amount converted to pension, plus an additional interest payment which is calculated to the date of payment of your benefit. ... Your superannuation pension entitlement is $31491.61 per annum. Regular fortnightly payments of $1214.45 will commence on Thursday 2 February 2006. However, when her first pre-assessment payment was made on 17 November 2005, that payment was a lump sum which provided a benefit that was retrospective to 7 July 2005. 82 As previously indicated the Board did not fall within the definition of 'trustee' within the meaning of the 1990 Act. Accordingly the Trustee Act has no present significance. Even if it did, I have reservations as to whether it could have any relevant application in the circumstances of the present case. In the case of the New South Wales Act the word 'whatever' was inserted between the words 'thing' and 'relating'. 85 I would have thought that the conferral of a power of compromise was directed as empowering trustees to accept less by way of payment than was due or claimed to be due to the Trust rather than a power to pay an amount by way of compromise in respect of a claim made upon the relevant trust fund. 86 When the Second Reading Speech was delivered in the New South Wales Legislative Assembly no mention was made of the clause which became s 49 in the New South Wales Act. The purpose of the bill is to incorporate the provisions of new statutes regarding trustees and trust property, with the object of facilitating the administration of trust estates, and to vest trustees with powers which experience has shown it is necessary they should possess. It contains 100 clauses and there is no general principle running through it. It is simply a mass of clauses dealing with different matters all relating to trustees and giving them powers which they ought to have. In particular, it was held that, in compromising a claim adverse to the trust, the consent of the beneficiaries is not required. His Honour ended up considering the matter before him by reference to the power contained in s 44(f) of the Trusts Act 1973 (Qld) which was in substantially the same terms as s 49(1)(e) of the Trustee Act . ... one hardly needs to cite authority for the proposition that expressions such as "claim or thing" and "relating to the trust or to the trust property" are of the widest import and should not be read down unless their context or other circumstances clearly require it. That case concerned the efficacy of an agreement to compromise a probate proceeding in which the validity of a will was contested. The question was whether s 19(1)(f) authorised the executors to enter into the compromise in anticipation of a grant of probate. Nettle J reached the view that s 19(1)(f) did not authorise an executor to compromise a dispute as to the validity of a will without the consent of affected parties or an order of the Court that bound them. Equally, according to context, the conception of things which relate to an estate may include a very broad range of possible subject matters. But it requires no recitation of authority to establish that the words of a statutory provision are to be read in context and according to the apparent purpose of the provision. And in their context and according to what I perceive to [be] the purpose of the s 19 of the Trustee Act , "claims relating to ... the estate" appear as limited to claims upon or against the estate. With respect, I think the observations of Sir Robert Megarry VC in Re Earl of Strafford to be persuasive. The section is concerned with claims against the estate --- be they from the outside world or as between the beneficiaries --- not proceedings to determine the title of the executor or trustee. 92 Even if the Tribunal had power under s 37(1) and (3) of the SRC Act, when taken with s 25 of the 1990 Act and s49(1)(e) of the Trustee Act , to compromise a claim made by a former member in the position of the second respondent for the payment of a benefit greater than that for which the Rules provided, it would not, in my opinion, have been open to the Tribunal, exercising all the powers, obligations and discretions that are conferred on the Board, to compromise the relevant claim in a manner that would be contrary to s 37(5) of the SRC Act. Section 37(5) precludes the Tribunal from doing anything that would be contrary to the 'governing rules of the fund concerned' and those Rules fixed the amount of the second respondent's benefit in the amounts indicated in the letter of 14 January 2006 to which reference has been made. (See Rule B3.5.1 and see generally National Mutual Life Association of Australia Ltd v Campbell [2000] FCA 852 ; (2000) 99 FCR 562 at [10] - [12] and [15]-[16]; see also Crocker at [22]-[23] and [27]). 94 The particular information, which it is alleged the Board should have provided, was that the second respondent had flexibility in choosing the date upon which the Agency Head of the Australian Crime Commission might determine her employment in accordance with the provisions of s 29(1) of the Public Service Act and that, if the date of termination of her employment was deferred, especially until on or after her next birthday on 21 March 2006, her benefit payable from the PSS Fund would increase. 95 The second respondent further submits that the Board made a decision that was reviewable under s 14 of the SRC Act, (upon the making by the second respondent of a complaint that the decision was unfair or unreasonable under s 14(2)) when it failed to compromise her claim that the method used in assessing her final average salary for the determination of the benefit payable to her from the PSS Fund following her 'invalidity retirement' was unfair and unreasonable and produced a benefit which was $4,000 - $10,000 p.a. less than it would have been if the Board had failed to apply the Rules for the determination of her benefit and, instead, treated her employment as having been terminated on the date of her 57 th birthday, (i.e. 21 March 2006), in lieu of the actual date from which the termination of her employment took effect (i.e. the end of the day on 7 December 2005), in accordance with the powers of compromise said to have been conferred on the Board by s 25 of the 1990 Act and s 49(1)(e) of the Trustee Act . 96 The second respondent accepts that Rule B3.5.3 of the Rules could not have been invoked by the Board, or the Tribunal, to enable the Board to use an alternative, and higher, average salary for the purpose of calculating her benefit from the PSS Fund on the basis that the average salary for her, calculated in accordance with Rule B3.5.1, was 'not in accordance with the spirit of the Rules and would lead to inequitable treatment between members'. 97 However, the second respondent submits that the Board could have invoked s 49(1)(e) of the Trustee Act to pay her a higher benefit from the PSS Fund given her complaint under which she sought $4,000 - $10,000 p.a. more than her entitlement under the Rules. 98 I trust that I have not done counsel for the second respondent a disservice by my attempt to distil her submissions, which were put in a variety of ways during the course of argument, as I have above. The submissions were not without their complexity. 99 It will be apparent from what I have already said that there are good reasons for rejecting the second respondent's submissions. Her employment was terminated with effect from the end of the day on 7 December 2005 and it was not open to the Board to calculate a benefit for her on the assumption that the termination of her employment by the Agency Head of the Australian Crime Commission occurred some three months later. 100 Putting all these considerations to one side, it is necessary to address what the complaint was that the Tribunal was reviewing. It seems to me that the complaint was a complaint in respect of the calculation of the second respondent's Final Average Salary and its consequential impact upon her benefit under the Public Sector Superannuation Scheme (see [28]-[32] above). The complaint that was addressed and was not settled to the satisfaction of the second respondent in accordance with s 19 of the SRC Act was that complaint --- not a complaint about the lack of provision of information or a complaint about a failure to effect a compromise under the Trustee Act . And the complaint that was thereafter made by the second respondent to the Tribunal was the very same complaint (see [41] above). 101 It does not seem to me that the failure, if there was one, by the Board, to provide information as alleged constituted a failure to make a decision within the meaning of s 4(a) of the SRC Act, nor did it amount to a failure to engage in any conduct in relation to the making of a decision by the Board within the meaning of s 4(b) of the SRC Act. 102 Furthermore, it does not seem to me that a failure to compromise a claim for a larger benefit than the one for which the Rules made provision could constitute a failure by the Board to make a decision or to engage in conduct in relation to the making of a decision within the meaning of s 4 of the SRC Act. 103 The power to compromise a claim, whatever the extent of that power may be under the Trustee Act , did not impose any obligation on the relevant trustee or trustees to make a compromise or engage in a process in relation to the making or possible making of a compromise. No decision was required. 104 Contrary to the submissions of the second respondent, I am satisfied that each of the questions of law identified in the Notice of Appeal were questions of law within the meaning of s 46(1) of the SRC Act (see Vetter v Lake Macquarie City Council [2001] HCA 12 ; (2001) 202 CLR 439 at [24] et seq). 105 In my opinion, it was not open to the Tribunal to find that any decision of the Board in relation to the second respondent was unfair or unreasonable. 106 The directions which the Tribunal purported to give to the Board, upon the remission of the complaint, were beyond the power of the Tribunal. Neither the Board nor the Tribunal could provide for a benefit to be paid to the second respondent out of the PSS Fund which did not accord with the Rules and which contemplated calculations being made on the premise that the second respondent could require the date of termination of her employment as an Australian Public Servant to be notionally treated as a date other than that fixed by her employer. 107 In my opinion the Board has made good each of the grounds stated in the Notice of Appeal. 108 In the foregoing circumstances, the appeal should be allowed, the determination of the Tribunal should be set aside and in lieu thereof the decision of the Board of 1 February 2006 in respect of the second respondent's complaint made on 20 December 2005 and pressed on 3 February 2006, should be affirmed. 109 The second respondent having defended the appeal, it would be open to the Court to make an order for costs in accordance with s 46(5) of the SRC Act. The second respondent having failed comprehensively in defending the determination of the Tribunal, it would, in my opinion, be appropriate for an order for costs to be made in the applicant's favour. However, I note that the applicant does not seek an order for costs. I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | powers of the superannuation complaints tribunal in relation to complaints made with respect to decisions of the trustee of the pss fund what is a reviewable decision tribunal acting beyond power whether the trustee act 1925 (act) has any application to australian reward investment alliance termination on the ground of inability to perform duties because of physical or mental incapacity restraint on 'being retired' from employment/terminated where employee is under 60 years of age and is a member of the australian public service superannuation employment |
At the time of delivery of judgment I made directions permitting the parties to make written submissions as to costs in respect of the notice of motion, to be filed by 4.00 pm on 29 May 2009, and which submissions I indicated I would take into consideration in making my decision as to costs. I made it clear at that time that final submissions (if any) were to be made by the parties in accordance with the directions. The parties understood that directions were made on that basis. The first and second respondents complied with those directions, and filed submissions on 29 May 2009. Mrs Tracy filed submissions last Monday, one business day late, however I do not consider that any prejudice is occasioned to the first and second respondents as a result of this late filing. Of course, the usual rule is that costs follow the event in the absence of special circumstances justifying some other order ( Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 , Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107). The first and second respondents were unsuccessful in respect of their notice of motion. However, for very different reasons, the parties have submitted that the usual rule as to costs should not be perfunctorily applied in relation to this notice of motion. In summary: The first and second respondents have submitted that: the parties' costs of the hearings on 8 December 2008 and 20 February 2009 be costs of the notice of motion; and because, of three clear issues identified in the notice of motion, Mrs Tracy was successful in relation to two, the first and second respondents should pay one-third of Mrs Tracy's costs on a party and party basis. Mrs Tracy has submitted that: there is no question that Mrs Tracy was wholly successful in the proceedings; in the circumstances, the costs ordered in favour of Mrs Tracy should be on an indemnity basis because: Mrs Tracy had to instruct solicitors and Counsel and thereby incur legal fees and disbursements, and if only party and party costs are awarded to Mrs Tracy she will be penalised by the difference between the party and party costs awarded and the amount of her own solicitor and client costs incurred in defending the proceedings; The first and second respondents engaged in inflammatory correspondence to the Court wrongfully claiming that the filing by Mrs Tracy of her written submissions on 9 February 2009 was not contemplated when they knew that those submissions were both contemplated, and ordered by the Court. The result of that conduct was that the Court convened a directions hearing, at which hearing it emerged that the objections made by the first and second respondents were groundless; The notice of motion was commenced or continued in disregard of known facts, including that the first and second respondents had evidence that Mrs Tracy had not provided any financial support for the principal action; The notice of motion was commenced or continued for an ulterior motive, presumably for the purpose of applying pressure to Mrs Tracy or her husband the second applicant as some form of intimidation or punishment. Mrs Tracy arranged time off work in order to comply with the requirement for cross-examination as notified by the first and second respondents, which the first and second respondents subsequently advised was not necessary; The notice of motion was commenced or maintained in disregard of clearly established law, including that the first and second respondents pressed for indemnity costs against Mrs Tracy notwithstanding that the applicants in the substantive proceedings had been the subject of an order for standard costs; The proceedings have been unduly prolonged by the making of groundless contentions by the first and second respondents; and The first and second respondents persistently breached the directions made by the Court in the proceedings and thereby caused Mrs Tracy to incur greater costs than she would have incurred had they complied with the directions of the Court. As has been made clear in many cases (recently, for example, in Australian Competition and Consumer Commission v Prouds Jewellers Pty Ltd [2008] FCAFC 199 at [69] ), the only limitation on the exercise of the Court's discretion as to costs is that the discretion be exercised judicially. As I indicated on 20 February 2009, Mrs Tracy was entitled to file written submissions by 6 February 2009 in relation to notice of motion as a whole. The history of why I had originally made orders simply anticipating an exchange of submissions on 6 February 2009 is set out in the transcript of the hearing of 20 February 2009 and I do not propose to repeat that history. While it is true that Mrs Tracy was late in filing the written submissions due by 6 February 2009 --- indeed the submissions were not filed until 10 February 2009 --- as I indicated on 20 February 2009 Mrs Tracy had not done anything wrong in filing those detailed written submissions. The confusion of the first and second respondents arose because Mrs Tracy's principal written submissions were filed late, and from what appeared to be the belief of the first and second respondents that the direction concerning the filing of any supplementary written submissions concerning a jurisdictional issue by 9 February 2009 limited the written submissions which the parties were entitled to file by 6 February 2009. I agree with Mrs Tracy that that was never the case. I do not accept the submission of the first and second respondents that costs connected with the hearings of 8 December 2008 and 20 February 2009 be costs on the motion. In my view the costs of those hearings should follow the event, and should be awarded to Mrs Tracy. Is Mrs Tracy entitled to indemnity costs? In Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 8) [2008] FCA 1556 I discussed in some detail principles relevant to the award of indemnity costs by the Court in appropriate circumstances. A number of those key principles are: As I also observed in Citrus (No 8) [2008] FCA 1556 , a long --- and non-exhaustive --- list of relevant issues for the Court in considering whether to award indemnity costs can be found in such cases as Colgate-Palmolive v Cussons [1993] FCA 536 ; (1993) 46 FCR 225 and InterTAN Inc v DSE (Holdings) Pty Ltd [2005] FCAFC 54. While I am satisfied in respect of this notice of motion that Mrs Tracy is entitled to the majority of her costs as against the first and second respondents (I will return to the issue of apportionment later in these reasons), I am not satisfied that she is entitled to be awarded those costs on an indemnity basis. I form this view for the following reasons: Finally, I note that the submissions of the first and second respondents were not unsuccessful in respect of all issues. As I will now discuss in more detail, I found for the first and second respondents in respect of the so-called "jurisdictional" issue. Is an apportionment of costs justified? The first and second respondents have submitted that an apportionment of costs is appropriate in light of the measure of success enjoyed both by the first and second respondents, and by Mrs Tracy. In particular, I note that the first and second respondents were successful in respect of the "jurisdictional" issue raised by Counsel for Mrs Tracy at the hearing of the notice of motion, namely whether the Court's jurisdiction to make an order as to non-party costs had been exhausted by a previous order that the applicants be liable for the costs of the first and second respondents. The first and second respondents have submitted that Mrs Tracy ought to pay their costs in respect of the jurisdictional issue. As recently observed, in the past the Full Court has cautioned against too ready a resort to apportionment according to issue based outcomes ( Emirates v Australian Competition and Consumer Commission (No 2) [2009] FCA 492 at [8], Australian Trade Commission v Disktravel [2000] FCA 62 at [3] ). Looking at the proceedings as a whole, the jurisdictional issue was a relatively minor aspect of the case, as was the question whether Mrs Tracy should be liable on an indemnity basis for costs of the first and second respondents. In my view, it is clear that the principal aspect of these proceedings concerned the question whether Mrs Tracy was in fact liable for non-party costs. Mrs Tracy was successful in respect of this principal issue and should, in my view, be entitled to a significant proportion of her costs. However I am not persuaded by the submission of the first and second respondents that Mrs Tracy should be entitled only to one third of her costs on the notice of motion. In light of the fact that Mrs Tracy was successful overall in these proceedings and taking into consideration the minor significance of the jurisdictional issue in the proceedings, I consider that the appropriate order is that Mrs Tracy's costs be discounted by 15%. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | notice of motion seeking non-party costs against wife of second applicant to substantive proceedings first and second respondents unsuccessful on primary issue raised in notice of motion first and second respondents successful on minor issue whether wife of second applicant entitled to costs on an indemnity basis reserved costs from interlocutory hearings costs |
It is apparently a not-for-profit company which was established in 2007 to operate as a non-exclusive licensing agency, and to protect the intellectual property of independent record labels. It currently represents over 10,000 record labels from around the world. 2 By a Notice of Motion filed 2 April 2008 Merlin seeks orders under O 46 r 6 of the Federal Court Rules for leave to inspect and copy a large number of documents on the Court file in respect of proceedings in the matter of Universal Music Australia Pty Ltd v Sharman Licence Holdings Ltd [2005] FCA 1242 ; (2005) 65 IPR 289. 3 Those proceedings are commonly known as "the Kazaa proceedings" which are said to have been the largest copyright case ever brought before an Australian court, and amongst the largest intellectual property cases in the world. 4 The Notice of Motion as originally filed sought access to an extraordinarily wide range of material. It appears on its face to extend to almost every document in the now defunct court file. However, Merlin subsequently confined the application in a way that I will refer to later. Even then, the application seeks a large body of material. 5 Merlin's application was opposed by a number of parties to the Kazaa proceedings. The principal opponents were a number of record companies in the EMI, Sony BMG, Universal and Warner Groups ("the Record Companies") who were applicants in the Kazaa proceedings and by the sixth to ninth respondents in those proceedings. The sixth to ninth respondents are referred to as the "Altnet Respondents". 6 The application raises an important question of principle which does not seem to have been dealt with in any earlier authority. Although Dr Bell invoked the principle of open justice, referred to in cases such as Seven Network Ltd v News Ltd (No 9) [2005] FCA 1394 ; (2005) 225 ALR 256 , ultimately he put the application on the footing that it was for access to justice. 7 The purpose for which Merlin seeks access to the documents is to obtain information concerning possible infringements of its members' copyright in the same period as was covered by the Kazaa proceedings. Merlin seeks to obtain evidence of copyright infringement by the respondents to the Kazaa proceedings, by the same conduct as was in issue in those proceedings. 8 The essential issue which arises is whether a non-party ought to be given access to a defunct court file in order to gather evidence for a case it (or, more accurately, some of its members) may wish to bring against the respondents to the Kazaa proceedings in circumstances in which the non-party cannot satisfy the requirements for an order for preliminary discovery under O 15A of the Federal Court Rules . 9 A number of discretionary considerations are raised by the Record Companies and the Altnet Respondents including delay, prejudice and the failure of Merlin to offer any of the protections, including compensation, as would be provided by an application under O 15A, or upon the service of a subpoena. There were simultaneous raids on twelve locations in three states of Australia. At the time of the execution of the Anton Pillar orders, sixty members of the firm of solicitors representing the Record Companies and associated applicants were engaged in the matter. 11 The Kazaa proceedings concerned copyright infringement by the respondents in 98 specified sound recordings. When the proceedings were commenced, other sound recordings were included in the claim but the proceedings were ultimately confined to the number referred to above. 12 Sixty one affidavits, many of them lengthy, made by 34 witnesses, were read at the trial. Seventeen witnesses gave oral evidence. The trial judge, Wilcox J, observed that whilst an enormous quantity of evidence was tendered, little of it was the subject of objection by the parties. 13 The judgment of Wilcox J was handed down on 5 September 2005. His Honour found that each of the 98 recordings had been able to be downloaded, and had been downloaded, through the file-sharing facility of the Kazaa system: Universal Music v Sharman at [17]. His Honour also found at [181] that a major use of the Kazaa system was the transmission of copyright material. None of them had an interest to prevent or curtail that predominant use; if anything, the contrary. Each of the respondents was at least acquiescent in the use of Kazaa for copyright-infringing activities. 16 An appeal was lodged against his Honour's judgment but the proceedings were apparently settled in about August 2006. 20 Ms Robb also says in her affidavit that she believes any method other than access under O 46 r 6 would be attended by significantly greater cost and difficulty, including costs to be incurred by third parties. However, I am concerned that, without access to the material it presently seeks, Merlin cannot identify which of its members would be the proper applicants to such proceedings. The body of affidavit makes no reference to any recordings by the artists set out at paragraph 2.6 of Ms Robb's affidavit sworn 15 April 2008 ( Merlin Artists). There are 4 references in Exhibit AEJ-1 to recordings by the Merlin Artists (pages 5, 8 and 16). The body of the affidavit makes no reference to any recordings by the Merlin Artists. Exhibit PDFM-1 contains lists of the files that were discovered by Mr Morle. There are 43 references to recordings by the Merlin Artists. Sharman discovered 2 recordings by the Merlin Artists. The body of the affidavit of [sic] makes no reference to any recordings. There are also no references to the Merlin Artists in Exhibit TM-2. In the time available the Record Companies have not be [sic] able to review Exhibit TM-3 to determine whether there are any recordings by any of the Merlin Artists in Exhibit TM-3. The body of the affidavit of Elise Ball sworn 27 January 2004 makes no reference to any recordings. There are 9 references to Merlin Artists on a screenshot which is contained on page 36 of Exhibit EEB-3. These will not be on the Court file because the seized information was held by the independent solicitor following the execution of the orders and subsequently a limited class of data relating to the case brought by the Record Companies was extracted by a computer forensic expert. Of the extracted files, there are only 2 references to one of the Merlin Artists (Billy Bragg) that appear on Exhibit NJC-3 to the affidavit of Nigel Carson sworn 12 August 2004. The bodies of the affidavits make no reference to any recordings. There are no references in the non-confidential exhibits to Mr Lyons' affidavits to any recordings by any of the Merlin Artists. At least some of these results are contained in affidavits of Mr Ellis [filed in the Kazaa proceedings] : Judgment [64] --- [66], Robb 5.7. Although the witness Mr Mizzone was concerned about the confidentiality of the technical means deployed to gather this data, the data itself and the results of his inquiries were in an open affidavit: Judgment [238]. It is sufficient to say that this Rule regulates the extent to which a non-party can have unfettered access to documents contained in Court files. It does so by drawing a distinction between specified classes of documents which may be inspected without prior leave of the Court and other specified categories which a non-party "must not inspect" except with leave of the Court. 25 The first types of document are listed in O 46 r 6(2). The documents in the first class include pleadings and written submissions. Even then, access is subject to some restriction because the document may be inspected unless the Court or a Judge has ordered that it is confidential: O 46 r 6(1). 26 The documents which fall into the second class include affidavits and unsworn statements of evidence. Thus, documents such as tender bundles and other exhibits may only be inspected with leave under this sub-rule. 28 Special provision is made for access to transcripts of proceedings. Transcripts may not be inspected except with leave: O 46 r 6(8). 29 A non-party may only copy a document that has been produced for inspection if the Registrar gives permission to do so and the person pays the prescribed fee: O 46 r 6(6). 31 This is hardly surprising because the principle which informs the exercise of the power is that of open justice, the underlying rationale being the belief that exposure to public scrutiny is the surest safeguard against abuse of power of the courts: see Seven Network at [21]ff; Re Richstar Enterprises Pty Ltd; Australian Securities and Investments Commission v Carey (No 2) (2006) 232 ALR 398 at [16]ff; Rich v Harrington (2007) 99 ALD 297 at [17]ff. 32 In Australian Competition and Consumer Commission v ABB Transmission & Distribution Ltd (No 3) [2002] FCA 609 , Finkelstein J said at [7] that the proper approach is that access should be allowed unless the interests of justice require a different course. His Honour went on to say that there is a strong presumption in favour of allowing any member of the public who wishes to do so to inspect any document or thing that is put into evidence. 33 Sackville J has expressed his agreement with the abovementioned statements of principle by Finkelstein J: Seven Network at [25]. However, I do not think it follows that the principle is as broad as was submitted by Dr Bell SC for Merlin. Dr Bell's submission was that, at least with respect to documents which have been admitted into evidence, exceptional circumstances are required for an application under O 46 r 6(3) to be refused. 34 It is true that in ACCC v ABB Finkelstein J expressed the principle in terms which reflect Dr Bell's submission. It is also true that Sackville J has expressed his agreement with the passage of the judgment; Seven Network at [25]; see also Nyangatjatjara Aboriginal Corporation v Registrar of Aboriginal Corporations [2006] FCA 606 at [14] . But in my opinion, Seven Network and other relevant authorities do not establish a rule that there must be exceptional circumstances for an application to be refused. 35 As Sackville J observed in Seven Network at [24], O 46 r 6 does not confer a right on a non-party to obtain access to documents admitted into evidence. Leave from the Court is required. His Honour referred with approval to the statement made by Spigelman CJ in John Fairfax Publications Pty Ltd v Ryde Local Court (2005) 62 NSWLR 512 at [29] that open justice is a principle, not a "freestanding right". 36 The guiding principle seems to me to be as stated by Sackville J in Seven Network at [27]. His Honour there said that, unless the interests of justice require otherwise, the Court would ordinarily take the view that a non-party should have access to all non-confidential documents and other material admitted into evidence. 37 Sackville J went on at [27] to make the important point that in each application the Court will have to take into account the particular circumstances of the case. A convenient "touchstone" will be whether the documents have been admitted into evidence. So too did Branson J in Rich v Harrington at [23]. Her Honour said that this approach recognises that the discretion under O 46 r 6 must be exercised having regard to the particular circumstances of the case. 39 Branson J went on to say at [24] that where a non-party seeks access to material which has been relied upon by a judge, the proper approach tends more strongly in favour of public disclosure; access should be allowed save where the interests of justice require a different course. That is not identical with the exceptional circumstances test stated by Finkelstein J. 40 ACCC v ABB is the only Australian authority to which I have referred in which access was granted to a non-party who was not a media organisation. The applicant was a non-party who sought access to a statement of agreed facts and joint submissions of the parties in proceedings brought by the Commission against a company and its executives for civil penalties for contravention of s 45 of the Trade Practices Act 1 974 (Cth): see ACCC v ABB at [1]. The applicant sought access to those documents to determine whether it should bring an action to recover losses suffered as a consequence of the admitted breaches. 41 The extension of the principle of open justice to those circumstances is perfectly understandable. The Commission's proceedings were brought in the public interest and parties affected by the contravention ought to be given access to determine whether a private action for damages caused by the contravention would be justified. The documents sought were confined in nature. The applicant did not seek to trawl willy-nilly through the court file. 42 The question of whether access should be granted to Merlin arises in different circumstances. The authorities to which I have referred indicate, in my view, that the discretion is one to be exercised in the interests of justice, having regard to all the circumstances. 43 Where leave is sought to inspect documents that have not been read in open court, or at least tendered in evidence and considered by the judge as evidence or submission, the rule in my opinion is that leave will ordinarily be refused to inspect that material. This approach is consistent with that suggested by Sackville J in Macquarie Radio Network Pty Ltd v ABA [2002] FCA 1408 at [21] ; cf. ACCC v ABB at [6]. 44 It is true, as Finkelstein J said in ACCC v ABB at [6] that O 46 r 6(3) does not distinguish between documents that have been admitted into evidence and those which have not. But as Santow J observed in eisa Ltd v Brady [2000] NSWSC 929 , there is a risk of serious injustice if untested allegations can be published to the world at large: cited in Macquarie Radio Network at [21]. It is a file maintained by the court for the proper conduct of the proceedings. Access to that file is restricted. Non-parties have a right of access to the extent, but only to the extent, provided in the rules. FAI General Insurance Co Ltd sought access to counsel's written submissions in the proceedings to identify documents that might be the subject of a subpoena in parallel litigation. His Lordship at 996 regarded this as a legitimate purpose for the grant of access to the documents. 49 In Dian AO v Davis Frankel & Mead (a firm) [2005] 1 All ER 1074, a non-party applied to the court for permission to inspect and copy the court file in proceedings which had been concluded by compromise some eight years earlier. The non-party made the application in the hope of obtaining information which would be of use to it in litigation which was on foot in the British Virgin Islands. 50 Moore-Bick J granted access to affidavits and pleadings notwithstanding the substantial delay. Of course, he did so under the relevant English rules of court but a number of his observations are in my view applicable to the regime established under O 46 r 6. 51 First, the principle of open justice is primarily concerned with monitoring the decision-making process as it takes place, not with reviewing the process long after the event: Dian at [30]. 52 Second, an application for permission to use the court file as a source of potentially useful information to assist in other litigation does not engage the principle of open justice. Nevertheless, one consequence of the application of the principle of open justice is that persons who are present in Court may obtain access to information that they may be able to use to their advantage in other litigation. But this is merely a consequence of doing justice in public. It is not one of its primary objects: Dian at [31]. 53 Third, the rules do not contemplate permission to inspect the file as a whole. The documents which an applicant wishes to inspect must be identified with reasonable precision: Dian at [32]. 55 The effect of O 15 r 18 of the Federal Court Rules is to abrogate this principle insofar as it would apply to a document after it has been read to or by the Court or referred to in open court in such terms and to disclose its contents, unless the Court otherwise orders. 56 Nevertheless, the implied undertaking continues to apply to documents produced on discovery; it also applies to witness statements, affidavits and other documents produced by one side to the other for the purposes of the litigation: Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 at 221-223 (per Wilcox J). 57 Leave of the court to be released from the undertaking in order to use the documents in other proceedings will only be granted in "special circumstances"; they include the nature of the document, the absence of prejudice to the author and the likely contribution of the document to achieving justice in the second proceeding: Springfield Nominees at 225. 58 What underlies the implied undertaking not to use documents obtained in the course of litigation except for the purpose of that proceeding is that a party ought not to use an advantage obtained for the limited purpose of the litigation for a collateral or ulterior purpose: Home Office v Harman at 302 per Lord Diplock. 59 In his speech in Home Office v Harman , Lord Diplock referred at 303 to the inevitable side effect of administering justice in open court and the corollary that persons present in court may use documents that are read out in court for purposes other than the attainment of justice in the particular case. The observations of Moore-Bick J in Dian at [31] are to the same effect. 60 It seems to me to follow from Home Office v Harman that although non-parties are not subject to the implied undertaking, they are subject to the same type of restriction in relation to documents that have not been read in open court, or at least considered by the judge as evidence or submission. After all, why should a non-party, by the side-wind of access to a court file, be free from the constraint which applies to the persons who supplied the contents of the file? 61 It also seems to me that this restriction informs the requirement of leave to inspect the categories of documents referred to in O 46 r 6(3) and the approach taken in the authorities which draw a distinction between access to documents admitted into evidence and those which are not. 63 Although Sackville J said in Seven Network at [27] that a convenient "touchstone" for the grant of access is whether the material has been admitted into evidence, the effect of his Honour's judgment is that this is a general rule which will serve the interests of open justice; but all the circumstances must be considered. 64 Here, the application is not made in furtherance of the principle of open justice. It uses, as a springboard, the corollary to which Moore-Bick J referred in Dian , namely that persons present during a court hearing may learn of information they can use to their advantage. But in truth it goes further because it seeks "access to justice" based upon the modern approach to commercial litigation with its emphasis upon creation, and preservation of large volumes of written material, much of which is not read out in open court. Finkelstein J referred to this in ACCC v ABB at [4] --- [5]. 65 The difficulty with Merlin's application is that, even in its modified form, it is not confined to affidavits which were admitted into evidence. It extends to discovery documents and files obtained on the execution of Anton Piller orders, which do not appear to form part of the court file. 66 All of the documents referred to in O 46 r 6(2) and (3) are documents which are typically filed in the Registry. Order 46 r 6(4) and (5) deal with other documents. 67 In my view, the prohibition against a non-party inspecting exhibits, tender bundles and other documents which may be located in the Registry is covered by O 46 r 6(4). They fall within the expression in that sub-rule "any document in the proceeding that is not referred to in sub-rule (2) or (3). " Access may only be granted with leave. 68 It seems to me that the distinction drawn in O 46 r 6(4) recognises that access may be sought to documents which are not filed or lodged with the Registry. Typically, these documents will be exhibits. Access may be sought while they are in the Registry, but ordinarily they will only remain there during the course of the trial and for a period of 21 days after judgment, that is to say after the appeal period has expired. 69 The usual practice used to be for the court to order that exhibits may be returned after the expiration of the appeal period. No doubt this was done in recognition of the fact that exhibits are the property of the party who tendered them. It is not the function of the Registry to preserve exhibits long after the expiry of appeal periods or after appeal books have been prepared. 70 I have not been able to determine whether an order for the return of exhibits was made in the Kazaa proceedings. But even if it were not, I would not be prepared to grant access to documents, other than affidavits or documents falling within O 46 r 6(3). This is because the exhibits and other documents are the property of the parties who tendered them, in proceedings now long since defunct. If they are still present in the Registry, this is only because the Registry has failed to return documents no longer required for the proper purpose of the functions of the Court: see [45] above. 71 Nor is "access to justice" an appropriate gateway for an application to exhibits, discovery documents and the like. The Court has ample power to order pre-trial discovery under O 15A. Ms Robb has acknowledged that Merlin may have difficulty in making an application under that Rule. 72 It seems to me that the appropriate exercise of my discretion in the present case is to order access to the affidavits identified by Merlin but not to the other documents: see [21](a) above. Access will be granted only to the body of the affidavits because the exhibits remain the property of the parties for the reasons mentioned above. Access will not be granted to those parts of the affidavits which were not read, or to which objection was upheld. 73 This seems to me to be consistent with the approach taken by Cowdroy J in Churche v Australian Prudential Regulation Authority (No 3) [2006] FCA 1168 at [26] . His Honour granted access to affidavits admitted into evidence, but access was otherwise refused. Access was granted to annexures but they form part of the affidavit and are to be distinguished from exhibits in the proceedings. 74 Dr Bell pointed to [64] --- [66] of the judgment of Wilcox J in which his Honour referred to the evidence of Mr Johnsen, stating that it contained evidence of routine downloading of ARIA Top 50 and Top 100 recordings. Dr Bell referred me to the decision of Heerey J in Dawson Nominees v Multiplex (2007) 64 ACSR 53 at [30] to support the proposition that access to the exhibits to the affidavits ought to be granted. But the observations of Heerey J in Dawson Nominees v Multiplex are not a charter for access to documents by non-parties. His Honour's remarks were made in the context of existing proceedings where the documents had potential relevance to the issues in the litigation. 75 So too in Dian , the documents were sought for the purpose of obtaining information of potential use in litigation that was already on foot. It was not to determine whether a case may be launched, and if so, by whom. 76 Mr Cobden submitted that I ought not to grant access to Ms Ball's affidavits. It is true that Ms Ball made copies of sound recordings in circumstances in which she obtained the protection of s 104 of the Copyright Act 1968 (Cth). However, I do not think that the grant of access to those parts of her affidavit which were read in evidence would put her in breach of that provision, or in breach of the implied undertakings pursuant to which she obtained and used the material. 77 I will not allow access to the digital music files discovered by the Sharman respondents, or to the digital files seized from the universities. They are not part of the Court file and they do not appear to have been admitted into evidence. Particular caution is required before granting access to this class of documents: Re Bond; Ex parte Hongkong Bank [1999] FCA 403 at [4] (per Hely J). 78 The "Applicant's' Main Tender Bundle" may have been admitted into evidence but it was a compilation of exhibits and is therefore covered by what I said above about the property in those documents. 79 The same approach is applicable to the appeal books. Access will be obtained by Merlin to the body of the affidavits but the balance of the appeal books (other than pleadings and other documents otherwise available under O 46 r 6(2)) merely reproduce exhibits and transcript. 80 I will grant access to the transcript but will not permit photocopying. 81 I recognise that there are references in some of the exhibits mentioned above to recordings made by Merlin artists. But these references were apparently to matters which did not form part of the subject matter of the Kazaa proceedings. I do not see that open justice requires access to those matters. Nor does "access to justice" support it. 82 Finally, I have considered the submission that access ought to be refused to any of the documents on the ground of delay. One of the parties submitted that the delay would cause prejudice to it. This would appear to be based upon the difficulty of meeting claims of copyright infringement arising from evidence about the downloading of material some four years ago. However, I do not think that the suggestion of prejudice was supported by evidence which would justify the refusal of access to affidavits that were admitted into evidence or to the transcript of the hearing. 83 The parties are to bring in short minutes reflecting my reasons. I will hear brief argument on costs and on conditions for access. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | non-party applied to inspect court file of defunct proceedings application for inspection made for the purposes of litigation where orders for preliminary discovery would not be available application for inspection not limited to documents admitted into evidence leave to inspect ordinarily to be granted except where the interests of justice require otherwise open justice access to justice leave to inspect limited to affidavit material admitted into evidence exhibits not the property of the court leave to inspect exhibits refused procedure |
The first relates to a disputed claim of legal professional privilege; the second is whether leave to amend the applicant's reply should be granted. 1. Hamilton tendered in its case five emails from Lo & Lo, a Hong Kong law firm, to its own legal advisers together with attached invoices of sales of Hamilton products alleged to have been the subject of parallel importation into Hong Kong. Lo & Lo's client, Forward Company, is being sued by AMC in Hong Kong in separate proceedings arising out of the alleged parallel importation. The invoices in question were issued by Forward Company. 4 When Hamilton sought to tender the emails, objection to the tender was taken by AMC on the grounds that the tender would be unfair unless the email from Hamilton's lawyers which elicited the responses from Lo & Lo was also tendered. Hamilton indicated that it would claim privilege in any event in its lawyers' email. The short question now before me is whether in the circumstances privilege attaches to that email. For present purposes I am prepared to assume that the email could attract client legal privilege under s 119 of the Evidence Act 1995 (Cth). I should emphasise that because the question is whether the email ought to be adduced into evidence as part of the tender of the responsive emails, the matter falls to be resolved under the provisions of the Evidence Act and not at common law. 6 Put shortly, AMC's case is that it is necessary for a proper understanding of what Lo & Lo produced to understand what they were asked to produce by the respondent. Hamilton's contention is that the invoices speak for themselves and it is not necessary to have the Hamilton email disclosed to understand those invoices. 7 Section 126 has been the subject of little judicial consideration although it has been usefully considered by Sackville J in Towney v Minister for Land and Water Conservation (NSW) (1997) 76 FCR 401. For present purposes it is sufficient if I note that in that case his Honour indicated that the section contemplated the application of an objective standard. The dictionary definition of "proper" includes "complete or thorough"; the definition of "understand" includes "to apprehend clearly the character or nature of" and "to grasp the significance, implications or importance of" (Macquarie Dictionary). It may or may not be correct to say that the test stated in s 126 of the Evidence Act , is, or appears to be, narrower than the principles governing implied waiver under the general law: cf Cross on Evidence (Aust ed), par 25300. Any precise assessment of the scope of s 126 must await further decisions. However, I think it fair to say that, if a privileged document is voluntarily disclosed for forensic purposes, and a thorough apprehension or appreciation of the character, significance or implications of that document requires disclosure of source documents, otherwise protected by client legal privilege, ordinarily the test laid down by s 126 of the Evidence Act will be satisfied. 8 While it is true that each of the invoices on its face requires no explanation of its contents (other than the need for translation from Chinese), the invoices themselves bear upon a number of potential questions. There is sharp disagreement between the parties over the incidence, effects and duration of the alleged parallel importation. The invoices that have been produced relate to a quite confined period in 2001 and 2002. For my own part I am satisfied that the significance properly to be attributed to them can only be discerned if one also is aware of the nature of the request that was addressed on Hamilton's behalf to Lo & Lo. Whether it was quite specific or quite general in character, for example, could markedly affect how one would forensically evaluate the significance of the invoices. Hamilton, having tendered the Lo & Lo emails and attachments, cannot now in my view properly resist putting into evidence its own lawyers' request. 9 In the circumstances I am satisfied that client legal privilege has been lost in relation to that request because the disclosure of the request itself is reasonably necessary to enable a proper understanding of the invoices. 2. The principal oral terms, which might be thought to be inconsistent with express terms, related (a) to what is called the rolling five year term (see clause 8) and (b) to the operation of the termination provision of the agreement (see clause 41). 11 The clause that became clause 50 was proposed by Dr Ovcharenko of Hamilton by a fax of 27 May 1999 to Dr Keung of AMC. That fax referred both to a proposed clause providing a bonus offer to AMC and to the addition of two further clauses including the now clause 50. Both Dr Keung and Dr Ovcharenko were cross-examined on the email and on the termination provision and it was that cross-examination which has led to the application for leave to amend. Dr Ovcharenko's cross-examination, I would note, occurred on the 26 th day of a projected 27 day hearing. For reasons which I need not enter into, a further day was set aside to complete the giving of evidence. That occurred yesterday and it was when the issue of leave was raised with me, albeit it had been flagged I understand to the respondent some time previously. 8.7 AMC was induced by the clause 50 representation to agree to the incorporation of clause 50.1 into the Distribution Agreement to secure the bonus offer. 14 The respondent opposes the amendment on the grounds that to allow it at this stage would be unfair and prejudicial to it. It does not, and could not, dispute that there was cross-examination on the facsimile and on the termination provisions. What it does contend is that that cross-examination was not conducted with a focus upon a pleaded and precise cause of action with the consequence that the evidence adduced and the manner of its adducing did not have the ingredients of a Trade Practices Act claim in mind. 15 It is well accepted that the aim of the court's power to amend under O 13 r 2 of the Federal Court Rules is to allow all the issues which arise in a proceeding to be determined and for a decision to be given on the real matter in controversy. Hence it has been emphasised that amendments to pleadings should be allowed if it not be unjust to do so: see Lactos Fresh Pty Ltd v Finishing Services Pty Ltd [2006] FCA 219 at [122] . The pleadings should have been amended in order to make the facts alleged and the particulars of negligence precisely conform to the evidence which had emerged ... Now, and for many years past, a plaintiff does not fail by being refused leave to amend or through failure formally to apply for amendment, where the evidence has disclosed a case in the cause of action fit to be determined by the tribunal of fact. Particularly is this so when the action finally determines the rights of the parties in the cause of action. 16 Turning to the present matter, it cannot properly be said that the case has been conducted in such a fashion that the amendments should be permitted so that the pleading reflects the conduct of the trial and the issues actually litigated between them. Nonetheless, AMC contends that the relevant evidence establishing the proposed defensive claim is there and is manifest in the cross-examination on that issue to which I have made reference. Accordingly it is said the amendment should be allowed although it is accepted that it may be necessary to permit the respondent to cross-examine further on the proposed claim and its ingredients. 17 While I am satisfied that the particular claim proposed only presented itself during the course of the trial, it is the case that the potential significance of clause 50 was obvious from the outset. Given the course of this proceedings and its considerable lengthening, that the applicant had closed its case and the respondents had called their last witness and that the timetable for submissions etc has been fixed and cannot be varied without a considerably longer delay to the finalisation of this matter, I am unprepared to take a course that would permit further cross-examination and, hence, further delay. 18 It may well be the case that the cross-examination that has been conducted of the two witnesses so far as it goes is suggestive of a possible contravention of s 52 of the Trade Practices Act 1974 (Cth). Nonetheless, I am not satisfied that the evidence that has so far been adduced could properly be said to establish that contravention such that relief under s 87 could be claimed. I equally am satisfied of the real likelihood that the cross-examination of Dr Keung by Hamilton would have been conducted differently especially in relation (a) to the questions of inducement and (b) to Dr Keung's understanding of Dr Ovcharenko's alleged reason for inserting the proposed equivalent of clause 50.1 if it had been conducted with the proposed claim in mind. I equally consider it likely that evidence-in-chief given by Dr Ovcharenko in light of a pleaded s 52 claim could well have been differently focussed. In short I accept Hamilton's submission of prejudice which in the circumstances in my view is not able to be remedied. Accordingly, I refuse leave to amend the reply. 19 However, there is a further proposed amendment to the reply which is not opposed and I will grant leave in respect of it. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | loss of client legal privilege under s 126 of the evidence act 1995 (cth) document reasonably necessary to enable a proper understanding of other documents put in evidence application for leave to amend reply amendment not necessary for the pleadings properly to reflect the conduct of the trial further cross-examination inappropriate in the circumstances amendment sought would cause undue prejudice to the respondent evidence pleading |
The respondent is a member of a group which operates another five hotels in Tasmania. The Group is controlled by Mr Emmanuel Kalis. About 29 staff are employed at the Hotel. 2 The applicant, a workplace inspector appointed under s 167(2) of the Workplace Relations Act 1996 (Cth), alleges that the respondent, in the course of endeavouring to have certain employees at the Hotel sign Australian Workplace Agreements (AWAs), (i) applied duress (contrary to s 400(5)) and (ii) injured them in their employment and/or altered their position to their prejudice for the prohibited reason that they were entitled to the benefit of the Australian Fair Pay and Conditions Standard (contrary to s 792(1)(b) and (c) and s 793(1)(i)). 3 The respondent has now admitted liability. I have already made by consent orders for payments to certain employees and declared two AWAs void. These reasons deal with the issue of penalties and declarations. 4 The following account is based on an agreed statement of facts submitted by the parties. Mr Kalis became the hotel licensee. A number of employees, including the Relevant Employees identified below, who had worked at the Hotel under the previous management moved across to the employ of the respondent on the same terms and conditions. 6 The respondent was bound by an award known as the Hospitality Industry - Accommodation, Hotels, Resorts and Gaming Award 1995 (the Award) in respect of all persons employed by it who performed work covered by the Award. • Debby Maree Hyland, Bar Gaming Attendant. • Sharon Ann Thompson, Cleaner and Bar Gaming Attendant. • Karen Mary Lucas, Cleaner and Bar Gaming Attendant. • Fabian Di Domenico, Bottle Shop Attendant. Another hotel controlled by the Group, the Black Buffalo Hotel, had staff on AWAs. 10 The respondent's management believed that the Hotel staff were not well trained and had been "babied" under the previous management. The respondent wanted to change the culture at the Hotel and ensure that the business would be profitable. The previous management had said they had never made a profit on food at the Hotel. The respondent believed that there was no reason why meals should not be profitable. After studying the figures for wages as a percentage of turnover, the respondent wanted to do away with the penalty rates under the Award and move to a flat hourly rate of pay. The respondent knew that the new workplace laws were soon to take effect and that under those laws, AWAs offered it an opportunity to implement this objective. The respondent wanted to introduce the AWAs as soon as it could do so under the new laws. 11 The new laws came into force on 27 March 2006. In May and June the Property and Accounts Manager of the Group, Ms Margi Jeffrey, held a number of meetings with a Legal Officer from the Australian Hotels Association --- Tasmanian Branch (the AHA), an employer association of which the respondent was a member. In the meetings Ms Jeffrey on behalf of the respondent briefed the AHA about the respondent's proposal to introduce AWAs and their content. She instructed the AHA to draft an AWA. 12 On 20 June the AHA sent a draft AWA, together with some documents produced by the Office of the Employment Advocate (OEA), namely the "Australian Fair Pay and Conditions Standard Fact Sheet" and the "Employer's Guide to Making an Australian Workplace Agreement". 13 On 22 June the AHA Legal Officer had a discussion with Ms Jeffrey about the content of the AWA. The Legal Officer drew her attention to the need for the flat rate of pay to be equal to or higher than the minimum wage under the Australian Fair Pay and Conditions Standard. 14 Ms Jeffrey conferred with Mr Kalis to secure final approval of the content of the AWA and conveyed this back to the AHA. 15 On Friday 30 June the Legal Officer had another conversation with Ms Jeffrey. The latter said that she did not expect that many of the Hotel staff would sign an AWA and that the AWA would mainly be for new staff. The Legal Officer told Ms Jeffrey that the respondent needed to be careful to ensure that AWA employees were not favoured over those who remained on the Award. Later the same day the Legal Officer sent to the respondent a final version of the AWA. 16 On Monday 3 July the respondent received from the AHA various OEA documentation, including a document titled "Information Statement for Employees --- Australian Workplace Agreement" and "Employer's Guide to Making an Australian Workplace Agreement", fact sheets and various OEA guide sheets as to the lodgement and approval process. An employee who worked on a family holiday would be paid their ordinary rate of pay plus an additional 50%. (Under clause 15.2.2(d) of the Award a casual employee is entitled to a penalty rate for work on a public holiday of 150 per cent in addition to their entitlement under the preserved APCS to a basic periodic rate of pay and casual loading. The only information to employees came from the documentation itself. The respondent decided to leave the staff to read the material themselves. 21 On 10 July Mr John Barry commenced employment with the respondent as the Hotel Manager at the Hotel. He was given the full responsibility for running the Hotel, including managing staff and rosters. He was employed by the respondent to work as the Manager at the Hotel because of his experience in the industry. The respondent was aware of his experience as it had previously employed him as a Manager at the Hotel and also at the Black Buffalo Hotel. 23 At this stage Ms Bruce had been an employee at the Hotel for approximately 8.5 years. From 2001 she had worked a regular shift pattern on Mondays to Fridays each week. She started at either 9 am or 11 am (depending on the day) and always finished at 3 pm. She was a single mother and had to leave to collect her daughter from school. On Thursdays she often worked till 4 pm on occasions when a friend could pick up her daughter. From late May 2006 she did not work Mondays. Ms Bruce had previously made it known to hotel management, including Mr Barry, how her parenting responsibilities impacted on her finish times. 24 In accordance with the preserved APCS, Ms Bruce was paid an hourly rate of $17.91 for all hours she worked, being a flat rate which included $13.432 in respect of the basic periodic rate of pay and the 25 per cent casual loading. 25 Ms Bruce, like most of the other staff at the Hotel, knew that AWAs were coming, as there had been talk of it amongst the staff, particularly in the previous couple of weeks. When she picked up the AWA she said to Ms Joy Hills, the Office Administrator at the Hotel, that she was not going to sign the AWA. Ms Hills told her "Anyone who doesn't sign it will get their hours cut". 26 On reading the AWA Ms Bruce had a number of concerns. She objected to the flat rate of $17.50 at level 3 (the rate in the AWA which applied to her work) with no penalties. She read the Information Statement and noticed that employees were supposed to have a choice whether or not they would sign an AWA. She decided she was not going to sign it and in that week she informed Ms Hills accordingly. 27 In the week or so that followed, a number of casual staff signed AWAs. Ms Bruce still had not signed hers. Mr Barry was aware of this. 28 Around 14 or 15 July Mr Barry took Ms Bruce aside in the lounge bar and showed her the roster for the next fortnight's shifts. He had rostered her to work less hours than she had normally worked. He also had rostered her to work a Wednesday shift (19 July) between 12 noon and 5 pm. Ms Bruce told Mr Barry that she could not work that shift because she had to pick her daughter up from school. Mr Barry also had her down for a Thursday shift (20 July) between 9 am and 4 pm. She told him she could not work till 4 pm that day, for the same reason. 29 Mr Barry rostered Ms Bruce on less shifts and rostered her to work uncongenial shifts because she had not signed the AWA. He knew that the changes would not suit her and that she would probably reject the later finishing shifts, as she subsequently did. Of the hours that Ms Bruce normally worked before the roster change, Mr Barry worked some of them himself, and gave some hours to other employees, including Adele Elliott, who by that stage had signed an AWA and wanted more shifts as compensation for lost penalty rates. 30 By his conduct Mr Barry placed illegitimate pressure on Ms Bruce to sign the AWA. He knew that she would quickly feel the financial impact of reduced shifts. He knew that she would feel that she had no practical choice but to sign the AWA if she wanted to maintain her employment with the respondent without an immediate and significant reduction in earnings through less shifts. 31 Before Mr Barry's conduct, Ms Bruce had a reasonable expectation of continuing to work her normal hours and receive her entitlements under the Award and the preserved APCS. By his conduct, Mr Barry removed that reasonable expectation by placing her in a position where she had to choose between signing the AWA (and earning a lower hourly rate) or not signing the AWA (and having her hours cut back). This injured Ms Bruce in her employment and prejudicially altered her position in employment. The reason Mr Barry engaged in this conduct was because Ms Bruce was entitled to the benefit of the Award and the preserved APCS. 32 Ms Bruce did not sign an AWA with the respondent. 33 As a result of the respondent's conduct, Ms Bruce lost shifts and remuneration amounting to $62.69. 35 At the time, Ms Hyland had worked at the Hotel for approximately 20 years. Since 1997 she had worked the same hours every week, Tuesdays and Thursdays 9 am to 2.30 pm, Wednesdays and Fridays 11 am to 2.30 pm and Saturday 9 am to 4 pm. In accordance with the preserved APCS, she was paid an hourly rate of $17.91 for all hours she worked, being a flat rate which included $13.432 in respect of the basic periodic rate of pay and the 25 per cent casual loading. 36 Ms Hyland read the AWA when she got home that night. She thought it was a "rotten deal" because her hourly rate was to be reduced to $17.50 and there was no higher rate. She thought she ought to get more money, not less. 37 On 11 July Ms Hyland returned the AWA unsigned to Ms Hills, saying "Here's my AWA. I haven't signed it". 38 Around this time, a number of casual staff had signed the AWA. Ms Hyland still had not signed it. Mr Barry was aware of this. 39 On 14 July Mr Barry met with Ms Hyland to discuss her rostered hours. The discussion took place in the dining room at the Hotel. He told her, "I've been sent here to be the bad guy". He then showed her the roster for the two week period beginning Monday 17 July. He had rostered her for less hours than what she had worked every week since 1997. He had also varied her hours on Thursdays such that she was due to finish after her normal finish time of 2.30 pm. 40 Ms Hyland told Mr Barry that she was not able to work the shifts that went past 2:30 pm because she had to pick up her son from school as they did not live on a bus route. Mr Barry crossed her off the roster for the two Thursday shifts to be worked in that fortnight period. 41 Mr Barry rostered Ms Hyland on less shifts and rostered her to work uncongenial shifts because she had not signed the AWA. He knew the changes would not suit her so he expected her to reject the changed roster. When she did he further reduced her rostered hours, removing her from the two Thursday shifts. He worked some of these shifts himself and also gave other shifts to other employees including Ms Elliott, who had signed the AWA and wanted more shifts as compensation for lost penalty rates. 42 By changing the roster in a way that he did, Mr Barry deliberately reduced Ms Hyland's hours because she had not at that point signed the AWA. By this conduct, he placed illegitimate pressure on her to sign the AWA. He knew that she would quickly feel the financial impact of reduced shifts. He knew that she would feel that she had no practical choice but to sign the AWA if she wanted to maintain her employment with the respondent without an immediate and significant reduction in earnings through less shifts. 43 Before Mr Barry's conduct, Ms Hyland had a reasonable expectation of continuing to work her normal hours and receiving her entitlements under the Award and the preserved APCS. By his conduct, Mr Barry removed that reasonable expectation when he placed Ms Hyland in a position where she had to choose between signing the AWA (and earning a lower hourly rate) or not signing the AWA (and having her hours cut back). This injured Ms Hyland in her employment and prejudicially altered her position in employment. The reason Mr Barry engaged in this conduct was because Ms Hyland was entitled to the benefit of the Award and the preserved APCS. 44 Ms Hyland never signed the AWA. 45 As a result of this conduct, Ms Hyland lost shifts and remuneration amounting to $275.84. 47 At this time Ms Thompson had been working at the Hotel since February 2005, initially as a Cleaner, but in recent times she had some shifts as a Bar and Gaming Attendant. She had been working between 30 to 35 hours per week, including regular evening shifts and weekend work. She did cleaning shifts on Saturdays and Sundays which, with penalty rates, made up most of her weekly pay. She was working shifts in the Bar and Gaming area, usually two evening shifts, and had recently been rostered for Sunday shifts. 48 In accordance with the preserved APCS, Ms Thompson was paid an hourly rate of $17.31 for all hours she worked, being a flat rate which included $12.982 in respect of the basic periodic rate of pay and the 25 per cent casual loading. On top of this flat rate, Ms Thompson was receiving penalty rates for working evening, Saturday and Sunday shifts in accordance with her entitlement under the Award. 49 Ms Thompson saw that under the AWA she was to get a fixed hourly rate of $17.50 with no penalties. She did not want to sign the AWA because she knew it would mean less money for her, given the wages she was used to earning from working her usual hours and the casual loading and penalty rates that applied. Given the nature of the work performed by Ms Thompson after she signed the AWA, she would have been entitled, in accordance with the preserved APCS, to be paid an hourly rate of $17.91 for all hours she worked, being a flat rate which included $13.432 in respect of the basic periodic rate of pay and the 25 per cent casual loading. 50 In the week commencing 10 July Mr Barry told Ms Thompson that people who signed an AWA would get work, and those that do not, would not get work. He said that those who did not sign the AWA would get their hours cut. 51 A day or so later Mr Barry approached Ms Thompson again to ask her whether she had signed the AWA. She told him that she had not, that she was still thinking about it and that she wanted to speak with senior management to discuss some of her concerns. In response, Mr Barry became quite aggressive and forceful and repeated that if she did not sign the AWA, she would lose hours. He again said that those employees who did not sign the AWA would not get work. 52 Later in the week beginning 10 July Ms Thompson again approached Mr Barry to ask him about her hours. She asked him what hours she would get if she signed the AWA and how many hours she would lose if she did not sign the AWA. Mr Barry would not give her a direct answer to her questions. He just kept saying that those who signed would get more hours. As she did not understand how this would work, Ms Thompson questioned him further. In response, Mr Barry became angry and repeated that those who signed would get more hours and those who did not would lose their hours. 53 Ms Thompson was upset and in tears and thought about leaving the Hotel. She felt bullied and threatened. After this conversation, Mr Barry came up to her and said that it was the same for everybody. He then he just walked away. After this, Ms Thompson tried to stay out of Mr Barry's way and continued to work her cleaning shift. 54 In the week beginning 17 July Mr Barry approached Ms Thompson again to see whether she had signed the AWA. Ms Thompson was working on a cleaning shift with another employee, Karen Lucas. Ms Thompson said no, she had not signed the AWA. Mr Barry got very angry and shouted at both Ms Thompson and Ms Lucas saying that if they did not sign the AWA they would not be getting any work. 55 Later that week Ms Thompson went to see Ms Jeffrey and complained about Mr Barry's behaviour. Ms Thompson told her that Mr Barry was very forceful and that he told her that she would lose work if she did not sign the AWA. Ms Thompson said that she felt that Mr Barry was bullying and threatening her. Ms Jeffrey said that Mr Barry should not have done this. Ms Jeffrey seemed cross at hearing this. Ms Thompson expressed concern about losing lots of money by losing weekend work if she did not sign the AWA. Ms Jeffrey said that she did not have to sign the AWA if she did not want to, but that if she did not sign the AWA, she (Ms Jeffrey) could not guarantee that she would not lose work. 56 Ms Jeffrey also suggested to Ms Thompson that she talk with Ms Sice, the Hotel Manager at the Black Buffalo Hotel, who might be able to get work for her there. Soon after the meeting with Ms Jeffrey, Ms Thompson met with Ms Sice. During this meeting Ms Sice suggested that both Ms Thompson and Ms Lucas meet with Mr Barry to sort out their issues. Ms Thompson left that meeting under the clear impression that if she did not sign the AWA she would lose shifts. 57 Late in the week commencing 17 July, around the 20 th , Ms Thompson again approached Mr Barry and said she was still unsure about signing the AWA. She was in tears. Mr Barry said it was up to her as to whether or not she signed the AWA. 58 On 21 July Mr Barry called Ms Thompson and told her not to come into work on the weekend for a rostered cleaning shift as this shift had been taken away from her. He said that he had contractors organised to come in and do the cleaning on the weekend. 59 Mr Barry knew that Ms Thompson needed the money she earned for working the cleaning shifts on the weekend. 60 On 24 July Ms Thompson came to work to do a cleaning shift. She saw that her roster for this week had been changed. During the previous week she had noted that the roster for the week beginning 24 July had her doing evening shifts in the Bar and Gaming area on Monday, Tuesday and Wednesday of that week. But on 24 July she saw that the roster had been changed to remove her from the Monday and Wednesday bar shifts. 61 Mr Barry changed the roster to remove the shifts from Ms Thompson because she had not signed the AWA. 62 On 25 July Ms Thompson met with Mr Barry and asked him whether he was willing to have a meeting with her, Ms Sice and Ms Lucas. Mr Barry agreed and the meeting was held that afternoon. Mr Barry told Ms Thompson to bring back the AWA signed or unsigned. 63 Mr Barry said that if Ms Thompson had decided not to sign the AWA, then she could not expect to work weekend and evening shifts. 64 On 26 July, feeling that she had no real alternative at that stage, Ms Thompson signed the AWA. Ms Thompson had already lost shifts and was concerned that if she did not sign the AWA, she would lose more shifts. 65 By his conduct Mr Barry deliberately placed illegitimate pressure on Ms Thompson to sign the AWA. He knew that she would quickly feel the financial impact of reduced shifts. He knew that she would feel that she had no practical choice but to sign the AWA if she wanted to maintain her employment with the respondent without an immediate and significant reduction in earnings through less shifts. 66 Before Mr Barry's conduct, Ms Thompson had a reasonable expectation of continuing to work her normal hours and receive her entitlements under the Award and the preserved APCS. By his conduct Mr Barry removed that expectation by placing Ms Thompson in a position where she had to choose between signing the AWA (and earning a lower hourly rate) or not signing the AWA (and having her hours cut back). This injured Ms Thompson in her employment and prejudicially altered her position in employment. The reason Mr Barry engaged in this conduct was because Ms Thompson was entitled to the benefit of the Award and the preserved APCS. 67 As a result of this conduct, Ms Thompson lost shifts while she had not signed the AWA and after she signed the AWA she lost remuneration amounting to $3939.06. 69 On 12 July Ms Lucas returned from a period of annual leave. Ms Hills told her that she needed to return the AWA. Ms Lucas said that she wanted to look at it before deciding whether or not she would sign it. 70 Ms Lucas has been employed at the Hotel since about March 2003, initially as a Cleaner. In accordance with the preserved APCS, she was paid an hourly rate of $17.31 for all hours she worked, being a flat rate which included $12.982 in respect of the basic periodic rate of pay and the 25 per cent casual loading. She worked weekdays and every second Saturday. She worked public holidays when they fell on a weekday. 72 Sometime in the week beginning 17 July Mr Barry approached Ms Lucas, who was doing a cleaning shift with Ms Thompson at the time, to enquire whether she had signed the AWA. Ms Lucas replied that she had not. In reply Mr Barry got very angry and shouted at both Ms Lucas and Ms Thompson that if they did not sign the AWA, they would not get any work. 73 On 26 July, feeling that she was in a "no win situation" at that stage, Ms Lucas signed the AWA. She had already lost shifts and was concerned that if she did not sign the AWA, she would lose more shifts. Once she signed the AWA, Ms Lucas got more cleaning shifts. A declaration receipt was issued by the OEA on 7 August 2006. 74 By his conduct, Mr Barry deliberately placed illegitimate pressure on Ms Lucas to sign the AWA. He knew she would quickly feel the financial impact of reduced shifts. He knew she would feel that she had no practical choice but to sign the AWA if she wanted to maintain her employment with the respondent without an immediate and significant reduction in earnings through less shifts. 75 Before Mr Barry's conduct Ms Lucas had a reasonable expectation of continuing to work her normal hours and receive her entitlements under the Award and the preserved APCS. By his conduct Mr Barry removed that reasonable expectation by placing Ms Lucas in a position where she had to choose between signing the AWA (and earning a lower hourly rate) or not signing the AWA (and having her hours cut back). This injured Ms Lucas in her employment and prejudicially altered her position in employment. The reason Mr Barry engaged in this conduct was because Ms Lucas was entitled to the benefit of the Award and the preserved APCS. 76 As a result of Mr Barry's conduct Ms Lucas lost shifts during the period in which she had not signed the AWA and after she signed the AWA, she lost remuneration amounting to $1526.86. He started working at the Hotel in around April 2006. 78 Initially he worked at least three shifts per week including a weekend shift. The weekend shifts were for 3 to 5 hours per day, depending on how busy things were. He was averaging around 15 to 20 hours per week. In accordance with the preserved APCS, Mr Di Domenico was paid an hourly rate of $17.91 for all hours worked, being a flat rate which included $13.432 in respect of the basic periodic rate of pay and the 25 per cent casual loading. In addition, Mr Di Domenico was paid penalty rates for working on Saturdays in accordance with his entitlement under the Award. 79 In early July the respondent's Bottle Shop Manager, Mr Stephen Bishop, handed an AWA to Mr Di Domenico. He later read the AWA. He thought it was unfair. He did not want to sign it. No-one followed him up on it so he did nothing about it. 80 Some time in July Mr Barry approached Mr Bishop. He asked him whether Mr Di Domenico had signed an AWA. Mr Bishop told Mr Barry that Mr Di Domenico was the only bottle shop employee who had not signed an AWA. Mr Barry directed Mr Bishop to cut Mr Di Domenico's hours back and to just give him day shifts, no weekends or nights. 81 Mr Bishop reduced Mr Di Domenico's hours and did not roster him on weekends. Mr Bishop regarded Mr Di Domenico as a good worker, so restricting his hours was not something he wanted to do. On a number of occasions after Mr Barry's direction, Mr Bishop wanted to use Mr Di Domenico on shifts that would have attracted penalty rates. However, because of Mr Barry's direction, Mr Bishop did not roster Mr Di Domenico on shifts that attracted penalty rates. 82 In September or October Mr Di Domenico approached Mr Bishop while he was preparing a roster. Mr Bishop said he wished Mr Di Domenico would sign the AWA so he could give him more hours. In response, Mr Di Domenico said that he was not going to sign the AWA. Mr Bishop said if he did not sign the AWA, he would just sit on day shifts and not get anywhere. 83 Before Mr Barry's direction Mr Di Domenico had a reasonable expectation of continuing to work his normal hours and receive his entitlements under the Award and the preserved APCS. At Mr Barry's direction, this reasonable expectation was removed and Mr Di Domenico was injured in his employment and had his position in employment prejudicially altered by losing the night and weekend shifts that he was normally employed to work. The reason Mr Barry engaged in this conduct was because Mr Di Domenico was entitled to the benefit of the Award and the preserved APCS. Mr Di Domenico did not sign the AWA. 84 As a result of Mr Barry's conduct, Mr Di Domenico lost shifts. He suffered loss amounting to $1008.77. He was employed as the Hotel Manager and was given the responsibility of running the Hotel and handling all staff issues. 86 Other representatives of the respondent knew that Mr Barry was following up the Relevant Employees about the AWAs and failed to take any steps to ensure that he did not do this in an unlawful way. 87 One of the representatives of the respondent responsible for introducing the AWAs was Ms Jeffrey. As already mentioned ([55] above), late in the week commencing 17 July Ms Thompson specifically brought Mr Barry's conduct to Ms Jeffrey's attention. Despite this, no representative of the respondent took any action to stop Mr Barry from engaging in conduct which was plainly unlawful, or even to warn him. Indeed, at the meeting even though Ms Jeffrey expressed disapproval of Mr Barry's conduct she nevertheless reinforced the respondent's consistent message: no AWA means less work. Ms Hills, the Office Administrator at the Hotel, told Ms Bruce "anyone who doesn't sign it will get their hours cut". Mr Bishop enforced the policy in relation to Mr Di Domenico, albeit reluctantly. Ms Sice referred Ms Thompson and Ms Lucas back to Mr Barry. In Mr Di Domenico's case there is only a contravention of s 792. 90 In the case of Ms Thompson, the agreed facts disclose six separate occasions when duress was applied and when, at the same time, there was injury in employment. The question arises whether as the respondent argues, there was, in respect of each statutory provision, only one contravention constituted by a course of conduct or whether there were six separate contraventions. 91 In my opinion, the latter is the correct characterisation. The statutory provisions are not directed to a continuing state of affairs, but rather conduct which answers a particular description. If there are episodes of conduct distinct in time or place, albeit related and engaged in with the same purpose, there will be separate contraventions. To take an example discussed in argument, if an employer on each morning of a week threatened to assault an employee if he did not sign an AWA, there would be a contravention on each day. The evidence in relation to Ms Thompson is in essence no different: cf Carr v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2005] FCA 1802 at [12] and [16]. However, before penalties are finally fixed in respect of all contraventions, and not just those concerning Ms Thompson, I must look at the totality of all the unlawful conduct: Mill v The Queen [1988] HCA 70 ; (1988) 166 CLR 59 at 63, Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 281 at [14]. 92 Counsel agreed that the appropriate course would be to make declarations in respect of all contraventions, but to impose penalties only in respect of the duress (s 400(5)) contraventions, those being the more serious. In respect of Mr Di Domenico there will be a penalty for a s 792 contravention. 93 In the result there are ten contraventions for which penalties must be imposed, six in respect of Ms Thompson and one each in respect of Ms Bruce, Ms Hyland, Ms Lucas and Mr Di Domenico. Similarly, in respect of the contravention of s 792 the maximum penalty is 300 penalty units: s 807(2). Under s 4AA of the Crimes Act 1914 (Cth) the penalty unit applicable is $110, making the maximum possible penalty for each contravention $33,000. 95 Two aspects may be noted. First, these penalties were increased very substantially, from $10,000, in 2004: schedule 3 Workplace Relations Amendment (Codifying Contempt Offences) Act 2004 (Cth). As to the seriousness with which the legislature views such contraventions, this increase "speaks for itself": Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 at 242. 96 Secondly, in s 407(2) the current Act prescribes different penalties for different contraventions. There are two levels, 30 or 60 penalty units. The contraventions presently under consideration attract the higher level. 98 For the year ended 30 June 2006, the last year for which accounts have been completed, the respondent's net profit after tax was $146, 219. For the year ended 30 June 2007, the comparable figure is estimated to be $113,026. 99 Those figures would suggest that the respondent itself is a relatively modest enterprise. There is no evidence as to the assets or income of the Group. The only significance therefore, for present purposes, of the respondent's membership of a larger group is that one can attribute a reasonable degree of commercial knowledge and sophistication to those in control. As to the respondent's own financial position, however, in considering the size of a penalty, capacity to pay is of less relevance than the objective of general deterrence: Leahy (No 2) at [9]. In any event, to the extent that financial hardship might mitigate what would otherwise be an appropriate penalty, such an argument would need to be based on evidence. Apart from the income figures mentioned above, which were advanced from the Bar table, no such evidence was forthcoming. 100 No previous contraventions are alleged. Their terms were self-evidently less beneficial than the preserved Award terms to which the Relevant Employees were legally entitled. The respondent would have been well aware of the likelihood of employees declining to enter into agreements so obviously against their own interests. The respondent set out to overcome this problem by adopting a deliberate policy of manipulating the work rosters. To the knowledge of the respondent, the Relevant Employees were low-paid, vulnerable workers. Some of them had family responsibilities which affected the hours and times they could work. This was seen by the respondent as a weakness to be exploited. 102 This policy was implemented by Mr Barry in a cynical and brutal way. As counsel for the applicant correctly submitted, Mr Barry's conduct can be characterised as deliberate, targeted, sustained and aggressive. Ms Thompson was reduced to tears. Ms Hyland and Ms Bruce had family responsibilities which Mr Barry did not just ignore; he took advantage of them. 103 In a small, intimate workplace like the Hotel, the conduct of the respondent can be taken to have had a significant intimidatory effect on other employees; cf Canturi v Sita Coaches Pty Ltd [2002] FCA 349 ; (2002) 116 FCR 276 at [91] . The respondent must have been aware of this advantage for the implementation of its policy. It was said that Mr Kalis had gone to Greece on holiday and decided that Mr Barry, a person of long experience in the hotel industry, would be left in charge of the Hotel. 105 This proceeding was commenced on 31 October 2006. It was initially fixed for a four day trial commencing on 27 August 2007. The respondent had filed a number of affidavits in opposition to those of the applicant. I was told that negotiations for a possible admission commenced in June. The Court was not firmly advised until mid August that a full trial on liability would not be needed. (2) A plea of guilty is not of itself a matter of mitigation where it does not result from any of the above motives, but only from a recognition of the inevitable, or is entered as the means of inducing the prosecution not to proceed with a more serious charge. (3) In cases falling within (1), the judge is not bound to make a reduction, but should consider the plea with all the other relevant factors in arriving at a proper sentence. (4) In assessing the weight to be attached to a plea of guilty as a factor making for leniency, it is proper for the judge to bear in mind that it is important to the administration of justice that guilty persons should not cause expense to the public and delay to other causes by putting forward false stories and on the basis of such false stories contesting the charges against them. (5) The above propositions are not to be taken as weakening in any way the principle that there must be no increase in the sentence which is appropriate to the crime because the offender has contested the charge. Also the employees have been saved the stress of having to give evidence about unpleasant events. On the other hand, the admission came at a late stage and after substantial costs had been incurred. 108 However, such mitigation as may have been obtained by an admission of liability was somewhat lessened by the submission that the respondent should get a "further discount" because it was giving up a possible defence. It was not, so the argument went, "bowing to the inevitable". Mr Barry was, in the time-honoured metaphor, engaging in "a frolic of his own" (a catchy phrase coined by Parke B in Joel v Morison (1834) 6 Car & P 502 at 503 and explained by Diplock LJ in Morris v C W Martin & Sons Ltd [1966] 1 QB 716 at 733-734). If there had been apportionment, it was said, Mr Barry would be 70 per cent liable, as against 30 per cent for the respondent. 109 To my mind, such an argument almost amounts to an aggravation. Mr Barry was a senior employee of the respondent. His conduct was within the scope of his actual or apparent authority, it being the normal function of a hotel manager, either personally or by delegation, to negotiate employment terms with staff and arrange staff rosters. Section 826 has the effect that his conduct is to be taken for the purposes of the Act to have been engaged in also by the respondent. 110 In the circumstances of the present case, s 826 does not operate as some technical or artificial deeming provision. In reality, for those employed at the Hotel, Mr Barry was the respondent: cf Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 509-511 . Obtaining signatures to the AWAs was not a private benefit for Mr Barry but something from which the respondent itself would profit. 112 It was not only Mr Barry who was aware of and implemented the policy; see [86]-[87] above. 113 At the most, a modest discount for admission of liability may be allowable. I would accept the figure of ten per cent as proposed by counsel for the applicant. 114 I note that the argument floated about liability for Mr Barry's suggested "frolic of his own" highlights the lack of any contrition or remorse on the part of the respondent. Frank admissions of wrongdoing, and apologies to the employees who have been disgracefully treated, may have operated in mitigation. None were forthcoming. There must be many workplaces in Australia with staff profiles similar to those at the Hotel: low paid casual workers dependent for a reasonable living on penalty rates for discretionary shift work. Such employees may be unaware of the relevant provisions of the Workplace Relations Act . Contraventions may not come to the notice of a workplace inspector, the workplace ombudsman or a trade union. 116 To exploit that vulnerability to obtain signatures to AWAs, the terms of which are plainly against the workers' interests, is contrary to the principle of free and fair bargaining. 117 Ignorance is no excuse. The laws protecting employees against duress in connection with AWAs have been in force since 1 January 1997. The laws protecting employees from being injured or prejudiced in their employment because they are relying on their award rights have been in force for decades. Counsel's submissions at the hearing did not include any figures as to the suggested range of penalties. I therefore invited counsel to submit, after the hearing, ranges of figures, each without reference to the other. However, I am not obliged to accept either of the figures submitted by counsel, or some figure in between. 119 As already mentioned, penalties will need to be imposed in respect of ten separate contraventions, nine of s 400(5) and one, in respect of Mr Di Domenico, of s 792. 120 Counsel for the applicant suggested $16,500 to $22,000 in respect of Ms Bruce and Ms Hyland, $11,000 to $16,500 in respect of each of the six Thompson contraventions and $11,000 to $16,500 in respect of each of the Lucas and Di Domenico contraventions. A ten per cent discount for admission reduced the totals to $108,900 to $158,400. 121 Counsel for the applicant would only apply the totality principle in respect of the six Thompson contraventions. He suggested reducing the range for these from $59,400 to $89,100 (including discount) to $40,000 to $60,000 (again including discount). Applying the totality principle would produce a final range of $85,500 to $123,300. 122 Counsel for the respondent submitted a range of $5000 to $8000 for each of the Hyland, Bruce and Lucas contraventions, $5000 for the Di Domenico contravention and in respect of Thompson "1 breach with 6 particulars of conduct constituting the breach $20,000 - $25,000". The total range of penalties would thus be $40,000 to $54,000. 123 The starting point in my view is the statutory maximum of $33,000. That is the penalty for the worst conceivable offence. A discount for admission of liability reduces that to $30,000 (arithmetically that is a 9.1 per cent reduction, so a further rounding down will be applied). 124 The present contraventions are somewhere between a half ($15,000) and two-thirds ($20,000) of the way along the spectrum of seriousness, that is to say $17,500. After the rounding down mentioned I would impose a penalty of $17,000 in respect of each contravention. I have not drawn any distinction between the different contraventions, other than the Thompson ones where the result flows from the fact that there were six separate contraventions. While there were different features of the conduct in each contravention, and some conduct may have affected some employees more than others, by far the most significant aspect is that they were all committed as part of a deliberate policy. 125 I apply the totality principle by looking at the ultimate result, $170,000. The totality principle does not necessarily require a discount. I do not think any is called for in the present case. The conduct of the respondent was deliberate and reprehensible and caused great distress to innocent employees. Financial loss (before the compensation orders I have made) was in one case almost $4,000. That is a lot of money for someone on $17 per hour. | australian workplace agreements employees entitled to award conditions including penalty rates proposed awa providing for flexible hourly rate very similar to award rate, but no penalty rates employees threatened with loss of overtime shifts if they did not sign awa changing of rosters pursuant to threats admission of liability for applying duress and injuring employees in their employment for a prohibited reason. held: penalties of $17,000 for each of ten contraventions industrial law |
They did so, and it is with the question of costs that these reasons are concerned. 2 The proceeding was commenced in the Federal Magistrates Court. Although the estate of Mr W.L. Meinhardt was the only obvious respondent, the applicant also served Mr Meinhardt's children, the residuary beneficiaries under his will. The second and third respondents appeared, and joined in giving consent to orders made on 21 June 2006 by which they were made respondents in the proceeding. At the same time, also by consent, Mr R.C. McKenzie and Mr T.J Browne, the named executors under Mr Meinhardt's will (although without the grant of probate), were excused from further attendance, with the question of their costs being reserved. 3 In this court, two main contested issues have been dealt with: first, the question whether the applicant required leave to present the petition pursuant to s 244(13) of the Bankruptcy Act 1966 (Cth) ('the Act'); and secondly, the question whether an order under s 244 of that Act should be made in relation to the estate. The second respondent urged that these questions should be answered in the affirmative and in the negative respectively. In each case the contrary position advanced by the applicant prevailed. The third respondent participated at each level, but only that she might respond to any accusations or blame that might be directed at her. 4 The present matter requires me to consider whether the proceeding is to be seen as one in which well-meaning litigants seek a ruling from the court as to the administration of an estate or a trust in accordance with some governing instrument or the general law, on the one hand, or should rather be seen as conventional adversarial litigation on the other hand: see In re Buckton [1907] 2 Ch 406, 414-415. Pursuant to s 32 of the Act, the matter of costs is within the discretion of the court. 5 The named executors seek an order that their solicitor/client costs be paid from the estate 'with the usual priority'. They did not explain what was meant by the 'usual priority'. Under s 109(1)(a) of the Act as modified for the purposes of Pt XI , 'the trustee of the deceased person's estate' is given the same priority as the petitioning creditor. In the absence of any grant of probate, I do not believe I should regard the named executors as the trustees of Mr Meinhardt's estate. On the other hand, through no obvious default of their own --- save perhaps some tardiness in applying for probate --- they find themselves in a kind of legal half-light in which they have been obliged to incur some costs in a cause which is not their own. When served in this proceeding, they caused to be made and filed an affidavit which frankly and, it seems, comprehensively, set out the assets and liabilities of the estate and in which the deponent stated his belief that the estate was insolvent. At the next opportunity, they sought to be excused from the proceeding. I consider that they have acted reasonably and should have their costs paid from the estate. For that reason, and because they had no personal interest in the proceeding, I am prepared to order that these costs be paid as between solicitor and client, and that they have priority as though governed by s 109(1)(a) of the Act. 6 The applicant seeks its costs of the proceeding, subsequent to the first directions hearing on 13 June 2006, from the second respondent on a solicitor/client basis. It says that the second respondent has conducted his case purely in his own interests, and in a manner which is effectively indistinguishable from the situation of a party in conventional adversarial litigation. It disputes the proposition that any part of the proceeding was concerned with the distribution of a fund. It points to a number of respects in which, it contends, the second respondent's conduct of the proceeding was unreasonable, such as requiring discovery, and requiring the attendance of a witness from overseas, in relation to transactions by or involving the applicant which appeared ex facie regular and which the second respondent had no disclosed reason to impugn. For his part, the second respondent points to the circumstance that the applicant is itself an overseas company, and to several places in my reasons of 10 October 2006 in which I expressed reservations about the comprehensiveness of the picture which was visible from the accounts and other records disclosed to the court by the applicant. He points out that, with the withdrawal of the named executors, he himself stepped up to the plate, as it were, to perform the necessary role of contradictor. He says that the applicant's claim was of such an order, and potentially of such significant impact on the estate as a whole, as to warrant careful investigation by the court, and that his active role as contradictor facilitated that. He says that it was the applicant's case, and that he took no more than an appropriate role by way of putting the applicant to its proof. 7 I regard the proceeding not as one which involves the administration of the estate, but as one designed to establish that the estate should be administered under s 244 of the Act. The applicant made an application before a court, respondents were joined and, at least as far as the applicant and the second respondent are concerned, the matter proceeded as a conventional adversarial contest. There is a sense in which the applicant might be regarded as a party acting for the benefit of all creditors (as would generally be the case in a Pt XI administration and as is recognised by s 109(1)(a)) , but the two aspects of the case upon which it has succeeded concerned its right to have recourse to Pt XI at all and the establishment of its own claim. Similarly, there is a sense in which the second respondent might be seen as acting in the interests of residuary beneficiaries under Mr Meinhardt's will, but, in a practical sense, he was substantially seeking to advance his own interests. On the questions decided by the court, his position did not prevail. I am, in the circumstances, persuaded to view the case through the prism of conventional adversarial litigation and to order, therefore, that the second respondent pay the applicant's costs. I am not, however, disposed to order that those costs be paid as between solicitor and client. Having held that the proceedings were effectively adversarial, something more than the vigorous and thorough prosecution of his own case by the second respondent would be necessary before the court would depart from the normal rule that costs be taxed as between party and party. It is not enough that the applicant, at an early stage, informed the second respondent that the position for which it contended would be likely to prevail. Neither that nor the other matters on which the applicant relied in its written submission on costs has persuaded me to depart from the normal rule. 8 The applicant also seeks an order that its costs, save to the extent paid by the second respondent, be paid from the estate on a solicitor/client basis, with priority. It says that this would be the normal entitlement of a petitioning creditor. The normal entitlement of a petitioner under s 109(1)(a) is not, I consider, something upon which I should rule just because there have been contested proceedings before the court in which costs orders have been made under s 32 of the Act. Save to the extent necessary to address the rather ambiguous position of the named executors, I propose to confine myself to questions of costs as they have arisen as between the parties to the litigation. If the applicant in fact has an entitlement under s 109(1)(a) , there is no reason why that provision should not operate according to its terms. For these reasons, I propose not to make any costs order in favour of the applicant beyond that which obliges the second respondent. 9 The second respondent seeks that his costs be paid out of the estate 'with priority'. This submission was very faintly put, and it is sufficient for me to conclude, as I do, that there are no circumstances warranting a costs order of the kind which the second respondent seeks. 10 The third respondent seeks her costs of the hearing on 21 and 22 September 2006 from the second respondent. Those days were occupied with the question whether an order should be made under s 244 of the Act in relation to the estate. I accept that I have jurisdiction under s 32 to make the order sought by the third respondent. However, there was no issue joined as between the second and third respondents: neither made any claim against the other. It is true that, in a number of respects, it appeared to be a necessary inference from the way the second respondent conducted his case against the applicant that the third respondent might have received more than her due from the assets of the applicant, and it is also true that, at one point, it was submitted that the proceeding itself was an abuse of process, but at no stage was the third respondent the target of the second respondent's case. To the extent that the case of the second respondent at times seemed to imply what was almost a slur against the third respondent, such was, in my view merely a consequence of the appropriately robust way in which the case was advanced as against the applicant. The third respondent, as a party to the proceeding, was of course, entitled to participate in the hearing in a manner which was substantially concerned to protect her own reputation from such slurs, but ultimately nothing turned on matters of that nature and there is not otherwise any basis upon which the court would be justified in ordering the second respondent to pay her costs. | costs whether proceeding involves administration of estate or adversarial litigation. bankruptcy |
The documents sought to be inspected by the applicants are the subject of a claim by ASIC that they are privileged from production and inspection on the ground of public interest immunity ("PII"). At the time of the issue of the subpoena the first applicant was the only applicant in the proceeding. Subsequently on 16 December 2008, the second applicant was added as an applicant as a result of the consolidation of this proceeding with another proceeding. For the sake of convenience and conformity, I refer in these reasons to the applicants although at particular times there was only the first applicant in the proceeding. On 28 April 2009 I overruled a threshold or preliminary objection to the motion by ASIC and the second and third respondents, Brookfield Multiplex Limited and Brookfield Multiplex Funds Management Limited (collectively "Multiplex") that the applicants were precluded from bringing the motion as it re-litigated a matter not open to them on an interlocutory hearing because the matter had already been determined against them by the decision of the Full Court of the Federal Court in Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123 ; (2008) 169 FCR 227. ASIC and Multiplex submitted that the motion amounted to an abuse of process. On the same day, I dismissed a notice of motion filed by Multiplex on 13 March 2009 seeking orders that the applicants' motion be dismissed or permanently stayed as an abuse of process of the Court. There is a considerable background to the applicants' motion and this proceeding which is set out in my earlier ruling on 28 April 2009: P Dawson Nominees Pty Ltd v Australian Securities and Investments Commission (No 2) (2009) 255 ALR 466. I do not propose to rehearse it in detail and I incorporate that ruling in these reasons. When the return of the subpoena first came before the Court, ASIC objected to the production of the documents and transcripts for inspection on the ground of PII. At the time the basis for the objection that they tended to reveal the identity of informers to ASIC was not disclosed publicly in open hearing. I rejected ASIC's objection, in substance, on the basis that the identity of the informers, which ASIC was seeking to protect from disclosure, was already known within Multiplex and I set out my reasons in a confidential schedule to the published judgment: P Dawson Nominees Pty Ltd v Australian Securities and Investments Commission [2007] FCA 1659 ; (2007) 65 ACSR 239. On 14 November 2007 I ordered that ASIC's application that the documents and transcripts were protected from production for inspection on the ground of PII be dismissed. ASIC sought leave to appeal against the orders. The Full Court granted leave to appeal, allowed the appeal, set aside the orders and ordered that the thirty-six specified documents and forty-one transcripts of examination of twenty-three witnesses produced to the Court pursuant to the subpoena were protected from production to, and inspection by, the applicants and Multiplex on the ground of PII: Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123 ; (2008) 169 FCR 227. An application by the applicants to the High Court for leave to appeal was refused. The parties were in agreement as to the process of analysis and consideration which I should undertake in determining a challenge to an application for production and inspection of documents produced under subpoena on the ground of PII because the documents might tend to disclose the identity of an informer or informers. The first step is to determine whether the documents disclose the existence of an informer or informers to ASIC. The second step is to determine whether the documents tend to identity an informer or informers to ASIC. If they do, the second step also involves determining whether the documents can be redacted or masked in such a way that, in their masked form, it will not be possible, even by the conveying of "a shrewd idea", to identify the informer or informers. The third step is to undertake a balancing exercise and determine whether, in the circumstances of this case, the documents to the extent to which they are not redacted or masked are of sufficient importance for the applicants' conduct of the proceeding to outweigh the importance of not disclosing the identity of the informer or informers. ASIC and Multiplex submitted that the Full Court had decided this balancing exercise against the applicants and that it was not open to the applicants to raise this issue and that I was bound by the Full Court's finding. The position and circumstances facing the Court on the hearing of the present motion are different from the circumstances facing the Court at the time I made the order on 14 November 2007 dismissing ASIC's application. As a result of the disclosure of the identity of Mr Cummins as an informer to ASIC, ASIC accepts, subject to it reserving its rights in respect of any appeal which it may seek to bring against my ruling on 28 April 2009 that production and inspection of the following documents cannot be objected to by it on the ground that they would or might disclose Mr Cummins' identity as an informer to ASIC. (b) 4, 6, 7, 11, 12, 14, 18, 19, 22, 26, 27, 31 and 32 in redacted or masked form. ASIC still opposes the production and inspection of documents numbered 2, 3, 17, 33 and 34 on the ground that inspection of those documents would or might disclose the identity of an informer or informers to ASIC who are entitled to protection in respect of their disclosures to ASIC pursuant to Pt 9.4AAA of the Act. For the same reason ASIC continues to object to the production and inspection of all forty-one transcripts. Notwithstanding my ruling that the applicants are entitled to bring a further motion for production and inspection of the documents and transcripts, I must take into account, follow and apply the relevant and binding reasoning and ratio of the Full Court in its decision on 4 July 2008. Further, the benefit of the doubt should be in favour of non-disclosure. The Full Court concluded that the thirty-six documents and all forty-one transcripts were properly the subject of a claim for protection from disclosure and inspection on the ground of PII unless, on balance, the public interest was outweighed by other public interest considerations. The Full Court did not see the documents as having sufficient importance for the applicants' conduct of the litigation to outweigh the importance of not disclosing the identity of informers. However, no agreement was reached. It is implicit in the Full Court's reasoning that the Court reached the same conclusion. It was accepted by all parties that the protection of the identity of an informer or informers to ASIC from disclosure is a legitimate and accepted basis upon which to object to the protection and inspection of documents on the ground of PII: see, for example, Rogers v Home Secretary [1973] AC 388; Cain v Glass (No 2) (1985) 3 NSWLR 230 ; Spargos Mining NL v Standard Chartered Australia Ltd (No 1) (1989) 1 ACSR 311 ; Attorney-General (NSW) v Stuart (1994) 34 NSWLR 667. I am satisfied that ASIC has discharged the evidentiary onus upon it to establish that the informer or informers, other than Mr Cummins, provided ASIC with information voluntarily and on a confidential basis and that the information provided had itself the requisite character of confidence. Consistently with the submissions of the applicants, I have felt an "actual persuasion" that the informer or informers provided ASIC with information, that they did so voluntarily, that it was on a confidential basis and that the information provided had itself the requisite character of confidence. The next step is to determine whether any parts of the documents and the transcripts can be redacted or masked in such a manner that the passages not redacted or masked do not disclose the identity of an informer or informers and do not, taken in conjunction with other passages not redacted or masked, convey a shrewd idea as to the identity of the informer or informers. In this context, it must be borne in mind at all times that documents taken together may convey information which each document, by itself and upon consideration of its contents alone, does not convey in relation to the identity of an informer or informers. It seems to me that the redaction or masking exercise should be undertaken before entering upon the balancing exercise to determine whether the public interest in the protection of the identity of the informer or informers is outweighed by other public interest considerations. The Full Court did not enter upon this redaction or masking exercise. I did not undertake this redaction or masking task at the earlier hearing because I concluded that the totality of the documents and transcripts should be the subject of an order for production and inspection because the basis for the claim for protection from production and inspection, PII, had not been made out. The feasibility of undertaking that task must now be addressed. The only significant change since my earlier order is that the identity of Mr Cummins as an informer to ASIC has been disclosed and the identity of another informer or other informers has not been disclosed. I must therefore undertake the task of determining whether the documents and the transcripts can be redacted or masked and, if so, whether they should be so redacted or masked. The practice or task of undertaking the redaction or masking exercise in respect of documents the subject of an order for discovery or inspection is well accepted. However, there have been different approaches to the manner in which such redaction or masking is to be undertaken and as to the principal basis for the practice. The various approaches are discussed and analysed by Martin CJ in Areva NC (Australia) Pty Ltd v Summit Resources (Australia) Pty Ltd (No 2) [2009] WASC 67. In Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1 at 66-67, Stephen J considered whether Loan Council documents in issue might be the subject of redaction or masking. The informant had sought the production of the Loan Council documents for the purpose of establishing that the claimed proposed borrowing of $4 billion was not the subject of Loan Council consent. Were production of such material, and of such material only, to be permitted, no public interest would be prejudiced and at the same time the course of justice would not be impeded unnecessarily. Authority for such a course is to be found in Conway v Rimmer . Lord Reid (35), contemplated that part only of a document might properly be withheld, according to it alone privilege from production: Lord Pearce said (36), that the court might call for and itself inspect a document and then, if 'part of a document is innocuous but part is of such a nature that its disclosure would be undesirable, it should seal up the latter part and order discovery of the rest, provided that this will not give a distorted or misleading impression'. A statement of the outcome of the inspection of the Loan Council documents which has in fact been undertaken by this Court appears at the end of the several statements of reasons for judgment in this case. ASIC made a similar submission in relation to the documents numbered 4, 6, 7, 11, 12, 14, 18, 19, 22, 26, 27, 31 and 32 in a redacted or masked form. I have considered the redaction or masking proposed by ASIC in relation to those documents and have also had regard to the confidential affidavits filed by ASIC which bear upon the redaction and masking of these documents. I have reached the conclusion that the redaction and masking undertaken by ASIC goes beyond the redaction and masking which are necessary in order to ensure that the documents do not have a tendency to disclose the identity of an informer or informers to ASIC. I set out in confidential Appendix A to these reasons the redaction and masking of these documents which I consider should be undertaken. This appendix will only be made available to ASIC's legal advisers and the deponents of its affidavits for the purpose of determining the form of any public non-confidential order which I should make. In relation to documents numbered 2, 3, 17, 33 and 34, I am satisfied that the documents numbered 2, 3, 33 and 34 should be protected from production and inspection on the ground that inspection of those documents would tend to disclose the identity of an informer or informers to ASIC who are entitled to protection in respect of their disclosures to ASIC pursuant to Pt 9.4AAA of the Act. I consider that there should be only a partial redaction or masking of document number 17 and I set out the manner in which I consider that document should be redacted in confidential Appendix B to these reasons. This appendix will only be made available to ASIC's legal advisers and the deponents of its affidavits for the purpose of determining the form of any public non-confidential order which I should make. I have considered the pages of transcript identified by Mr Moodie and am satisfied that his description of those pages of transcript is substantially correct. There are some pages which do not appear to bear the description given to them by Mr Moodie, but those pages do not impact upon, or result in me altering the conclusion I have reached as to whether the transcripts should be produced to, and inspected by, the applicants. In his second confidential affidavit Mr Moodie reconsidered each of the forty-one transcripts with a view to identifying whether any of them could be disclosed in their entirety or in a redacted form, so that there would be no risk of identification of an informer or informers other than Mr Stuart Cummins. He reaches the conclusion that there is such a risk having regard to titles, responsibilities and reporting lines to and from examinees and having regard to what Mr Moodie called "a simple process of deduction". I agree with that conclusion for the reasons to which I shall refer. The applicants submitted that protection of documents from production and inspection on the ground of PII will only be established in relation to those parts of documents which identified or tended to identify an informer or informers to ASIC other than Mr Cummins. They submitted that where portions of the documents were innocuous the sections which identified or tended to identify an informer or informers should be masked and the balance made available to the applicants for inspection. Adopting and adapting the observation and words of Stephen J in Sankey v Whitlam (supra), the applicants submitted that it "seemed scarcely credible" that an inspection of the forty-one transcripts would not reveal the practicability of extracting material in itself quite innocuous without revealing or tending to reveal the identity of any informer. I have considered whether I should accept that submission and undertake the exercise of seeking to redact and mask parts of the forty-one transcripts so as to leave those parts which are, in general terms, innocuous, on the basis that they do not identify or tend to identify an informer or informers. I have reached the conclusion that I should not undertake this task for the following reasons. The transcripts record the evidence of twenty-three witnesses. The identity, occupation, role, employment title and employer of each of them is disclosed in the transcripts. If I were to redact or mask the transcripts so as to leave the "innocuous" parts so that the names, occupations, roles, employment titles and employers of the various witnesses and the organisation or company which employs them or with which they were involved were still disclosed, the applicants' legal advisers would still be left with material by which a shrewd idea would be conveyed as to the identity of an informer or informers other than Mr Cummins. This situation would occur because there would have been available publicly at relevant times information and documents relating to the many officers and employees of Multiplex and the reporting lines between them. I refer, for example to Multiplex's Annual Report to Shareholders. I also assume that the applicants have available to them information as to the management structure of Multiplex and the identity of a number of persons who were employed by Multiplex in various roles at relevant times. This is apparent from a consideration of the consolidated statement of claim. It would therefore be possible, in my opinion, by a process of elimination for the applicants' legal advisers to deduce the identity of the informer or informers other than Mr Cummins. The question arises whether I should go one step further and redact or mask the names, occupations, roles, employment titles and employers of each of the twenty-three witnesses. I am satisfied that even if I were to go this far, it would still be possible for the applicants' legal advisers, by a process of deduction and inference, to reach a conclusion as to the identity of an informer or informers to ASIC. The only way this situation could be avoided would be if I were to go through each of the forty-one transcripts with a fine toothcomb and eliminate by redaction or masking any reference to a name, occupation, role, employment title and line of communication or reporting to or from each of the witnesses or any reference from which an inference could be drawn in relation to these matters. In particular, I do not have the benefit of the knowledge obtained by the applicants' legal advisers, nor do I have the benefit of the knowledge of Multiplex's legal advisers in relation to the subject matter of the proceeding. Although it might seem to the outside observer that it is "scarcely credible" that an inspection of the forty-one transcripts would not reveal the practicability of extracting material in itself quite innocuous, I have reached the conclusion that that task is impracticable for me for the reasons to which I have referred. It might be possible for that task to be undertaken by special counsel for the applicants in conjunction with ASIC and special counsel for Multiplex, but that route has not been chosen by the parties. Although Mr Watson has not had access to these documents and transcripts, he said that, having regard to the overlap between the issues in the principal proceeding and the matters the subject of the ASIC investigation, the documents and transcripts "are likely to cast significant light on the central issues in the proceeding". In particular, he referred to: The awareness or knowledge of Multiplex, its directors and senior officers regarding cost overruns and delays on the Wembley Stadium project and the impact of those cost overruns and delays on profitability of the project and the Multiplex group, the deterioration in Multiplex's estimated profit on its West India Quay project and Qantas project and the significant change in the composition of the Multiplex group and construction division revenue. Whether Multiplex had reasonable grounds for representations regarding its profit forecasts and whether it had reporting systems which ensured adequate and timely reports regarding the Wembley Stadium, West India Quay and Qantas projects. In the light of the Full Court decision, I do not consider that it is open on the hearing of the current motion for the applicants to rely upon this evidence. The Full Court specifically addressed the issue of the significance and importance of the thirty-six documents and the forty-one transcripts in issue in the proceeding (see pars [55] to [61]). The documents may be discoverable, and relevant, but beyond that they are not shown to have any greater significance for PDN. I do not consider that the addition of those contraventions requires or enables a reconsideration of the view of the Full Court that the documents in question do not have sufficient importance for the applicants' conduct of the litigation to outweigh the importance of not disclosing the identity of informers. It therefore follows that the applicants' motion should be granted in part in relation to the documents referred to in pars [22] and [23] above. Otherwise I consider that ASIC's claim that the production of the forty-one transcripts for inspection should be refused on the ground of PII, on the basis that such inspection might tend to disclose the identity of an informer or informers to ASIC, should be upheld. I will hear the parties as to the form of the order I should make as a consequence of these reasons. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | subpoena to produce public interest immunity disclosure of informer or informers redaction balancing exercise practice and procedure |
On 17 November 2006 on Mr Lock's application an order was made for the examination of Mr John Viscariello under s 596A of the Corporations Act 2001 (Cth), and that, pursuant to s 596D of the Act, he produce certain books and records concerning the examinable affairs of the companies in terms of the summons annexed to the order (the November Order). The examination and production summons (the summons) was returnable on 15 December 2006. Pursuant to the November Order, Mr Viscariello was given three days after service to apply to set aside or vary the order. He did not do so within that time. 2 Belatedly, by motion of 14 December 2006, Mr Viscariello applied for the discharge or permanent stay of the November Order, and that he be permitted to inspect the affidavit of Mr Lock filed in support of the application for that order. 3 His motion, despite being out of time, did not seek an extension of time within which it could be brought. Nor did he adduce any evidence to explain why he had delayed in making the application. I heard that motion urgently on 14 December 2006. In the absence of an explanation for the delay, I did not then extend the time within which it could have been brought. On Mr Viscariello's application, I adjourned the motion to 17 January 2007 to give him an opportunity to adduce such evidence. In the meantime, his examination partly proceeded on 14 December 2006, although he did not then produce any of the documents which he was required to produce by the summons. 4 On the further hearing of his motion, Mr Viscariello has produced evidence to explain his delay in applying to set aside the November Order. His evidence is not challenged. In the circumstances, it provides a satisfactory explanation for the belated application. I do not need to refer further to it. Mr Lock did not suggest in submissions or in evidence any injustice which he might suffer if an extension of time to bring the application were granted nunc pro tunc to 14 December 2004. I will permit the amendment of the motion to seek such an extension of time, and I will then grant the extension of time sought. An extensive, and somewhat rambling, affidavit of Mr Viscariello had been filed apparently to support that claim. That contention was not pursued at the hearing on 17 January 2007. It is not therefore necessary to refer to that extensive affidavit. However, I point out that the allegations made by Mr Viscariello concern Peter Macks. Mr Macks was the initial liquidator of the companies, having been appointed by resolution of the creditors to wind up the companies on 12 December 2001. They were not allegations made directly against Mr Lock. Nothing was contained within the affidavit to suggest in any way that Mr Macks played any part in the decision to seek the November Order, or that Mr Lock himself was not acting conscientiously in pursuing the order. It is therefore not surprising that the contention was not maintained. I am not to be taken, by pointing that out as indicating that I regard the allegations of improper conduct on the part of Mr Macks as having any foundation. I have no view on that matter. 7 The explanation for my observation in the preceding paragraph also provides the background to the first argument advanced by Mr Viscariello. The functions of Mr Lock and Mr Macks are quite distinct. By the first order made on 16 August 2006 (the August Order), on the application of Mr Macks, Mr Lock and John Sheahan of Sheahan Lock Partners were appointed as joint and several additional liquidators to the companies solely for a specified purpose. Consequently, so the argument ran, as Mr Lock had applied alone to seek the November Order, his application was incompetent and the Order itself should be set aside. 9 There is no reason to think that Mr Sheahan was not aware of, and did not support, Mr Lock's application. Mr Lock and Mr Sheahan are partners. Nor is there any reason to think that, if the contention is correct, there would be any real benefit to be gained by Mr Viscariello except by delay. If the contention is correct, Mr Lock and Mr Sheahan could apply jointly for an order on the same grounds as it was made in the first place. 10 However, it is necessary to deal with the contention. It was put that, following the appointment of Mr Lock and Mr Sheahan, there were three liquidators of the companies and that, because there was no determination that they may exercise their respective powers severally, s 506(4) requires not less than two of them to have to make the application for the November Order. Alternatively it was put that, by that Order, Mr Lock and Mr Sheahan were obliged to act jointly. 11 A similar contention succeeded in Harvey v Burfield (2002) 84 SASR 11. In that case, there had been no order that the liquidators were appointed severally, so Perry J concluded after a review of the authorities that they should be regarded as having been appointed jointly. Where liquidators are not appointed severally, s 506(4) would permit two of several (in the sense of "more than two or three, but not many" per Perry J at [53]) liquidators to exercise the powers of the liquidators under the Act. Absent any determination to the contrary made at the time of their appointment, where three or more liquidators are appointed, any power given by the Act may be exercised by any number not less than two . It is clear that by the first order Mr Lock and Mr Sheahan were appointed as joint and several liquidators of the companies with Mr Macks. The issue, as identified in contentions, was whether Order 5 operated only as identifying the sole purpose for which Mr Lock and Mr Sheahan were appointed, and so limiting what they may do as joint or several liquidators, or also operated as a determination by the Court (as contended by Mr Viscariello) as to how they should perform their restricted function. 13 In my judgment, the August Order, as well as appointing Mr Lock and Mr Sheahan as joint and several additional liquidators, operated only to limit the functions which they may perform in that capacity. I do not consider that the order determined that they must perform those functions in all respects jointly. Otherwise, proper regard is not given to the word "severally". In my view, upon its proper construction, it determined that, in performing their restricted function, they may act severally. Order 1 refers to them as being "joint and several additional liquidators" of the company "solely for the purpose specified in paragraph 5. " It therefore refers to, and identifies, the purpose of Order 5. I also consider that the use of the words "joint and several" in conjunction with the words "additional liquidators" means that Mr Lock and Mr Sheahan as additional liquidators were appointed jointly and severally solely for the limited purpose specified. The wording of order 5 follows naturally from order 1 in identifying the purpose for which they were appointed jointly and severally. The introductory words of Order 5, and at least Order 5.1, do not have any content which suggests that the Registrar who made the August Order intended to direct them how to exercise that limited function, and in particular that they could do so only jointly. Indeed, it would be inconsistent with Order 1 that they be appointed as joint and several liquidators if Order 5, and especially Order 5.1, then determined that they must act jointly. There would be no circumstances in which they could act severally, despite the use of that word. I observe the application for the November Order was clearly a step in investigating possible breaches of s 588G in relation to the operations of the companies. 14 I note that Order 5.2 of the August Order may suggest that, at least in deciding whether it is appropriate to take steps to recover compensation for losses by breach of s 588G, presumably by the institution of proceedings, Mr Lock and Mr Sheahan must act together. It may therefore be that any proceedings should be in their joint names. If that be so, Order 5.1 operates clearly by way of contrast to such a determination. On the other hand, it is hard to contemplate that the Registrar intended that such steps as, for example, a letter of demand or correspondence incidental to a letter of demand be signed by both of them. Order 5.2 may simply require that any decision to institute proceedings be made jointly, but that the steps to implement that decision may be taken by them severally. I do not need to resolve that issue. 15 I accordingly reject Mr Viscariello's first contention. I am fortified in the conclusion by the fact that the Registrar who made the August Order also made the November Order. If the August Order were intended to have required an application for examination and production under ss 596A and 596D to have been made jointly by Mr Lock and Mr Sheahan, the Registrar would not have made the November Order only on the application of Mr Lock. 16 The remaining three contentions of Mr Viscariello can be dealt with together. They do not seek to set aside the November Order, but to vary it. The scope of the November Order is conveyed by the summons annexed it. The variation sought is to the terms of the summons in so far as it specifies the categories of documents to be produced. The contention seeks to vary the summons by deleting pars 2-4 of the schedule which (it is common ground) seek the production of documents relating to the personal financial position of Mr Viscariello. There was no discretion to decline to make that order. It was duly made that he be examined "by summons in terms of Annexure A" to the order. The complementary order under s 596D that he produce documents as specified in the schedule to the summons was however discretionary. 18 The schedule to the summons contained four paragraphs. The first specified in some detail documents between 1 January 1998 and 21 December 2001 (the date of the creditors' resolution to wind up the companies held by Mr Viscariello) and relating to the affairs of the companies. It is accepted that those documents may relate to whether there has been any breach of s 588G of the Act, and may inform Mr Lock and Mr Sheahan as to whether steps to recover losses incurred by the companies by reason of any such breach should be pursued. No complaint is made about that paragraph of the schedule to the summons. 19 Paragraphs 2-4 of the schedule to the summons were justified by counsel for Mr Lock as relating to the examinable affairs of the companies by exposing the personal financial position of Mr Viscariello, and hence his capacity to meet any judgment against him in the event that proceedings for contravention of s 588G were successful. 20 It is plain that the examinable affairs of a company (as defined in s 53 of the Act) may include information as to the capacity of a person who is or may be liable to the company in the event of successful proceedings against that person: see Grosvenor Hill (Qld) Pty Ltd v Barber (1994) 48 FCR 301 at 311-312; Gerah Imports Pty Ltd v Duke Group Ltd (In Liq) (1993) 61 SASR 557; Re BPTC Ltd (In Liq) (1994) 14 ACSR 460. A liquidator may seek to be in a position to determine, in a commercial sense as well as a legal sense, how the liquidator is best able to discharge duties to the company in liquidation. 21 Mr Viscariello contended that pars 2-4 of the schedule should not have been included because it was premature to do so. It was put that, at this point in the administration of the affairs of the companies by Mr Lock and Mr Sheahan limited to possible breaches of s 588G and any action following from such suspected breaches, the liquidators should only be focusing upon learning whether there had been such breaches and whether any claim by reason of such breaches might be made against Mr Viscariello. Counsel for Mr Lock did not gainsay that the November Order was a step at an early stage in the process of investigating the existence of any such claims, although there was no evidence directly dealing with that topic. It was then submitted that it is only at a point when proceedings are about to be, or have been issued, or at least when a view is formed that there is a real prospect of proceedings being instituted and maintained, that the capacity of a potential or actual respondent to such proposed or actual proceedings to meet any judgment may be explored. Hence, pars 2-4 of the summons should be deleted. It would also follow that submission, if it is correct, that examination should also not permit any questions on that topic at this point. Numerous recent cases have emphasised the importance of the difference between the legal ambit of these powers, and the appropriateness of their exercise in particular cases. The court must ensure that a proper balance is maintained between the legitimate interests of the person seeking the exercise of the court's power on the one hand, and those of the persons to be affected by any such exercise of power, on the other hand. 23 An examination under s 596A, as noted, was an entitlement of the liquidators. There was no discretion to decline to permit it. That, of course, does not preclude the Registrar presiding at the examination from deciding that certain questions are oppressive in all the circumstances and so not allowing them to be put. Most, if not all, the cases in which summonses such as the present have been contentious have involved discretionary examination orders under s 596B. Nevertheless, I think similar considerations arise where there is an examination ordered under s 596A and production ordered under s 596D. There may well be circumstances where examination on a particular topic is oppressive because the balance referred to in BPTC 14 ACSR 460 is not maintained at one stage of an examination and is at an adjourned stage of the examination, or is oppressive at one examination but not at any subsequent examination. Counsel for Mr Viscariello acknowledged that Mr Lock and Mr Sheahan might secure a further order for the examination of Mr Viscariello under s 596A at a later date and for the production of documents relating to his personal financial position to assess his capacity to meet any judgment. 24 I do not accept that the November Order could not, in the exercise of the Court's discretion under s 596D, require the production of documents relating to Mr Viscariello's capacity to meet any judgment. The authorities are plain that that topic falls within the examinable affairs of a corporation. In Grosvenor 48 FCR, the Full Court (Beaumont, Spender and Cooper JJ) at 311 distinguished between the power of the Court to have made such an order on the one hand, and the control of the examining officer in the course of an examination on the other. Consequently, I do not accept the contention that seeking information about Mr Viscariello's capacity to meet any judgment, even at an early stage of the investigation process, was necessarily inappropriate or that the Court did not have power to order production of documents for that purpose. However, I do not regard the scope of the documents required to be produced by the summons as limited to seeking practical information as to the actual worth of any claim that might be made against Mr Viscariello. 25 The width of pars 2-4 of the schedule to the summons is self-evident. All documents which are in your possession or control, including but not limited to letters, memoranda, notes, invoices or schedules, whether in electronic or hardcopy format, relating to all transfers of any interests in real property or chattels, whether legal or equitable, taking place in the period from December 2001 to the present. It was also proposed that par 4 be varied, but not in a way which, in my view, limited its scope. It was proposed to remove the words "whether legal or equitable' and substitute the words "any trust of which [Mr Viscariello] is a beneficiary, trustee or settlor, or of any private company of which [Mr Viscariello] is a shareholder or member. I do not think they could be reasonably justified as seeking to ascertain the capacity of Mr Viscariello to satisfy any judgment, in the event of proceedings against him for contravention of s 588G. 28 In the first place, they cover far too great a time period. There is no reason identified at present why documents relating to his financial affairs at December 2001 could inform his present capacity to meet any judgment, or indeed that any documents other than relatively contemporaneous or current documents are necessary for such an assessment to be made. The issue is whether he is presently, or will be, capable of meeting any significant judgment. The range of documents is also far too wide. It covers both primary records such as notes or invoices, as well as secondary records such as financial statements. It would cover, for example, the written accounts received in respect of a house (if he owns or rents one) such as water or electricity bills. Paragraph 1 is expressly not limited to the subsequent categories of documents in pars 2.1-2.8 (excluding pars 2.2 and 2.7, by the proposed amendment). The restriction proposed to assets of more than $5000 or transactions to the value of more than $5000 does not alleviate that criticism. There are other observations which might be made about the scope of those paragraphs but I do not need to go further. 29 I think those paragraphs of the schedule to the summons (as amended as proposed by counsel for Mr Lock) are oppressive. They go far beyond the legitimate interests of Mr Lock. I do not think he was entitled to an order in those terms. I propose to strike out pars 2-4 of the summons, and to vary the November Order to the extent to which the summons as annexed is part of that order, by striking out those paragraphs of the annexure. 30 Mr Viscariello will nevertheless have to attend to further examination. The examination will no doubt, in the light of the documents now to be produced (albeit belatedly) to comply with par 1 of the schedule to the summons, further explore the question of any possible contravention of s 588G of the Act. As the examinable affairs of the companies includes his capacity to meet any judgment, it is a matter for the Registrar before whom the examination takes place as to the extent to which, at this point, such questions on that topic should be permitted. 31 I have therefore accepted the third contention of Mr Viscariello. 32 In the circumstances, it is not necessary to grant access to the affidavit of Mr Lock in support of the examination. The making of the examination order was an entitlement of Mr Lock under s 596A, and there is no complaint about the terms of par 1 of the schedule to the summons. The previous allegation of improper purpose was not pursued. It is not necessary to explore whether the affidavit in support of the examination order provided some further basis for seeking such broad production of documents relating to Mr Viscariello's capacity to meet any judgment. Counsel for Mr Lock indicated in submissions that that topic was not addressed in the affidavit in support of the application for the November Order. 33 I order that the costs of Mr Viscariello's motion be as follows: Mr Lock should pay the counsel fees of Mr Viscariello of the hearing on 17 January 2007. There should be no other order for costs of the motion. I have taken into account the orders made on the motion, the hearing on 14 December 2006, the abandoned contention of improper purpose on the part of Mr Lock, and the extent to which Mr Viscariello succeeded on the contentions ultimately made on the hearing of his motion. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice MANSFIELD. | corporations act 2001 (cth), s 596a , s 596d appointment of liquidators content of summons whether liquidators can act severally whether liquidators must act jointly whether summons under s 596a oppressive whether examinable affairs include personal financial position corporations |
Damages or, as the case may be, an account of profits, injunctive relief together with a related order requiring the publication of corrective advertising, rectification of the Trade Marks Register and a declaration as to breach of an alleged contract are sought in the substantive proceedings. Of present concern is an application made by Pakula Tackle for interlocutory relief. An order that the respondents withdraw the infringing items from sale at any retail or wholesale outlet. An order that the First Respondent by its proper officer, make, file and serve on the applicants an affidavit verifying the location and quantity of the infringing items. An order that the First Respondent, Second Respondent and/or Third Respondent refrain from making any misleading or deceptive representation, or any representation that is likely to mislead or deceive, including by way of material appearing on any web-site. An order that the First Respondent, Second Respondent and/or Third Respondent be restrained from infringing the applicant's copyright in the applicant's photographs, images and written words by reproducing (including by way of web-site) or authorising the reproduction of such photographs, images and written words or a substantial part thereof without the licence of the applicant. There was no dispute between the parties as to the principles which attend the granting of interlocutory injunctions. Their Honours who comprised the majority made clear that the final relief sought need not be injunctive in nature. See [8]---[21] (pp 216---220) (per Gleeson CJ); [59] to [61] (pp 231---232) (per Gaudron J); and [86]---[92] (pp 239---242); [98] to [100] (pp 244---246); and [105] (p 248) (per Gummow and Hayne JJ). At [10] (p 216), Gleeson CJ also specifically cited with approval Spry, The Principles of Equitable Remedies , 5th edn, 1997 (pp 446---456). These remarks of Mason ACJ which were approved by Gleeson CJ echo the observations made by the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 622---623. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [ [1968] HCA 1 ; (1968) 118 CLR 618 at 620]. There is then no objection to the use of the phrase "serious question" if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham , depends upon the considerations emphasised in Beecham . However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is "[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried" [1975] UKHL 1 ; [[1975] AC 396 at 407]. (Emphasis added. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application [See the judgment of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535---536 and the article by Sofronoff, " Interlocutory Injunctions Having Final Effect ", Australian Law Journal, vol 61 (1987) 341.95]. The first consideration mentioned in Beecham , the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. The first of these matters involves an assessment by the Court as to whether the claimant would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies , 7th edn, 2007 at pp 383---389; at pp 397---399; and at pp 457---462). The second of these matters requires the Court to exercise a discretion. In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the claimant if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the claimant for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted. In order to address the irreparable injury question, the balance of convenience and the balance of justice in the present case, it is necessary to consider the nature and strength of Sebel's case and the circumstances in which the respondent decided to compete with Sebel by importing the Titan chair into Australia and by promoting and selling that chair in this country. It is also necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally. The question is how to apply those principles to the circumstances of the present case, insofar as they have been revealed on the evidence led on the hearing of the interlocutory injunction? In a general way the proceedings might be described as a suit between two trade competitors in the market for the supply of fishing lures and associated equipment. Mr Peter Pakula, the director of Pakula Tackle, has a long association with that market. As long ago as 1987, Mr Pakula caused a business name "Pakula Tackle" to be registered in Sydney. He carried on business under this name until December 1999. The business embraced the design, manufacture, distribution and sale of fishing lures. The lures were for use in game fishing. Mr Pakula has deposed and it does not seem to be controversial that lures produced in the course of this business quickly became well recognised and popular within the game fishing fraternity both in Australia and worldwide. In December 1999, Mr Pakula sold his business to a company, Tailored Marine Accessories Pty Ltd (Tailored Marine). A director of that company was a Mr John Zacaropoulos whose then wife was Mrs Jennifer Zacaropoulos. The Second Respondent in these proceedings, Mr Mario Zacaropoulos, is the cousin of Mr John Zacaropoulos. Mr Mario Zacaropoulos commenced to work in the business along with his cousin John upon its acquisition by Tailored Marine from Mr Pakula. Mr Pakula continued "for some time" to work in that business as a "consultant". In or about May 2004, Mr John Zacaropoulos and wife Jennifer separated. The present Applicant, Pakula Tackle was incorporated at about the same time. Under the terms of their separation Mrs Jennifer Zacaropoulos became the sole shareholder in Pakula Tackle. I infer, although it is not completely clear on the affidavit material, that pursuant to the separation agreement Pakula Tackle succeeded to the business hitherto conducted by Tailored Marine. Mr Mario Zacaropoulos remained employed in the business, now as an employee of Pakula Tackle. Mr Pakula also continued his consultancy to the business. Over the course of his consultancy during the ownership of the business by Tailored Marine, Mr Pakula observed, so he states, a continuing deterioration in that business because of quality control, customer relations and production issues. That observation is controversial. Mr Mario Zacaropoulos has deposed to working "tirelessly" in the business "promoting an increase in the profits of the business" during the period from 2005 to 31 March 2007. Be this as it may, Mr Pakula has exhibited to an affidavit a contract dated 12 April 2007 for the sale by Pakula Tackle of its business to Gamefish Central Pty Ltd (in its capacity as trustee for the Pakula Family Trust) (Gamefish Central). The description given by Mr Pakula in the affidavit (para 19) of this agreement is not accurate, "on 11 April 2007, I completed the purchase of the shares of". The agreement as exhibited is not one for the sale of shares but rather for the sale of a business. A like, lamentable inaccuracy similarly infects Mr Mario Zacaropoulos' description of the transaction (see para 16 of his affidavit). I am prepared to infer that Mr Pakula exercised control over Gamefish Central and the affairs of the trust of which it was trustee. He is a director of that company as well as Pakula Tackle. Mr Pakula has also deposed (para 14 and para 15 of the affidavit filed by leave in Court on 4 February 2009): In relation to the trade marks registered in my name, I have consented to [Pakula Tackle] bringing in any action or seeking to enforce rights associated with the registration of trade marks, be they retrospective or prospective infringements. [Pakula Tackle] does on a day to day basis use all trade marks registered in my name and that of [Gamefish Central] for the purposes of the business of [Pakula Tackle] . (emphasis added) Quite how it is that, in the face of a written agreement which provided for the acquisition of its business by Gamefish Central and the apparent carrying on thereafter of that business under the name Pakula Tackle Australia by Gamefish Central, evident from email correspondence, Pakula Tackle has again come to carry on the business which it sold is no where explained in the evidence relied upon on its behalf. In the statement of claim (paras 18 - 21) the following allegations are made in respect of that part of the pleading directed to an alleged cause of action for passing off: The applicant has since at least 1997 carried on business as a manufacturer and supplied, throughout Australia, of fishing equipment, apparatus and related accessories including fishing lurers, flies, teasers and fish attractants ("the Goods") which have distinctive names, descriptions, colours and designs and which the applicant has supplied under or by reference to the brand name "Pakula Lures Australia" (the "Brand Name. For many years and at least as at the date of commencement of the Respondents' conduct pleaded below, the Brand Name when used on or in relation to the Goods has come to signify to the trade and to the public in Australia the Applicant's goods, such that person acquiring or seeking to acquire the Goods under or by reference to the Brand Name or any brand name(s) closely similar thereto, expect and intend to acquire the Applicant's Goods and not the goods of any other person or entity. The Applicant has, and for many years has had, a substantial and valuable good will in the Brand Name throughout Australia. These particular deficiencies of proof in relation to the ability of Pakula Tackle to maintain an action for passing off were not highlighted in the submissions made on behalf of Zacatak, although questions were raised on its behalf as to the ability of Pakula Tackle, as opposed to some other entity, to maintain proceedings for either trade mark or copyright infringements, even assuming that there was otherwise a serious question to be tried in respect of these alleged causes of action. It is not presently necessary to explore further whether Pakula Tackle is entitled to maintain the pleaded cause of action for passing off. I did not understand the submissions for Pakula Tackle to press this cause of action as a foundation for any of the interlocutory relief sought. In any event, on the present state of the evidence, I am not satisfied that Pakula Tackle has raised a serious question to be tried in respect of this cause of action as it is presently pleaded. At or about the time when Pakula Tackle entered into the agreement for the sale of its business to Gamefish Central, Mr Pakula, according to him, came to an arrangement with Mr Mario Zacaropoulos. The 4 main catalogues were Melton International; J & M Outfitters; Finest Kind; and Rok-Max. Again according to Mr Pakula, this alleged agreement was confirmed at a meeting which he had on 23 May 2007 with Mr Mario Zacaropoulos and the latter's wife, Mrs Jacqui Zacaropoulos. In contrast, Zacatak, through services provided by Mr Mario Zacaropoulos and his wife, has, it seems, been conducting operations on the strength of a representation made to Mr Mario Zacaropoulos by Mr Pakula in an email of 28 March 2007 in which he set out at some length how he envisaged business operations were to be conducted in the event that he (or, inferentially, a company controlled by him) came to acquire from Pakula Tackle the business carried on under the name "Pakula Tackle Australia". - That they can use the machinery as before with no charges whatsoever. However they remain the property of Pakula Tackle unless purchased by MJ. There is no time limit on this. - That any products sent out under the name Pakula will have small royalty. Ie cost of molds = cost of silicone. The amount can be paid off over time. - That it is suggested that as Pakula Logo materials run out that they change over to Zacattack. - Any products under the name Zacattack, or whatever MJ choose to call their business/will have no royalties or payments to Pakula Tackle. - MJ can continue to use the names of products ie Trade Marks at no cost if under the MJ brand. A statement of authority will be given to MJ for this. - Pakula Tackle and MJ will be financially independent. If you change the Brand of current production this shouldn't impact on the current type of business and should in fact increase awareness of the brand and demand for the premium product range. (The forum will revert back to what it was, a product back up forum, not a general chat forum as it is now. ) There will also be section of the web site explaining that the Zacattack range is what is now the current range of Pakula Products. If you are interested in that you are welcome to have it. Web stores are easy to set up as is an Ebay store, but you work it under a hidden name, not a person or place that can be identified. The way it is being done now is very damaging to the brand. A search of the Australian Securities and Investment Commission's records disclosed that this company had been registered on 22 March 2007. It was controlled by Mr Mario Zacaropoulos. Having undertaken this search, Mr Pakula contacted Mr Mario Zacaropoulos as a result of which the latter caused Pakula Lures Australia Pty Ltd to change its name to Zacatak Lures Australia Pty Ltd. It was in that fashion the First Respondent came to have its present corporate name. In August 2007, it came to Mr Pakula's attention that Zacatak continued to market Pakula Lures. He regarded this as a breach of what he saw as an agreement with Mr Mario Zacaropoulos prior to the acquisition of the Pakula Tackle Australia business. These subjects are ones for resolution at trial. On the present state of the evidence, Pakula Tackle's pleaded case for a breach of the contract alleged does not strike me as particularly compelling. Perhaps this, too, was a reason why this cause of action was not pressed as a foundation for the interlocutory relief sought. The causes of action which were pressed in support of interlocutory relief related to asserted infringement of intellectual property rights allegedly enjoyed by Pakula Tackle and allegedly misleading or deceptive conduct on the part of the Respondents. Before turning to these, the account of background facts should be completed. On 19 September 2007, so Mr Pakula deposes, he informed Mr Mario Zacaropoulos that, "because of persistent and flagrant breaches of our agreement", he was "terminating his rights to produce and sell Pakula Lures". Mr Pakula then sought legal advice in relation to these matters. Inferentially, he did this in September 2007. It was to Pakula Tackle's present solicitors that he turned for this advice. Between 24 September 2007 and 13 May 2008, those solicitors directed a series of letters either to Mr Mario Zacaropoulos and his wife in their capacity as the owners of Zacatak or, later, to their and that company's solicitors. In one way or another, the effect of those letters was to repeat the demand made of Mr Mario Zacaropoulos by Mr Pakula in person on 19 September 2007. The letters further foreshadowed the imminent institution of proceedings of the present kind in the event that these demands were not met. Counsel was, apparently after the date of the last of these letters, briefed to prepare the present proceedings. It was not until 19 December 2008 that proceedings, including the present claim for interlocutory relief, were instituted. This concern, of course, is based on his perception that the latter relate to the business conducted by Pakula Tackle rather than, as the Business Sale Agreement would suggest, a business conducted by Gamefish Central. For his part, Mr Mario Zacaropoulos deposes to the gradual development of goodwill in the game fishing industry on the part of Zacatak since its establishment. Zacatak's business activities are the manufacture and sale of fishing lures and accessories. Zacatak operates from the home of Mr Mario Zacaropoulos and his wife at Nelson Bay in New South Wales. Its business is promoted by advertising in fishing magazines, advertising in the New South Wales Game Fishing Annual Journal, on its website and by direct contact with retailers. On behalf of Zacatak, Mr Mario Zacaropoulos attends and Zacatak sponsors as many fishing tournaments as possible to promote the company's products. In this regard he details in his affidavit (para 24) in a non-exhaustive way game fishing sponsorships and tournaments to which Zacatak is presently committed or in which it has participated in 2009. In all, Mr Zacaropoulos estimates that Zacatak has invested $10,000 in these events to date. Mr Mario Zacaropoulos has deposed, and it does not seem to be controversial, that in the game fishing industry in Australia the busiest part of the year is between September and May with the months February, March and April being "extremely busy". During this time Zacatak's major clientele is found in the Australian market. For the balance of the year Zacatak endeavours to service overseas clients. Mr Mario Zacaropoulos estimates that about 70% of Zacatak's business comes from the Australian market with the balance, 30%, coming from overseas customers. Were Zacatak to be restrained from trading, Mr Mario Zacaropoulos estimates that its potential losses could be as high as $30,000 per month (I assume in gross) with stock losses of up to $5,000 per month. Further, he deposes that Zacatak's continued presence in the game fishing industry is "fundamental" to its maintaining a successful business. His expectation is that, should Zacatak, he and his wife be restrained from trading or, as the case may be, being concerned in trading, they would suffer a loss of reputation and standing in the game fishing industry which it would be "nearly impossible" to re-establish. He bases that statement upon his experience arising from some 25 years involvement in the game fishing industry. None of these statements as to the effect interlocutory injunctive relief may have on repute seems inherently improbable. Though they are subjects which may be explored in greater depth and perhaps yield different conclusions as to the degree of severity of impact of fund injunctive relief, it seems reasonable to take them into account at this stage of proceedings. Zacatak provides the main source of income for Mr Mario Zacaropoulos and his wife. On behalf of Zacatak, Mr Mario Zacaropoulos denies "categorically" that it has breached any trade mark held by Pakula Tackle or that it has infringed any copyright which is vested in that company. He makes a like statement on his behalf and on behalf of his wife. He deposes that Zacatak does not manufacture or sell any lures or other item which is the subject of registered trade marks held by Pakula Tackle or by any other persons. I turn then to the trade mark and copyright claims. In its filed statement of claim (para 5) Pakula Tackle alleges that it is and at all material times the registered owner of registered trade mark numbers 753420, 740423, 753417 and 753419. The evidence though, as tabulated above by reference to a search of the trade mark register is that each of these trade marks is registered not to Pakula Tackle but to Gamefish Central. In, it seems, a belated recognition of this and in his capacity as a director of Gamefish Central, Mr Pakula, in a further affidavit filed by leave on the day on which the interlocutory injunction application was heard, deposed that Gamefish had "consented to [Pakula Tackle] bringing any action or seeking to enforce rights associated with the registration of trade marks, be they retrospective or prospective infringements". He further deposed that Pakula Tackle used on a day to day basis all trade marks registered in Gamefish Central's name and, for that matter, other trade marks registered in his name. I note that the statement of claim makes no reference to the use by Pakula Tackle of any trade marks registered in Mr Pakula's name. In the course of submissions on behalf of Pakula Tackle attention was particularly focused upon registered trade mark number 753420 and an alleged infringement by "the respondents" of rights said to be enjoyed by Pakula Tackle in respect of that trade mark by the use of another registered trade mark which comprises the words "Zacatak Lures Australia". The trade mark is represented in a stylised format position within an image described as "flag Australia atop fishing rods crossed between two marlins". Such a trade mark, trade mark number 116590, is owned by Zacatak and was registered on the Trade Marks Register from 11 April 2007. Registered trade mark number 753420 comprises the words "Pakula Lures Australia" over an image described as "bird, prey with wings outstretched atop 2 fishes and scroll". It has been registered with effect on and from 23 January 1998. The oral and written submissions made on behalf of both Pakula Tackle and Zacatak in respect of trade mark law pertinent to whether there existed a serious case to be tried in respect of infringement were noteworthy for their generality. Section 120(1) of the Trade Marks Act provides that a person infringes a registered trade mark if the person "uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered". While a mere possibility of confusion is not enough --- for there must be a real, tangible danger of its occurring ( Reckitt & Colman (Australia) Ltd v Boden [3], at pp 94, 95; Sym Choon & Co Ltd v Gordon Choons Nuts Ltd . [4], at p 79) --- it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt. (iii) In considering the probability of deception, all the surrounding circumstances have to be taken into consideration. (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and the character of the probable purchasers of the goods: Jafferjee v Scarlett [5], at p 120). That there might possibly be public confusion is not sufficient. Approaching the question in this way and as a matter of general impression, my conclusion at this interlocutory stage is that Pakula Tackle's infringement case is weak in respect of any infringement of such rights as it may enjoy in respect of registered trade mark number 753420. I doubt whether, even drawing on imperfect recollection, a potential customer would be confused as between the two marks. There are obvious differences which one might think would play upon a recollection, the eagle in the case of the Pakula Tackle mark and the Australian Flag in the case of the Zacatak mark. The names themselves are radically different. Additionally, in respect of Zacatak's trade mark number 1169590, I note, as in like fashion as did Foster J in the Sebel case, that this is a registered trade mark. The Registrar must therefore have considered that this trade mark had about a distinguishing features which permitted its registration under the Trade Marks Act . The Registrar's opinion is not binding and his reasons for registering trade mark number 1169590 are not in evidence. Nonetheless, at this interlocutory stage, that Zacatak's alleged infringement arises, in part, from its use of its own registered trade mark, is not a factor which tells in favour of the grant of interlocutory injunctive relief to Pakula Tackle. For the reasons which I have given, I am not persuaded, in respect of registered mark 753420, albeit at an interlocutory stage, that Pakula Tackle has made out even a serious question to be tried. That conclusion renders strictly unnecessary for me to consider the ramifications of registered trade mark 753420 being registered to Gamefish Central, not Pakula Tackle. Section 106 of the Trade Marks Act makes provision for the assignment of a registered trade mark. Such an assignment may be made either with or without the goodwill of the business concerned in the relevant goods or services. The term "assignment" in relation to a trade mark is defined by s 6 of the Trade Marks Act to mean "an assignment by act of the parties concerned". No assignment of any of the marks pleaded is evidenced. Pakula Tackle is said to be an authorised user, but that is not the way its case is cast in the statement of claim. Further, the evidence led on its behalf to date on that subject is noteworthy for its vague generality. Some brief reference ought to be made to other trade mark infringement claims said to give to rise to a cause of action on the part of Pakula Tackle under s 120 of the Trade Marks Act . Gamefish Central has the word mark "Witchdoctor". Zacatak uses the word "Doctor" to describe a device which seems very similar to one manufactured and retailed by Pakula Tackle. I doubt that the use of the word "Doctor" by Zacatak even rises above the level of possible confusion, at least as presently advised. The same conclusion is open as between Pakula Tackle's registered word mark "Cockroach" (trade mark 753419) and Zacatak's use of the word "Roach". Gamefish Central has the benefit of registered trade mark 753417 in respect of the word "Lumo". This word appears on Zacatak's website in at least three instances to describe particular lures (see page 89 of the exhibits to Mr Pakula's affidavit, items 138, 155 and 157 in the reproduction there of particular lures). Gamefish Central may well have cause for concern about these uses on or in respect of products. It though is not the Applicant and Zacatak must meet the case as pleaded. I turn to consider to copyright issues. In his further affidavit Mr Pakula deposes that, in his capacity as a consultant to Pakula Tackle, he was the author of "various copyright material" that was used for the business of that company. He further states that in that consultant capacity, he "continued to maintain and update the content on the website and was the sole author of such material put on the website". The relationship as between Mr Pakula and Pakula Tackle during the term of his "consultancy" is not stated. Nor is there any reference to his relationship with Tailored Marine whilst a "consultant" to that company. Perhaps the use of the word "consultant" is intended to mean that he was not an employee. Were he to be regarded as an employee then website content developed by him in the course of that employment would yield a copyright vested in his employer: see s 35(6) of the Copyright Act . Under the terms of the Business Sale Contract as between Pakula Tackle and Gamefish Central, the "business" is defined (cl 1.1) to include "the chattels, fittings, fixtures and furniture, goodwill, intellectual and industrial property, licences, permits, plant, quotas and software of the business, together with any other items referred to in this contract as forming part of a business" (emphasis added). Such copyrights as Pakula Tackle then enjoyed therefore passed to Gamefish Central under the terms of the Business Sale Contract. The agreement concerned is in writing, therefore complying with the requirement found in s 196 of the Copyright Act that an assignment of copyright does not have affect unless it is in writing signed on or behalf of the assignor. No written agreement evidencing a re-assignment of that copyright by Gamefish Central to Pakula Tackle is in evidence. What is pleaded (para 32 of the statement of claim) is that the Applicant is the owner of the copyright in the material on its website. That material is alleged to have been developed under a contract of service to Pakula Tackle. It is further alleged that Pakula Tackle has progressively devised and compiled the marketing material on the website from 1997. Though not raised in submissions by Pakula Tackle, I accept that s 196 of the Copyright Act does not prevent the creation of an equitable interest in copyright pursuant to an oral agreement for value to assign copyright: Acorn Computers Ltd v MCS Microcomputer Systems Pty Ltd (1984) 6 FCR 277. No such agreement is pleaded and evidenced in relation to Pakula Tackle. What is deposed to is an assignment by Gamefish Central to Pakula Tackle of the right to litigate the infringement of copyright. When this assignment occurred is not evidenced. For its part, Pakula Tackle sought comfort from a more recent decision, Global Brand Marketing Inc v Cube Footwear Pty Ltd (2005) 65 IPR 44. This assignment of rights to sue is an assignment not of a bare right of action but the assignment of a right which is incidental to the assignment of intellectual property rights: see Taypar at FCR 491-2; IPR 153. The distinction between an assignment of copyright simpliciter and an assignment of copyright coupled with an assignment of rights to sue for infringement, whether past, present or future, does not appear to have been the subject of consideration in Dixon v Masterton . Further, the evidence concerning the assignment of a right to sue from Mr Pakula is in its present form nothing more than a general assertion. Assuming though that Pakula Tackle either enjoys copyright in the material in the website or has a right to sue in respect of infringements of that copyright is there raised, prima facie , an infringement case? The Pakula Tackle website has the hall marks of a trade catalogue. So too does that of Zacatak. A trade catalogue can constitute an original literary work; University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608. The expression "literary work" is defined in s 10 to include: "a table, or compilation, expressed in words, figures or symbols ... ". Trade catalogues are capable of constituting original literary works: University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608; Purefoy Engineering Co Ltd v Sykes Boxall & Co Ltd (1955) 72 RPC 89 at 95. See Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273; [1964] 1 All ER 465; Football League Ltd v Littlewoods Pools Ltd [1959] Ch 637 at 650-651; Blackie & Sons Ltd v Lothian Book Publishing Co Pty Ltd [1921] HCA 27 ; (1921) 29 CLR 396 at 398-399; Real Estate Institute of New South Wales v Wood (1923) 23 SR (NSW) 349 at 352. See at 277-278; 469-470, per Lord Reid, at 286-287; 476-477 per Lord Hodson, at 289-290; 478-479 per Lord Devlin and at 292, 293; 480, 481 per Lord Pearce. In Collis v Cater, Stoffell & Fortt Ltd (1898) 78 LT 613, a decision that has "never been doubted" ( Ladbroke (Football) Ltd at 290; 479) copyright was held to exist in a chemist's catalogue "although it contained `nothing whatever but a simple list' of drugs, etc with names and prices which the plaintiff kept in stock or could obtain to order": Ladbroke (Football) Ltd at 278; 470. That copyright can exist in such a mundane compilation of information readily available to all shows why the skill, judgment and labour in selecting what to include in a trade catalogue will be as relevant as the often very limited skill, judgment and labour involved in putting that selection into written form, in determining whether the compilation has sufficient "originality" to attract copyright. This issue is dealt with fully in Ladbroke (Football) Ltd . The reason is that by s 32 of the Act, "copyright is a statutory right which ... would appear to subsist, if at all, in the literary or other work as one entity", per Lord Hodson at 285; 475. See also Ladbroke (Football) Ltd at 276-277, 290 and 291; 468-469 and 478-479. Copyright in a work will be infringed by the unauthorised reproduction of a substantial part of the work: see ss 36(1) and 14 (1) of the Act. In determining whether that has occurred, it is sometimes said that the question is whether the part taken could by itself be the subject of copyright. This will be the position provided the later work includes qualitatively significant changes to the copies material. The copying is not universal. Original content both in terms of lure illustration and text is evident in Zacatak's website. The question as to whether Zacatak's website, looked at as a whole, is "original" is one for trial. I accept that Pakula Tackle has raised a serious question to be tried in respect of infringement of such copyright rights, if any, as may repose in it in respect of the website. Pakula Tackle also relied upon its pleaded case under s 52 of the Trade Practices Act and s 38 of the Fair Trading Act to ground the interlocutory relief sought. It is important to note how that claim is pleaded: The First, Second and Third Respondents carry on a business and in the course of that business have commenced to supply fishing equipment, apparatus and related accessories including fishing lures, flies, teasers and fish attractants and promote such goods under or by reference to the brand name "Zacatak Lures Australia" in Australia. Members of the trade and of the public purchasing or otherwise acquiring the Respondents' goods under the Respondents' brand name have done so, or alternatively are likely to do so, in the belief, induced by the Respondents' use and promotion of the brand name "Zacatak Lures Australia" that the Respondents' good are the Applicant's goods or that the Respondents' goods have some connection in trade with the Applicant's business. Rather, their individual conduct is alleged only to amount to a contravention of s 38 of the Fair Trading Act . Yet, on the evidence, neither Mr Mario Zacaropoulos nor his wife, themselves engaged in business, as opposed to, engaging, in their capacities as working directors, in the business of Zacatak in their individual capacities. It will further be noted that the conduct alleged in paras 23, 24, and 25 of the statement of claim does not feature in the alleged contraventions of either s 52 of the Trade Practices Act or s 38 of the Fair Trading Act made in para 26 of the statement of claim. There is a disjunct. There are passages in the material on Zacatak's website which give rise to a concern, albeit a concern not particularised as a contravention in the statement of claim, in respect of conduct which may perhaps be regarded as misleading or deceptive on the part of Zacatak. Under this banner we are now manufacturing the Lures and teasers, which we were manufacturing for ten years prior. In this regard, the evidence does not, in my opinion, raise a serious question to be tried. Were the statement of claim amended, the statements made in the passage quoted from the Zacatak website might be thought to raise a question for trial in relation to whether they are misleading as to the provenance of Zacatak's business and whether it is a continuance of a business conducted by others both in the past and presently under the name "Pakula Lures Australia". I remind myself too that a contravention of s 52 of the Trade Practices Act is not established by the mere manufacture and distribution of a product which, though properly labelled with the distinguishing name and mark of the manufacturer, bears great resemblance and is even intended to bare such resemblance to the product of another manufacturer which has and continues to be marketed and advertised: Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited [1982] HCA 44 ; (1981) 149 CLR 191. The Respondents undertake, until the trial of this action or earlier order, to keep full and proper accounts of and relating to the sale of all game fishing lures by the First Respondent. All in all, having regard to its pleaded case and the evidence relied upon in support thereof on the application, there are flaws evident in Pakula Tackle's ability even to prosecute its trade mark and copyright infringement claims. This aside, most of the trade mark infringement claims do not, in my opinion, raise a serious question to be tried. Assuming that questions of standing could be resolved, Pakula Tackle has raised a serious question to be tried in respect of a copyright infringement claim. The pleaded claims for relief relying upon the Trade Practices Act and the Fair Trading Act are not strong. Especially that is so in relation to claims again Mr Mario Zacaropoulos and his wife personally. In effect, Pakula Tackle has delayed some two years in the institution of proceedings and in the seeking of interlocutory injunctive relief. The explanation given for the delay of that length is not compelling. Over all of that time Zacatak has continued to carry on business. It has made future commitments. Those commitments involve third parties. Zacatak's packaging is reproduced in evidence. It is distinct even though is seems that its products bear close resemblance to those of Pakula Tackle. I doubt whether even uncertainty in the game fishing market place will arise from the continued distribution of Zacatak's products as packaged. In the interval between now and trial a modification of Zacatak's website in terms of the undertaking which it has offered will remove adequately, in my opinion, cause for concern as to members of the public being misled or deceived as to Zacatak's business being a continuance of that of Pakula Tackle. That of course assumes, charitably, that the business is that of Pakula Tackle as opposed to Gamefish Central. The strength of Pakula Tackle's causes of action is not such as viewed either separately or totally to warrant in the period leading up to trial a disruption to Zacatak's business operations by the granting of the interlocutory relief sought. The impact of such relief on its operations would not be proportionate to the presently revealed strength of Pakula Tackle's claims, especially having regard to the delay which has occurred. Zacatak has undertaken to give all necessary and proper accounts. I am not presently persuaded that damages or alternatively an account of profits will not offer an adequate alternative remedy in the circumstances. Another factor which is relevant is that it is possible, assuming Pakula Tackle is willing and able to prosecute its claims with due diligence, to offer relatively early trial dates. These factors tell, as matter of discretion, and on the balance of convenience, against the granting of the interlocutory injunctive relief sought. For these reasons the application for interlocutory injunctive relief is refused. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | application for interlocutory injunctive relief prima facie no case established absence of evidence of serious case to be tried interlocutory injunction refused alleged infringement of shape trade mark in fishing lures and fishing equipment by rival trader whether rival trader used the shape of the registered trade mark as a trade mark meaning of use as a trade mark whether goods themselves can constitute a trade mark whether the trade mark must have a separate identity from that of the goods whether the features of the shape travel beyond the functional and technical requirements inherent in the goods whether the rival trader's fishing lures and fishing equipment are deceptively similar to the applicant's fishing lures and fishing equipment no prima facie case of trade mark infringement balance of convenience and justice against the grant of an injunction interlocutory injunction refused. misleading and deceptive conduct s 52 of the trade practices act whether the promotion and supply of fishing lures and fishing equipment by a rival trader is likely to deceive potential purchasers into believing the rival trader's product was put out by or associated with the applicant or that the rival trader is itself associated with the applicant the competing products were sufficiently differentiated absence of evidence of serious case to support application for interlocutory injunction to restrain promotion and supply of the new product balance of convenience and balance of justice against grant of interlocutory injunction in any event interlocutory injunction refused. whether assignment of copyright right to bring an alleged infringement claim alleged infringement of copyright in fishing lures and fishing equipment by rival trader substantial reproduction of copyright material serious case to be tried balance of convenience and justice against the grant of interlocutory injunction in any event interlocutory injunction refused. practice and procedure trade marks trade practices copyright |
The appeal in each application be allowed. 2. Each of the objection decisions the subject of the appeals be set aside. 3. The Respondent will issue amended assessments to the Applicant for the 2003 and 2004 tax years to give effect to order 3. 5. Except as provided for in order 6, the Respondent pay 50% of the costs of the Applicant in respect of the appeals including reserved costs but excluding the Applicant's costs in the Notice of Motion filed on behalf of the Applicant on 10 February 2006. 6. The Applicant pay the Respondent's costs in the Notice of Motion filed on behalf of the Applicant on 10 February 2006. I certify that the preceding one (1) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | orders giving effect to earlier reasons income tax |
2 The applicant, the Australian Competition and Consumer Commission, in its Further Amended Statement of Claim pleaded at para 35 that a meeting between Mr Lancsar and Mr Noonan, both of whom were officials of the Construction, Forestry, Mining and Energy Union, and Mr Hensley and Mr Little of Bovis took place in private and that at that meeting Mr Noonan said words to the effect that the CFMEU would not continue negotiations with Bovis regarding a joint national agreement between the two and would start shutting down projects around the country unless Bovis took immediate action to resolve the union's concerns relating to the use made of sub-contractors by Bernmar and that he wanted the issue of Bernmar's use of sub-contractors fixed now. In the ensuing paragraph (para 36) it is claimed that Mr Noonan impliedly represented that the CFMEU required Bovis to cease acquiring plasterboard services from Bernmar and terminate Bernmar's contract with Bovis as a pre-condition to the CFMEU continuing negotiations with Bovis regarding their national agreement. The particulars indicated that this implied representation arose from the statements pleaded in para 35 and several express oral representations made by Mr Noonan during the private meeting, i.e. ', Noonan said, words to the effect, '[y]ou'll think of something creative. You guys are professionals at screwing subbies, we don't need to tell you how to do your job. In particular, although he did not admit the totality of what was pleaded in para 35 and, in particular, that Noonan said the CFMEU would start shutting down projects around the country, he admitted the implied representation pleaded in para 36. The Court will not lightly permit a party to withdraw an admission where the other party has acted to its detriment on the admission or is otherwise prejudiced by the withdrawal. It is plainly necessary to have regard to all relevant factors including the nature and importance of the admission, the circumstances in which the admission was made, whether the admission was made deliberately or inadvertently, the reason given for the application to withdraw, the detriment or prejudice which might be caused to the other party and the stage which the proceedings have reached, and whether the admission is contrary to the facts. The list of relevant factors affecting the Court's decision will plainly vary from case to case. 6 The ACCC opposes the grant of leave largely on the basis of what it asserts is (i) the unsatisfactory nature of the affidavit put on by Mr Lancsar's legal adviser to explain the reasons why leave is sought; and (ii) correspondence between its own lawyers and Mr Lancsar's legal adviser concerning the admissions generally made by Mr Lancsar. As to the latter, the burden of the letter to Mr Lancsar's lawyers, having acknowledged that he had admitted generally the substance of the factual matters alleged by the ACCC, sought to enquire whether he was interested in cooperating with the ACCC with a prospect of the action being discontinued against him (although the letter did point out it had no instructions in relation to offering him a client cooperation agreement). The letter did not deal explicitly with the admission relating to para 36 of the Further Amended Statement of Claim. Mr Lancsar's solicitor's affidavit and annexed letter simply assert that Mr Lancsar instructed him that he does not recall giving instructions in relation to para 36 of the Further Amended Statement of Claim and that if he gave those instructions to admit to the whole of the paragraph he must have misunderstood the paragraph or made a mistake. He asserts that para 33 is not accurate, "both in relation to the first two paragraphs as well as to the place the alleged words were said". The annexed letter did not refer to the ACCC's correspondence. 7 In my view it is unsurprising no such reference was made. That letter was general in character, having an object of seeking guardedly to secure the cooperation of Mr Lancsar with the ACCC. It is unsurprising that Mr Lancsar gave instructions to his lawyer not to respond to it. The circumstances of the case are, in my view, one where it is in the interests of justice that the withdrawal be permitted. The ACCC might understandably be annoyed at this withdrawal from an otherwise relatively comprehensive series of admissions being made, but I do not consider that any significant detriment or prejudice will be occasioned by the withdrawal. 8 Accordingly I give the leave that is sought by Mr Lancsar. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | application under o 22 r 4 of the federal court rules for leave to withdraw an admission made in a defence of an implied representation underlying facts would have to be proved in any event no significant detriment or prejudice practice and procedure |
The third respondent (Joel) is not related to them. Since 11 November 2002 Lionel and Joel have been directors of the first respondent (JLCS). JLCS does not significantly feature in the case, and where I refer to Harold, Saul, Lionel and Joel as a group, I will call them 'the parties'. 2 Harold and Saul claim that on or about 19 June 1997 they entered into an agreement with Lionel and Joel concerning the establishment of steak restaurants under the 'Squires Loft' trading name (the agreement). In the alternative it is alleged that term (f) is to be implied as a matter of business efficacy. Term (g) is said to be so implied. Particulars of these breaches assert that JLCS has granted a six month licence to The Grill Room Pty Ltd to use the trade mark and/or the logo in respect of its St Kilda restaurant and an option to open four further restaurants, and that from at least 9 March 2005 the mark has been used in connection with The Grill Room's business. Particulars of falsity allege that in March 2004 Lionel gave Harold a consultancy agreement between JLCS and SLCS, and told Harold that he and Joel required SLCS to sign the agreement in order to continue operating a steakhouse restaurant using sauces and meats supplied by Top Cut Industries Pty Ltd (Top Cut), and that in March 2005 Lionel and Joel caused JLCS to grant the licence to The Grill Room to trade using the name Squires Loft in its advertising and on its serviettes and stationery. 8 It is then alleged that in March 2005 JLCS represented to The Grill Room that it was the owner of the trade mark or in a position to grant licences to use the name Squires Loft in relation to restaurants in Australia, and had the authority to grant a licence to use the name without obtaining the consent of any other person, which representations were false. 9 Harold and Saul allege that they are suffering loss and damage and will continue to suffer loss and damage unless JLCS, Lionel and Joel are restrained from engaging in the conduct alleged, and that JLCS, Lionel and Joel have profited from their wrongful acts and conduct. They seek appropriate declarations and injunctions. Rather, they say that in or about June 1997 they orally agreed to grant Harold and Saul a royalty free licence to use the name Squires Loft and the get up and methodology employed by Lionel and Joel in the South Yarra restaurant (the licence) in the City restaurant. The licence was granted to help Harold and Saul at a time when they were experiencing financial difficulty, and because of their family connection with Lionel. As part of the licence Lionel helped Harold and Saul set up the City restaurant, including guaranteeing loans personally, obtaining a liquor licence in his own name, permitting Harold and Saul to adopt the same menu as that used at the South Yarra restaurant, and supplying at cost the particular cuts of meat and sauces used at that restaurant in the City restaurant. 11 Lionel and Joel claim that there were terms of the licence that the City restaurant would adopt common menus and products, pricing of products, stationery, serviettes and corporate livery as that used at the South Yarra restaurant, and that the City restaurant would promote and market the South Yarra restaurant through advertising, references on menus, business cards and stationery. It is said that Harold and Saul breached these terms and thereby evinced an intention not to be bound by the licence, which repudiation Lionel and Joel by their defence accept. 12 It is then pleaded that if there were an agreement such as that alleged, Harold and Saul have been in breach from its outset in that they have never accounted to Lionel and Joel in respect of the profits of the City restaurant. This failure constitutes a refusal to be bound by the agreement, which repudiation Lionel and Joel by their defence accept. 13 As a further alternative, it is said that if there were an agreement such as that alleged, Harold and Saul are in breach in that they do not presently adopt common menus and products, pricing of products, stationery and corporate clothing, serviettes and corporate livery, and are not jointly promoting and marketing the restaurants trading under the name Squires Loft through advertising, references on menus, business cards and stationery. By that conduct Harold and Saul are said to have evinced an intention not to be bound by the terms of the agreement, thereby repudiating it, which repudiation Lionel and Joel by their defence accept. 14 The same breaches are then alleged to have constituted the abandonment of the agreement by Harold and Saul. 15 Lionel and Joel then plead that if there were an agreement as alleged, its terms are so vague and uncertain as to render it void for uncertainty. They also rely in this connection on their answers to Harold and Saul's repudiation claim (see [13]) recorded at [25] to [31]. 25 Harold and Saul deny the claim (recorded at [13]) that they have repudiated the agreement by no longer adopting common menus etc, though they admit that they no longer share common menus etc. 26 In further answer to the claim recorded at [13] Harold and Saul contend that it would be unconscionable for Lionel and Joel to be permitted to terminate the agreement and thereby forfeit their proprietary interest in the intellectual property related to the venture, and they seek relief against forfeiture. As a result, Harold and Saul say they are excused from any non-performance after 31 March 2005 of obligations under the agreement, and that Lionel and Joel are not entitled to terminate it. 29 In this connection Harold and Saul repeat the unconscionability claim recorded at [26]. 30 Harold and Saul also claim that in the circumstances the Court should conclude that it is Lionel and Joel, and not them, who have evinced an intention not to be bound by the agreement, which repudiation Harold and Saul have not accepted. 31 Harold and Saul deny the abandonment allegation recorded at [14], and say that by reason of the matters recorded at [25] and [27], the Court should not conclude that there has been an abandonment of the agreement generally, and in particular in relation to the joint ownership of the intellectual property, especially the name Squires Loft. 34 They say that if Lionel and Joel did grant them the licence, its term was for the life of the business established pursuant to the licence or until terminated by reasonable notice. They were cross-examined at length. Doreen Miller, Harold's wife and Saul and Lionel's mother, made an affidavit, gave oral evidence and was cross-examined. Eric Morgen, a director of Franchise Developments Management Consulting Pty Ltd, made affidavits, gave oral evidence and was cross-examined. 37 On behalf of the respondents, Lionel and Joel made affidavits and gave oral evidence. They were cross-examined at length. Simon Marafioti, operations manager at the South Yarra restaurant, made an affidavit, gave oral evidence and was cross-examined. 38 The main witnesses were Harold, Saul, Lionel and Joel. Much of their evidence was common ground, and was not controversial. However, on the principal issues in the case, in particular whether at a meeting on 19 June 1997 an agreement to the effect alleged in the statement of claim was made, their accounts were substantially at variance. Saul appeared to have a fair recollection of relevant events. Harold's recall was not as good, but his evidence was essentially positive and assured. When assisted by his detailed diary notes, Lionel's recollection was also good. But when his notes were silent, it was not so good. Joel's evidence was more cautious than that of the others, and his recall of detail was not as good. This was probably due to the fact that he was not as much a 'hands on' participant in the restaurant scene as the others. He was more an accountant/business manager than a restaurateur. Nevertheless I was impressed by his demeanour, and considered he was doing his best to give a truthful account of what transpired. There were occasions, in the course of testing cross-examination, when he gave evidence that did not advance his case. Overall, I thought his account of the events that happened and the discussions at the various meetings accorded most with the probabilities. I do not accept the applicants' submission that Joel was an evasive witness. I do not think any of the other principals was knowingly inventing an account that suited his side of the dispute. The main events took place six years before they gave their evidence, and there was thus ample opportunity for confusion as to the detail of what had been said, and perhaps for unintentional reconstruction of what had happened. Some of them constitute important contextual background to controverted issues of fact. Findings relating to the main issues in the case, especially as to whether the agreement alleged by the applicants was in fact made, are dealt with later in these reasons. Lionel was the first to arrive. (b) Squires Loft was the name of a steakhouse restaurant chain in South Africa. (c) In 1992 Lionel opened a steakhouse in Brighton, a Melbourne suburb, under the name Squires Loft Grill House. About a year later Joel joined him in the business, taking a half interest. This was achieved by the incorporation of Squires Loft Pty Ltd of which Lionel and Joel were the directors and equal shareholders. (d) The Brighton restaurant closed in 1995, and Squires Loft Pty Ltd opened the South Yarra restaurant under the name Squires Loft in September of that year. (e) Saul came to Australia in late 1995, and in 1996 was employed in a casual capacity at the South Yarra restaurant. (f) In early 1997 Lionel, Saul and Harold investigated the possibility of opening another steakhouse along the lines of the South Yarra restaurant, and located suitable premises at Goldie Place, Melbourne, where a restaurant known as QC's had operated. (g) On 12 June 1997 a contract for the purchase of QC's business was executed, naming the purchaser as Lionel and/or nominee. (h) On or about 12 June 1997 Lionel and Joel received from their solicitors a draft licence agreement "in anticipation of granting a Licence to operate a Squires Loft Franchise on the QC's premises", which Lionel gave to Saul. The agreement, which was never executed, provided for the grant by Squires Loft Pty Ltd to an unnamed party of a licence to operate at the licensed premises a steakhouse using the methods and techniques developed by the licensor and to identify such outlet by the name set out in par 1 of the Schedule. (i) On 19 June 1997 the parties held a meeting at which they discussed the establishment and operation of the City restaurant and its relationship with the South Yarra restaurant. It is at this meeting that Harold and Saul claim that the agreement pleaded was made. (j) On 20 June 1997 Harold and Saul caused SLCS to be incorporated in order for it to own and operate the City restaurant. They were the directors and shareholders. (k) The lease of the City restaurant premises was taken in Lionel's name because he had a trading history that it was thought would be attractive to the lessor. Harold and Saul agreed with Lionel that they would discharge his obligations under the lease. (l) The liquor licence for the premises was applied for in Lionel's name, again because he had a trading history which it was believed would make it easier to transfer the licence, and would avoid the various steps that a new licensee would have to take. (m) Between July and October 1997 Lionel, Harold and Saul worked on setting up the City restaurant. The cost of the refurbishment and repairs was borne by Harold and Saul. The renovated premises had two kitchens, one to service the City restaurant and the other for the production of sauces, bastes and dressings (sauces) for both restaurants. The second kitchen was sometimes called the 'centralised kitchen'. (n) The City restaurant opened on 14 October 1997. For the first six weeks of operations Lionel assisted with the grilling. (o) Lionel brought from the South Yarra restaurant to the City restaurant the equipment used to produce the sauces which he prepared in the centralised kitchen. Each day he transported to the South Yarra restaurant the sauces required for its operations. (p) Harold and Saul did not charge Lionel and Joel rent for the use of the centralised kitchen. (q) In 1998 the parties held discussions about opening another Squires Loft restaurant, and chose 15A Fitzroy Street, St Kilda as the location. In order to finance and operate the St Kilda restaurant, two extra parties were involved, Messrs Friedman and Day. (r) On 2 November 1998 the Squires Loft Takeaway St Kilda Joint Venture Agreement was executed by entities representing the parties, Friedman, Day and Squires Loft Takeaway St Kilda Pty Ltd, which was described as 'the Custodian'. The purpose of the joint venture was to operate the St Kilda restaurant. The Custodian held the joint venture assets for and on behalf of 'the Participants in the Participants Proportions'. The Participants were Friedman, Saul, Joel and Day. Their respective Proportions were 40, 25, 25 and 10. It was common ground that Saul's Proportion was held for himself and Harold, and Joel's for himself and Lionel. The Participants and their Proportions as appearing in the agreement were designed so as, for the sake of appearances, not to overload the agreement with too many Millers. (s) By clause 6.5 of the joint venture agreement Friedman and Day were responsible for the day to day running of the restaurant. Joel and Saul were to be the exclusive suppliers of sauces and condiments, meat and other items that their centralised kitchen provided. These items were initially to be provided at raw material cost and thereafter as agreed. (t) Menus, business cards and corporate livery were revised to show all three restaurants, the same sauces were used for each, staff for the St Kilda restaurant were assembled from the City and South Yarra restaurants, and gift vouchers could be used at any of the restaurants. (u) In January 1999 Lionel gave Saul the recipes for the sauces to ensure continuity of supply. (v) In July 1999 Joel acquired Friedman's share in the St Kilda joint venture, which he held on trust for the parties. (w) In June 2000 Day retired from the joint venture. Thereafter St Kilda was run by the parties. (x) The St Kilda restaurant had not traded well, and in early 2001 the parties decided to close it. (y) On 30 April 2001 Lionel and Saul had a meeting with Mr Morgen of Franchise Developments, who gave them a presentation on the franchising concept. (z) On 8 May 2001 the parties met with Garry Williamson of the Franchise Centre in Sydney, whose airfare and daily fee they shared. (aa) The St Kilda restaurant closed on 27 May 2001. (bb) On 29 May 2001 Mr Morgen made a further presentation to the parties. (cc) On 25 June 2001 the parties held a meeting in which they discussed the state of play and plans for the future. By agreement, the meeting was taped. (dd) On 6 June 2002 Saul stopped working at the City restaurant. (ee) On 28 June 2002 Saul applied for registration of the name Squires Loft Steakhouse as a trade mark, noting himself as the sole owner. (ff) On 11 November 2002 JLCS was incorporated by Lionel and Joel. (gg) On 16 January 2003 JLCS granted a licence to DL Keran Pty Ltd to open Embers Steakhouse in Brisbane. The licence did not include the right to use the Squires Loft name. (hh) On 27 February 2003 Saul was registered as the owner of the trade mark Squires Loft Steakhouse. (ii) On 29 October 2003 Embers Steakhouse opened. (jj) On 15 September 2004 Saul returned to work at the City restaurant. (kk) On 9 October 2004 JLCS entered into a consultancy agreement with Jodie Meyerov to provide her with advice as to the establishment and management of a steakhouse restaurant in return for a consultancy fee the amount of which has been blanked out in the copy in evidence. Clause 17(2) of the agreement provided that Ms Meyerov "will not use or allow the name 'Squires Loft' .... to be substantially or materially associated with the business carried on by" her. It has been agreed and confirmed that I [Ms Meyerov] will obtain first rights to any new Squires Loft Stores, and will be given a 60 day period to place a deposit on securing the rights for that entity if I so wish. It was also agreed that no other Squires Loft concept store would be opened within a 1 km radius of my existing stores, in City/3 km in suburbs. By agreement, in order to initiate the identification and boost the initial phase of the new entity brand awareness strategy, as a Squires Loft concept store, and based upon my commitment to and continuity of the integrity of the Squires Loft brand, values and standards, I will be permitted to incorporate the Squires Loft branding into the new logo, which after a period of time will be phased out. All artwork, signage, logos etc, would be subject to the consultancy approval and agreement. This is to be an exclusive arrangement between the consultancy and myself. He did not carry out this undertaking. (nn) In November 2004 Lionel told Harold about The Grill House consultancy agreement, and informed him and Saul that Ms Meyerov would trade under the name The Grill Room and would not be able to use the name Squires Loft. (oo) On 9 March 2005 Harold and Saul discovered that The Grill Room was using the name Squires Loft on its windows, napkins and stationery, and that its website described itself as the latest addition to the Squires Loft Group. In default, proceedings would be instituted. (qq) A similar letter was sent to Ms Meyerov, a copy of which accompanied the letter to Lionel and Joel. (rr) By letter of 31 March 2005 JLCS's solicitors informed Harold and Saul's solicitors that after the expiration of 30 days it would no longer be dealing with them "in any capacity whatsoever". JLCS hoped that 30 days would be sufficient time for Harold and Saul to find alternative suppliers. If not, consideration would be given to extending the time. (ss) After the expiration of the 30 day period Harold and Saul had to make their own arrangements for the supply of business cards, menus, napkins, food dockets and drink dockets. (tt) After the expiration of the 30 day period Lionel and Joel instructed Top Cut no longer to supply to the City restaurant Squires Loft sauces, which it was then making according to Lionel's recipes, or Squires Loft specification meats. Top Cut complied with the instruction. Thereafter Saul made all sauces at the City restaurant. (uu) On 5 May 2005 Top Cut agreed to supply the City restaurant with meat products according to Top Cut's own specification. (vv) At some time after the expiration of the 30 day period, when the South Yarra restaurant's supply of cards was running out, reference to the City restaurant was removed from the card and reference to Embers and The Grill Room was added. The former claims that the parties would be equal partners in any venture of opening further steak restaurants under the Squires Loft name through licence or franchise arrangements. The latter contends that Harold and Saul would operate the first licensed restaurant to be located in the City. That restaurant would have a kitchen in which the sauces would be made for use in Harold and Saul's City restaurant and Lionel and Joel's South Yarra restaurant and any future licensed or franchised restaurants. The terms do not sit happily together. A restaurant falling within the pleaded description "the Applicants' Squires Loft restaurant in the City" cannot be the first of the licensed restaurants referred to in (a). The parties are not alleged to be equal partners in that. According to sub-par (b) the City restaurant is Harold and Saul's and the South Yarra restaurant is Lionel and Joel's. As Lionel and Joel point out, if the parties were equal partners in the City restaurant, they (Lionel and Joel) would be entitled to half its profits. See also par 29 of the cross-claim. Obviously Harold and Saul did not embrace this view of their pleading. 41 This is not a mere pleading point. Saul's evidence purports to verify sub-pars (a) and (b). In his first affidavit, which was adopted by Harold, Saul deposed that the parties would be partners in the business of opening further restaurants under the Squires Loft name through licensing or franchising arrangements. He does not say equal partners, though in the absence of any indication to the contrary, the partnership shares would be taken to be equal: Partnership Act 1958 (Vict), s 28(1). In any event, in other parts of his evidence he asserts the partners' equality. Saul goes on to say that the City restaurant would be operated by a company to be set up by him and Harold, which would own and operate the business, be responsible for all costs and expenses and receive all the profits. Plainly a restaurant owned by a company controlled by Harold and Saul, and from which they received all the profits, is not one in respect of which they are equal partners with Lionel and Joel, any more than they are equal partners with Lionel and Joel in the South Yarra restaurant. 42 Despite the parties' divergent evidence on many points, two things were not in dispute. One was that the City restaurant was, through their company, Harold and Saul's. The other was that the South Yarra restaurant was, through their company, Lionel and Joel's. 43 Saul's subsequent evidence that the City restaurant would be "in effect the second licensed restaurant, with South Yarra being the first", cannot be accepted. Whatever be the position with the former, there is no support in the evidence for the view that the South Yarra restaurant was licensed as opposed to owned by Lionel and Joel through their company. 44 For the avoidance of doubt I note that when the parties spoke of a restaurant being "licensed" in the context of "licensed or franchised" they meant licensed as opposed to franchised, and not licensed to serve liquor. 45 A great deal of time was taken in the cross-examination of Lionel and Joel in seeking to establish that in the discussions leading up to and on 19 January 1997 the parties agreed that they would franchise the Squires Loft concept. Lionel and Joel denied that any such agreement was made. More importantly, Harold's evidence does not support it. Speaking of the period May/June 1997, he said he didn't quite understand the concept of franchising. He knew that Joel wasn't keen about it. Harold's own concern was to get the City restaurant up and going. He and Joel did not support franchising "at this time". 46 Given that Harold did not support franchising in May/June 1997, it is highly unlikely that he would on 19 June 1997 have entered into an agreement to expand the Squires Loft concept through franchising. That is the more so when, as he said, he knew that Joel was not keen about it. As I have said, Lionel and Joel denied that there was any such agreement. In the circumstances I am not satisfied that there was any such agreement. 47 Further, certain parts of the taped meeting of 25 June 2001 are inconsistent with an agreement having been reached in June 1997 to implement the franchise concept. Thus Lionel says "Let's just say we're talking about are we going to franchise". 48 The applicants sought to derive assistance from what was said at the 25 June 2001 meeting. They say the transcript shows that Lionel and Joel accepted that they had been in an equal partnership, presumably since June 1997. On a fair reading, the transcript does not support this submission. The passages relied on are set out in Saul's first affidavit. The context in which these passages occur is Lionel's concern that in the parties' dealings to date they have not had a mechanism for resolving deadlocks. So, what I'm proposing is this between the four of us we saying we're holding a partnership that is going to be an equal one . So within the frame of that there should be each member having a vote of their own. So everyone gets a vote on every issue, okay? 49 The St Kilda restaurant closed about a month before the 25 June 2001 meeting. Harold and Saul had the City restaurant. Lionel and Joel had the South Yarra restaurant. With the St Kilda restaurant gone there was no business or venture subsisting between the parties that could be described as a partnership. What Lionel was proposing was a structure that could be put in place "going forward", to use his expression. It was, as he twice said, a proposal. More importantly, one element of the proposal was that there would be a partnership that was "going to be an equal one". His was not simply a proposal that an existing equal partnership contain a deadlock-breaking mechanism. The whole proposal was entirely futuristic. Lionel later reinforced this by saying "I've said quite clearly so has Joel that there will be a four way partnership of what we are talking about here". 50 Joel was cross examined about the taped conversation. He was taken to the passage set out above, and it was put to him that Lionel was saying "there is a partnership between the four of you". Joel's response was that Lionel was just putting forward a proposal as to what could happen in the future. 51 It is of course for me, and not for a witness, to determine whether the conversation supports the view that the alleged partnership agreement was made. I share Joel's view. In my opinion a dispassionate observer reading the transcript of the conversation in the context of the events that had happened could not find in the discussions it records an acknowledgment by Lionel and Joel that there was at that time a subsisting equal partnership in existence, let alone an agreement of the type alleged to have been made in June 1997. 52 In support of their claim that par 3(a) of the statement of claim was sustained by the evidence, the applicants relied on Lionel's acceptance that Harold and Saul would be given the opportunity of being involved in any future Squires Loft venture that he and Joel might contemplate. Joel's evidence was to much the same effect --- that if the "right opportunity" arose, they would be given the chance to be involved. Lionel in fact offered Harold the opportunity to be involved in the Embers restaurant, though that was not truly a Squires Loft venture, but Harold declined. In my view this evidence does not assist the applicants to establish that at the 19 June 1997 meeting the parties in fact agreed to be equal partners in any future venture of opening steak restaurants under the Squires Loft name through licence or franchise arrangements. As put by Joel, whose evidence I accept, if the right opportunity arose, it would be discussed with Harold and Saul. Neither Lionel nor Joel was speaking in terms of an existing obligation to include Harold and Saul. Until relations broke down the parties were involved in common aspects of the City and South Yarra restaurants, and Lionel and Joel were saying no more than that they would talk to Harold and Saul about any future opportunity. Obviously, for the parties to proceed together in some new venture would depend upon them all agreeing as to the basis of their respective participations. 53 The applicants attached much importance to the evidence of Eric Morgen. He said his understanding of what he was told by Saul, possibly in Lionel's presence, was that the four of them were "partners in a company called Squires Loft Pty Ltd that operated from 12 Goldie Place". His 29 May 2001 presentation to the parties was headed "The Partners Squires Loft Pty Ltd" and was addressed "Dear Saul, Lionel, Harold & Joel". This is said to provide compelling evidence that all four considered themselves part of a partnership group. 54 Lionel accepted that either he or Saul said the parties were all four partners in the business, though it would have been more accurate to say there were two partners in the City restaurant and two in the South Yarra restaurant. In any event, he said "we all four were partners in the business". 55 As Lionel acknowledged, it would have been more accurate for the parties to have been described as two partners in the City restaurant and two in the South Yarra restaurant. However it was not inaccurate to describe them, in a loose sense, as partners in the business. As Lionel said, they were in a sense partners. There were aspects of the two restaurants that were conducted in common: the sauces, joint promotion, common meat supplier of specified cuts of meat for example. All four did work together. Having regard to this, there was nothing inappropriate in Saul or perhaps Lionel describing the parties as partners. There was certainly no occasion at either meeting with Mr Morgen for the parties to engage in an argument about their status as a group. They were there to hear about franchising. 56 In his written and oral evidence Mr Morgen described the parties as partners in Squires Loft Pty Ltd. His presentation was so headed. Whatever they were, the parties were not partners in Lionel and Joel's company, in which they had no interest at all. But again there was no occasion at the second meeting to tell Mr Morgen that he did not understand the difference between a partnership and a company structure, a matter that was entirely peripheral to franchising. 57 I do not agree that Mr Morgen's evidence provided significant support for the applicants' contention that the parties were then equal partners let alone equal partners in any venture of opening further steak restaurants under the Squires Loft name through licence or franchise arrangements in terms of par 3(a) of the statement of claim. Apart from any other difficulties, the point of the meeting with Mr Morgen, more than four years after an agreement in those terms was alleged to have been made, was to find out more about franchising so the parties could decide whether to go down that path, not to explore with him the detail of their complicated business relationship. 58 The applicants contended that the fact that in various documents the parties referred to the City and South Yarra restaurants as parts of the "Squires Loft Group" supported the allegation in par 3(b) of the statement of claim. Both Lionel and Joel said this was a marketing tool to promote both restaurants. The fact is, as Joel pointed out in this connection, that while the two restaurants (and later St Kilda) co-operated in certain respects, the ownership structure of each was different. The City restaurant belonged to Harold and Saul through their company. It was neither licensed nor franchised. The South Yarra restaurant was owned by Lionel and Joel through their company. It too was neither licensed nor franchised. St Kilda was a joint venture. When established it had two additional investors, who were not otherwise involved with the parties. It was not a partnership, and it was not licensed or franchised. I do not consider that the promotional reference to the Squires Loft Group points to an agreement in terms of in par 3(b) that the City restaurant was a licensed restaurant of the variety contemplated by sub-par (a) or that its centralised kitchen would service any future licensed or franchised restaurants. 59 Nor do I accept that it was agreed at the 19 June 1997 meeting that the City restaurant would be the "flagship" restaurant. The South Yarra restaurant was first in time. It was an established institution. Its concept was to be used in the City restaurant. The City restaurant might not be a success. It was, as the parties acknowledged, in an out of the way location. In order to attract custom Harold and Saul, or their employees, had to distribute steak portions in a nearby busy thoroughfare. In those circumstances, the probabilities are strongly against the yet to be established City restaurant being identified as the flagship. I accept Lionel's evidence that, though 'flagship' was part of his vocabulary, he did not use it in connection with the establishment of the City restaurant. 60 The applicants have not persuaded me that on or about 19 June 1997 an agreement was made in terms of par 3(a) of the statement of claim, or that the City restaurant would be "the first licensed Squires Loft restaurant" and the flagship restaurant. To the extent that the other terms in par 3 are predicated on sub-par (a) --- "through licence or franchise arrangements" --- they have not been established. Sub-paragraph (f) alleges that it was orally agreed that the parties would be joint owners of the intellectual property related to the venture, including the name Squires Loft. The applicants have not persuaded me that an agreement to this effect was made. First, in his initial affidavit Saul purports to verify others of the oral terms alleged (ie (a) to (e)) in par 3), but says nothing about sub-par (f). In latter affidavits he supplements the relevant part of the first dealing with the June agreement in certain respects, but again does not mention sub-par (f). At this point in time if we get knocked over in the street they are left with no problem whatsoever in their lives. We are talking about a company that we authentically have no real value over the intellectual property. Now if you can't see that that is you. So if it is to go forward then let's give me a right to it or otherwise say no Lionel .... What right do I have to it? Absolutely none Dad so can't you see that? In cross-examination he agreed that the starting point was that he knew that the name Squires Loft was owned by Squires Loft Pty Ltd, the company owned by Joel and Lionel. (I interpolate that Squires Loft Pty Ltd is not a party to the proceeding. ) It was put to him that his case was that at the meeting Lionel and Joel gave/transferred to him an ownership interest in the name Squires Loft. He answered "By virtue of the formation of our company, yes". It was then put to him that Lionel never said that he was giving him an ownership interest in the name. He replied "In the company that would be going forward, yes, he did say so". It was then put to him that Joel had not said that he was giving him any ownership interest in the name. He accepted that Joel had not done so in "those exact words". 64 It seems to me to be unlikely that both Harold's answers as to how his company acquired an ownership interest in the Squires Loft name can be correct. That is to say, the company must either have acquired an interest by virtue of an agreement that it could use Squires Loft in the company name ("By virtue of the formation of our company") or because Lionel and/or Joel orally gave it to the company. 65 His initial answer to the question whether on 19 June 1997 Lionel and Joel gave/transferred an ownership interest in the name was not "Yes", but "By virtue of the formation of our company". It was only when it was put to him that Lionel said "I'm giving you an ownership interest ..." that Harold, in my view opportunistically, assented. His later affirmative answer to the same puttage was equally opportunistic. If it was true that Lionel and/or Joel had expressly given the company an ownership interest in the name, then it was not true that he and Saul acquired that interest by virtue of the formation of their company. 66 The true position in my view appears later in Harold's cross-examination. It was put to him that at the meeting there was no mention of a transfer of the ownership of the rights in the name Squires Loft to him or Saul. Units, shares, whatever the term was at the time. In other words, there was no oral gift or transfer. The existence of ownership rights was either to be implied from the permission granted to use the name as part of SLCS's name or from the establishment of an entity in which all four would have shares or units. 67 Fourth, Saul's evidence was also unsatisfactory. I have already mentioned that his affidavit material does not purport to verify the gift or transfer of the name Squires Loft. Like Harold, Saul knew that the name Squires Loft was owned by Squires Loft Pty Ltd. In the course of cross-examination it became clear that he did not understand the difference between being given the right to use a name owned by the donee (ie a licence) and the grant of an ownership interest in the name (ie an assignment). It was at the meeting on 19 June 1997 by virtue of the fact that we registered our company the next day in Squires Loft's name. It was given to me to use and trade under, and grow my business under. It later assumed importance when the four began researching franchising. 68 Although he denied that ownership of the name or mark at all times remained with Squires Loft Pty Ltd or Lionel and Joel, he ultimately fastened on his and Harold's use of the name in their business, and not on any actual grant of an ownership interest in the name. And, as I say, I was trading under the name --- the name my company's registered in the name. As is apparent from what I have said, I am influenced in my assessment of Saul's evidence by the fact that in his extensive affidavit material (five in all) he did not verify the term in par 3(f) of the statement of claim relating to ownership of the name. 69 Fifth, the draft licence agreement proposed by Lionel and Joel's solicitors tells against any agreement to confer ownership rights in relation to the name. The agreement was never executed. However, it was handed to Saul with Lionel's annotations in the margins. One annotation drew attention to clause 3.32 dealing with the licensee's obligations in relation to intellectual property. At the end of clause 3.32.2 Joel has added the words "unless with the licensor's permission". In his evidence Lionel drew attention to these annotations and said that it was never his intention that the printed words of clause 3.32.2 would apply to Harold and Saul. 73 There is no indication in the evidence that Saul, to whom Harold left the detail of the document, ever disputed the import of these provisions. Although, as I have said, the licence agreement was never executed, it is clear that it was Lionel and Joel's intention that what was to be given to Harold and Saul was a licence to use the Squires Loft name and not the grant of ownership rights in the name, and that this was made known to Saul, who had the carriage of this aspect of the matter for the applicants. 74 Sixth, Saul's letter to Joel of 11 October 2004, in which he undertook to obtain forms for the transfer of the trademark registration to Lionel and Joel, is inconsistent with an agreement having been reached in June 1997 giving Harold and Saul an ownership interest in the name. 75 Finally, I accept the respondents' submission that in the context of licensing and franchising, business people do not "give away" their intellectual property. The very core of licensing and franchising is the owner's retention of ownership and the grant to the licensee or franchisee of the right to use the property. 76 It follows from what I have said at [61] to [75] that I do not accept the applicants' submission that the Court "can readily find an express agreement upon the common ownership of the 'Squires Loft' name ... in accordance with the evidence of Saul and Harold". Nor do I accept that Lionel and Joel's evidence that Harold and Saul could use the name in the City restaurant for as long as they wished, though there was no agreement that the parties would be joint owners of the name, was "tailored". Agreement to be inferred? I will assess them one by one, though I will need eventually to view them as a whole. 78 The fact that no value was placed upon any goodwill of the Squires Loft business in the balance sheet for the financial year leading up to the June 1997 agreement does not to my mind suggest that the inference should be drawn. The point was not explained, but would seem to be that because the name had no value, there was likely to have been an agreement that it was owned in common, whereas such an agreement would be less likely, or unlikely, if it did have some value. I find this unpersuasive. In any event, the accounts in question were for internal use, and there was no need in this connection for the goodwill to be valued. Lionel's evidence was he placed great value on the name Squires Loft at the time these accounts were prepared. Joel agreed that if a value were to be attributed to the name Squires Loft it would be recorded as a non-current asset. But he said there was no reason to value the name. He denied that he had put no value on the name because it had no value in 1996. 79 The fact that no restrictions were placed by Lionel and Joel upon Harold and Saul's use of the name merely means that they were at liberty to use it, unconditionally, in the City restaurant for as long as they wished. It indicates the amplitude of the agreement that was undoubtedly made, but provides no occasion for expanding it. I refer in this connection to the comments I have made about the confused nature of Harold's and Saul's evidence on this point. 80 How the fact that at meetings after 25 June 2001 Joel said to Saul words to the effect that "you are secure and a part of the future growth" points to an agreement that the parties were joint owners of the name was not explained. I do not see that it does. Presumably the security referred to is Saul and Harold's City restaurant. That was their security, and one of the things that constituted it was their ability to use the name in the running of the business. We know from Joel's evidence as a whole, that when he used the word "secure" in this connection he did not mean that Harold and Saul had ownership rights in the name. 81 The fact that at the time the Goldie Place premises were being renovated Harold and the manager of the South Yarra restaurant designed a new logo which was then used in the two restaurants, is consistent with undisputed evidence that Harold and Saul were entitled to use the name in the conduct of the City restaurant. It does not lead to the conclusion that the parties jointly owned the name. 82 The next matter relied on is that Saul often raised with Lionel and Joel the question of registering the name as a trade mark. It is said that Lionel and Joel's response was that it was unnecessary to register it, and not that Saul had no interest in the name. The transcript passage relied on exposes a less clear cut position. While Joel initially assented to the suggestion that Saul said "you should all" register the name, it later became clear that his assent was not to "you" meaning the parties, but to "you and Lionel" as its owners. --- We were sitting in a meeting and Saul proposed that we should --- well, we should --- Lionel and myself should register the trade mark. And we just felt that because we were fine and we owned the companies, there was no real external threat of somebody taking our names, so we thought it we felt it wasn't necessary at that time. What Saul is saying is that all four of you should register Squires Loft as a trade mark? --- Because he didn't own it. I am suggesting to you on the facts of what happened that Saul said to you on a number of occasions that the four of you should register the Squires Loft name as a trade mark? --- I would have to say that Saul was saying, we should register --- when I say register, the name should be registered. ... We should protect the trade mark, Squires Loft. --- We didn't believe --- Lionel and myself didn't believe it was necessary. --- We never gave permission. But I am suggesting to you that he said that to you? --- Well, it wasn't for his to register. --- I don't believe I would have said it like that. --- We just said, we are not going to register it. --- He might have said that. And will suggest to you, in these meetings, you said to him, words to the effect, you didn't care if he did? --- I couldn't say I don't care, because it is my company. Of course I care. I am suggesting to you at these meetings that you said to him, when he said that to you, that you didn't care if he did go ahead and register it himself? --- We, I do care, because it is my name. I own the name. The reason Joel gave for denying that Saul had said that "all four" should register the name was that "he didn't own it" and "it wasn't ... his to register", and "it is my name. I own the name". In connection with Joel's apparent claim to personal ownership, as in both "my name" and "my company", it was a feature of his evidence that he often used "I" and "my" without thereby meaning to exclude Lionel. The applicants say that Lionel and Joel's response to Saul's demand that the name be registered was not that Saul had no interest in the name. It is apparent from the foregoing that the passage from Joel's evidence relied on by the applicants to establish this, does not do so. 84 Furthermore, in the taped discussion of 25 June 2001 Saul used the fact that he and Harold had no interest in the Squires Loft intellectual property to bolster his case for obtaining something in writing. See [62]. 85 It is to be remembered that when Saul raised the question of registration, it was always that the name should be registered, not that he alone or as one of the parties was entitled to be registered. His later threat that he would register the name if "you" would not has as its very basis that those who owned the name should register it. As Lionel pointed out, Saul's claim was that the name should be registered, not that it should be registered in the parties' names. Registration in Lionel and Joel's names would protect the interests of all four as against third parties, which is where the risk of non-registration was thought to lie. I accept Lionel's evidence, both written and oral, that Saul wanted him and Joel to register the name to protect their rights in the South Yarra restaurant and Harold and Saul's in the City restaurant. 86 The fact that in January 1999 Lionel gave Saul the sauce recipes without demanding any payment or imposing any conditions does not seem to me to say anything about the ownership of the name Squires Loft. 87 When Lionel and Joel discovered that Saul had obtained registration of the mark, the fact that they did not immediately challenge it is said to show a total lack of interest on their part. That overstates the position. Lionel's evidence was that Harold was the first to find out about the registration. Harold told him he had been to see Mark Dobbie of Middletons about it. Lionel told Harold that he and Joel had decided not to rock the boat by disputing Saul's registration, in light of the circumstances that existed between Harold and Saul at that time, and because of Harold's assurances that he was going to seek advice as to how the registration could be overturned. Joel's evidence was that he didn't pursue the matter with Harold because Lionel had told him that Harold was looking into the matter with Middletons who were going to investigate the matter and have the registration set aside. 88 It is also to be remembered that at this stage the parties were not at war. It appears to have been common ground that registration of the mark in anyone's name would protect the parties from the risk of third parties using it. 89 When Lionel and Joel's reaction to Saul's registration is seen in the above context, it does not seem to me to point towards the existence of an agreement that the parties were joint owners of the name. 90 Lionel's statement to Harold that the Embers restaurant would not be using the Squires Loft name may suggest that Harold had a concern about a third party using the name. However, it does not to my mind point to an argument that the parties jointly owned it. 91 The applicants contend that the fact that Lionel told Harold and Saul that Ms Meyerov had not been given the right to use the name for The Grill Room points to an agreement as to ownership of the name. The evidence upon which they rely in this regard does not support the contention. What Lionel agreed he said to Saul was that Ms Meyerov was not going to trade as a Squires Loft restaurant, but was going to use the name in support of her business. 92 The applicants then rely on what they describe as an admission by Lionel and Joel that there were difficulties perceived by them in using or licensing the name without reference to Harold and Saul. The passage in Joel's evidence to which they point does not sustain this contention. Joel denied that the agreement recorded in the addendum to the agreement with Ms Meyerov would be of great concern to Harold. She was trading as The Grill Room. As a marketing tool she was allowed to use the Squires Loft name in connection with her logo so that people would see that "it is a Squires Loft product". He pointed out that The Grill Room was closer to the South Yarra restaurant than to the City restaurant, and that he did not look on Ms Meyerov's use of the name as a risk but as a positive in bringing more people to the area. There is no admission to the effect asserted. Lionel denied the suggestion that there would be an extremely adverse reaction from Harold and Saul if anyone else (including Ms Meyerov) was granted any rights in respect of the name. 93 In April 2004 Joel discussed with Harold the possibility of someone buying out Saul's interest in the City restaurant if he was looking to sell it. The applicants say this is only explicable if it were Joel's understanding that Harold and Saul had an interest in the name "as otherwise there would be little to no goodwill for a purchaser to buy into". I find this unpersuasive. Harold and Saul had a licence to use the name. The respondents correctly respond that if this contention were correct, a McDonalds franchisee would have trouble selling its restaurant because it had no intellectual property rights in the trade mark 'McDonalds'. 94 The applicants contend that there was motivation for Lionel and Joel to involve Harold and Saul in "a wider enterprise". The South Yarra restaurant was not making good money, and both their wives were receiving Centrelink payments. Even if these matters provide some motivation as suggested, they do not to my mind point to joint ownership of the name. It is not even contended that they do. 95 The applicants claim that having the lease and liquor licence in the name of Squires Loft Pty Ltd for both the City and St Kilda restaurants demonstrates the commercial interest of Lionel and Joel in growing the business. That may be so, but it throws no light on the ownership of the name. The contention does not even purport to do so. 96 Finally, it is said that the common marketing of the restaurants as part of the Squires Loft Group demonstrates Lionel and Joel's "understanding of the positioning of the restaurants as part of a common purpose". As with the two preceding matters, this one does not even pretend to point to joint ownership of the name. It is as if, at the end of this lengthy list of matters, the draftsman has forgotten that they are matters from which it is said that an agreement about the common ownership of the name was reached; not that they indicate some wider enterprise, an interest in growing the business, or an understanding of the positioning of the restaurants. 97 Of necessity I have examined the matters in the list one at a time. I have also viewed them as a whole. Either way they do not come near to persuading me that it is appropriate to infer from them that an agreement was reached as to the common ownership of the name Squires Loft. Agreement to be implied? I will also defer consideration of the implication of the term in par 3(g) --- the parties would not make any use of the intellectual property related to the venture (including the name) without the consent of all of them. It will be recalled that the latter term is not alleged to have been orally agreed to at the meeting, but only to be implied as a matter of business efficacy. The par 3(f) term is alleged to have been oral and in the alternative to be implied as a matter of business efficacy. What was agreed at the meeting? Lionel and Joel accepted that it had been agreed that Harold and Saul would establish the City restaurant, that it would trade under the name Squires Loft, and that its kitchen would be used to prepare sauces for the two restaurants. They denied that the City restaurant would be the flagship, that any agreement was reached as to any future licensed or franchised restaurants or that the City restaurant would be a licensed restaurant, except to the extent that they agreed that Harold and Saul could use the Squires Loft name and logo. I have accepted their evidence in these respects. 100 There is also some agreement about the topics in par 3(c), (d) and (e). They could get meats from our supplier, which was our specifications. We let them use the name and we did try, I suppose, to get stores running fairly similar. Similar type wine lists, similar type foods. He also said it was agreed that there would be common presentation and marketing through advertising, references on menus, business cards and stationery. 102 He did not accept that it had been agreed that the purchasing of products would be undertaken centrally. Each restaurant was to, and did, buy its own products. He accepted that the meat purchased by the two restaurants from Top Cut gave better purchasing power. South Yarra purchased the serviettes and stationery, and the City restaurant bought its requirements from South Yarra at cost. 103 It can thus be seen that although Joel's evidence was directed to an agreement as to the way in which the two restaurants would work together, he essentially accepted the terms in par 3(c) to (e), with the qualification as to (e) that there was no central purchasing of products. It was common ground in the evidence that there was no central purchasing. 104 Lionel's evidence was to the same effect. At meetings leading up to the one on 19 June 1997 agreement was reached that there would be common pricing of products, stationery, corporate clothing, serviettes and livery. It was also agreed that the two restaurants would jointly promote and market each other. South Yarra allowed the City restaurant to purchase its meat from Top Cut under South Yarra's contract. 105 The applicants have not satisfied me that the agreement alleged in par 3 was entered into on or about 19 June 1997 or at any other time. I find that the agreement was that the South Yarra restaurant had corresponding obligations. 107 The applicants took exception to the respondents' use of the word "licence". It was said that the language of the discussions in June 1997 was not about a licence. I agree that the parties did not use that word. As Joel said --- "we let them use the name" --- which is consistent with the development of an understanding that Harold and Saul could use the name, even if Lionel and Joel did not expressly say they could. The word "licence" is a pleader's attempt to fit their laymen's understanding or language into a lawyer's pigeonhole. Lionel and Joel's language, or the understanding they allowed to develop, was to the effect that Harold and Saul could use the name Squires Loft in running their restaurant. The question is what this amounted to in law. Was it a grant of ownership rights in the name or merely a permission to use the name? As I have already found, it was the latter, and the appropriate designation to confer on it is a licence to Harold and Saul to use the name in the City restaurant for as long as they wished to do so. 108 The applicants also contend that once it is accepted that Lionel and Joel were happy to let Harold and Saul be involved in any future venture, as they said they were, "the language of licence becomes inappropriate in considering the grant of the right to the Applicants to use the name in respect of the City Steakhouse". Why this is so was not explained, and I do not accept it. 109 In the course of coming to my conclusion that there was no agreement such as that alleged by the applicants I have taken into account the background considerations referred to in Part A of the applicants' written submissions. Those considerations, though part of the matrix to which it is proper to have regard, have not enabled me to reach the conclusions the applicants advance, in particular as to what transpired at the crucial 19 June 1997 meeting. My conclusion is essentially based on my assessment of the evidence about that meeting, my acceptance of Lionel's and especially Joel's evidence in preference to that of Harold and Saul, the probabilities of the case, and the confused nature of the central part of the applicants' pleading and evidence. 110 In their amended defence Lionel and Joel plead that the licence granted to Harold and Saul to use the name Squires Loft is terminable at will. In their cross-claim they purport to revoke the licence. The evidence does not establish that the licence is terminable at will. Joel said the agreement reached was that Harold and Saul could use the name for as long as they wanted. At the date of Joel's cross-examination they were still using the name, and were entitled to do so. Lionel's evidence was to the same effect. He had no problem with Harold and Saul using the name Squires Loft in registering SLCS because it had been agreed that they could use the name. Although he did not accept that it had been agreed that Harold and Saul could use the name as long as their restaurant operated, because the parties' discussions did not get into any "definitive terms", he agreed that no time limit was put on the City restaurant's use of the name. As appears from earlier examination of Saul's and Harold's evidence on this point, although at times they asserted more than the grant of permission to use the name, they were not alert to the difference between a right to use the name and having part ownership of it. I accept Joel's evidence, largely supported by Lionel's, that what was agreed was that Harold and Saul could use the name Squires Loft as long as they operated the City restaurant. Since I have decided that the crucial term alleged in par 3(a) and the ensuing terms in so far as they relate to any future licensed or franchised restaurants are not made out, it is strictly unnecessary to determine whether the par 3(f) and (g) terms can be implied. Nevertheless, since the topic was the subject of serious argument, and sub-par (f) was said by the applicants' counsel to be the central plank of their case, I will briefly deal with it. He pointed out that a rigid approach should be avoided in cases, such as the present, where there is no formal contract. In those cases the actual terms of the contract must first be inferred before any question of implication arises. That is to say, it is necessary to arrive at some conclusion as to the actual intention of the parties before considering any presumed or imputed intention. Harold and Saul are entitled to use the name as long as they operate the City restaurant. It is accordingly not necessary for the reasonable or effective operation of the contract that they have ownership rights in the name. For them to have such rights would be inconsistent with the agreement that was in fact made. I note that in the applicants' written submissions the implication of this term is predicated on "the express agreement" of the parties upon the terms pleaded in par 3(a) to (e) of the statement of claim. Of course essential parts of that agreement have not been upheld. 115 It is clear from alleged terms 3(f) and (g) that the latter is dependent on the former. That is to say, it is because the parties are joint owners of the intellectual property that none of them can use the name Squires Loft without the consent of all of them. Even if sub-par (g) were independent of (f), I do not consider that it is to be implied. In determining whether it is necessary for the reasonable or effective operation of the contract to imply such a term, it is appropriate to take into account that the draft licence prepared in June 1997, given by Lionel to Saul for his consideration, contained in clause 3.32, to which Lionel's marginal notes drew Saul's attention, a provision that the licensee was not entitled to prevent the use of the name Squires Loft by any other licensee. Saul expressed no concern about this provision, though another provision in that clause did not accord with the arrangements between the parties and was to be corrected. Further, the whole tenor of Harold and Saul's case is that there would be other licensees or franchisees who would be entitled to use the name. In these circumstances I am not satisfied that it is necessary to imply the term in par 3(g). I note that in their written submissions the applicants did not seek to support the implication of this term. Here it is pleaded that acting in accordance with the terms of the 19 July Agreement various things were done by the parties and others. In view of my finding that no such agreement was made, it would appear to be unnecessary to deal with par 4. However, in closing written submissions the case was put rather differently. It was said that in determining whether the agreement alleged existed and what its terms were, it was appropriate for the Court to have regard to the fact that after June 1997 the parties conducted themselves as if there were an agreement. Such conduct was said to be admissible, not only as to the fact of agreement being reached, but as to the terms of that agreement. In this connection, reliance was placed on various matters, only some of which are contained in par 4. However, as Heydon JA recognised in Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 ; (2001) 53 NSWLR 153 at 179, offer and acceptance are neither necessary nor sufficient to explain every case. While it is an error to assume that because something has been done, there must be a contract pursuant to which it has been done, a contract may nevertheless be inferred from the acts and conduct of the parties: Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117 per McHugh JA (Hope and Mahoney JJA concurring); Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 at 80---83; Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551 at 14,569; (1995) Aust Contract Reps |P90-059 at 90,322. The relevant conduct of the parties must be capable of proving all the essential elements of the alleged contract, so that if the conduct is too ambiguous or vague to establish a contract with legal certainty, no contract will be inferred. 118 It has generally been accepted since the House of Lords decision in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 that while evidence of subsequent conduct is admissible to determine the existence of a contract, it is not admissible to determine the terms of a contract: see D W McLauchlan, "Contract Formation, Contract Interpretation, and Subsequent Conduct" (2006) 25 University of Queensland Law Journal 77. This rule must be understood in its context. Subsequent conduct is not admissible to resolve ambiguities in a contract the existence of which is not disputed. But such a rule would be nonsensical in the case of contracts the existence of which is only ascertained or confirmed by subsequent conduct. In such cases, the subsequent conduct does not resolve ambiguities but rather discloses whether the parties reached agreement and the content of such agreement. Without evidence of subsequent conduct relevant to the terms of the contract, all that could be said is that the parties reached agreement; it could not be said about what. In point of principle I see no reason why that sort of analysis should not apply as much to an aspect or term of a contractual relationship as to the existence of the relationship itself. It is therefore not appropriate to say anything more other than that there are many unresolved questions in this area. There is a world of grey between the two clear extremes of a written contract and a contract "drifted into" by subsequent conduct. This case is not the vehicle in which to determine the extent to which subsequent conduct is relevant to ascertaining the terms of these grey area contracts. 119 A court will not lightly infer a contract from the conduct of the parties. In The Aramis [1989] 1 Lloyd's Rep 213, Bingham LJ said the relevant questions in that case were whether the conduct of each party would be reasonably understood by the other as being either an offer or the acceptance of that offer, on the terms contended for. It must, surely, be necessary to identify conduct referable to the contract contended for or, at the very least, conduct inconsistent with there being no contract made between the parties to the effect contended for. Put another way, I think it must be fatal to the implication of a contract if the parties would or might have acted exactly as they did in the absence of a contract. The City restaurant was not franchised, nor was it licensed in the ordinary use of that word. I refer in this connection to what I have said at [40] to [44]. It was owned by Harold and Saul, through SLCS. I accept Lionel's evidence that he helped with the establishment of the City restaurant in order to assist his father and brother to have a business of their own to run. Joel acquiesced in Lionel spending "South Yarra" time on his relations' project. The production of the sauces in the centralised kitchen, and their use in the two restaurants, the adoption of common menus etc, the joint marketing, the ordering of stationery and ingredients, and the use of staff between the two establishments, is no more than conduct in conformity with what I have found to be the agreement in fact made. See [105]. It is not conduct that in any way points to the parties being equal partners in any venture of opening further steak restaurants under the Squires Loft name through licence or franchise arrangements. Cf par 3(a) of the statement of claim. They were not equal partners, or indeed partners at all, in the City restaurant. There was no suggestion that Harold and Saul had any proprietary interest in the South Yarra restaurant. Although the St Kilda joint venture was prayed in aid by the applicants, there is no doubt that that was a joint venture between the parties and two others. It was not a licence or a franchise arrangement. Item (b) really works against the applicants' present case. The agreement they rely on is said to have been made in June 1997. The fact that four years later (May 2001) the parties are receiving advice about whether to pursue franchising rather confirms that in June 1997 they had not agreed to franchise the Squires Loft concept. Indeed, even in May 2001, two of them (Harold and Saul) were not interested in the concept. In any event, they did not, four years after the crucial meeting, proceed with franchising. Even franchising's chief proponent, Saul, said that the concept was not in his mind in June 1997, and was not an issue until much later, presumably when Mr Williamson and Mr Morgen (April/May 2001) gave their presentations. I have referred at [47] to Lionel's remark at the 25 June 2001 meeting "Let's just say we're talking about are we going to franchise". 123 Reliance on item (d) is disingenuous. After all, the applicants rely on ss 88(1)(b) and 88(2)(c) of the Act to have the Register of Trade Marks rectified so that Saul no longer appears as sole owner of the mark. Section 88(1)(b) empowers the Court to remove or amend an entry "wrongly made" on the Register. Section 88(2) specifies the circumstances in which such an order may be made. One, in par (c), is where the use of the mark is likely to deceive or cause confusion. In their written submissions the applicants contend that the Register should be rectified on the ground that "the registration solely in Saul's name is likely to cause confusion". In any event the item does not in any way point to the alleged agreement having been entered into. The representations are those set out in par 6 of the statement of claim. It follows from the rejection of the applicants' contract case that to the extent that their estoppel case relies on the same foundation, it too must fail. 125 The conduct relied on for the estoppel is that described in pars 3 and 4 of the statement of claim. I have concluded that the parties did not on or about 19 June 1997 enter into an agreement containing the terms set out in par 3(a) to (g). It follows that the conduct of Lionel and Joel that is implicit in par 3 cannot found the estoppel. 126 The only other conduct pleaded is that in par 4, namely the list of acts done in accordance with the agreement. No such agreement was entered into. Nevertheless I will treat sub-pars (a) to (j) of par 4 as if they are independent of the alleged agreement. As there indicated, I am not persuaded that either of them was alert to the difference between a permission to use Lionel and Joel's intellectual property, in particular the name, and a conferring of ownership rights in that property or name. Notwithstanding the stance they have since taken, namely that they became joint owners of the intellectual property, I am satisfied that all they thought they were getting was a right to use the name in the conduct of the City restaurant. The same applies to the other items of intellectual property: the recipes for the sauces for example. 130 Even if I had concluded that Harold and Saul believed they were being given ownership rights in the intellectual property, in particular the name, I would not have upheld the estoppel. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption; (c) has exercised against the other party rights which would exist only if the assumption were correct; (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. In my view they did not play such a part. I do not regard any of the matters listed in [126] as constituting conduct by them that they would have thought would lead Harold and Saul to assume that the parties were joint owners of the intellectual property, in particular the name. In relation to matter (c) in [127], the tenor of the St Kilda joint venture agreement is inconsistent with the Squires Loft name being owned by the parties rather than Squires Loft Pty Ltd. At the time of the conduct in [127] I am satisfied that Lionel and Joel did not know or intend that Harold and Saul would be induced by it or any of it to adopt, and act on the basis of, the assumption that the parties were joint owners of the intellectual property, in particular the name. Nor do I consider that Lionel and Joel clearly ought to have known that they would. 132 The second assumption pleaded by the applicants is not a live issue. Lionel and Joel accept, in my view correctly, that Harold and Saul have the right to operate the City restaurant under the name Squires Loft. Had they not accepted that position, I would have upheld the second assumption, and held that they were not at liberty to depart from it by preventing Harold and Saul from so operating the City restaurant. I will deal later with whether the right has been lost. In their written submissions they rely on 21 additional matters, two of which are partly covered by particulars in par 4 of the statement of claim. I deal with each of the additional matters in turn. 134 Lionel's agreement in cross-examination that he represented to the applicants that they could be involved in any venture involving the Squires Loft name. This overstates Lionel's agreement. What he accepted was that prior to Saul's departure from the business on 6 June 2002 it was agreed that Harold and Saul had the option of being involved in any expansion of the Squires Loft concept. This falls short of a representation that the parties would be joint owners of the name, let alone of all the intellectual property related to the venture of operating, licensing and/or franchising steak restaurants under the name Squires Loft (see pars 1 and 26 of the reply and defence to cross-claim). 135 Lionel gave Saul the sauce recipes in January 1999. In my view this does not amount to a representation that the parties would be joint owners of all the intellectual property related to the venture, including the name. As with the name which Harold and Saul were permitted to use in the City restaurant for the benefit of both that and the South Yarra restaurants, Harold and Saul were to be at liberty to use the recipes, created by Lionel, for the benefit of the two restaurants. 136 Lionel and Saul pursued the prospect of purchasing Marcel Food's Kitchen. I do not regard this as constituting conduct calculated to encourage Harold and Saul to assume that they would be joint owners of the intellectual property. It is to be remembered that the estoppel pleaded is not framed as an alternative way of establishing the par 3 agreement. It is only directed to establishing the assumption that the parties would be joint owners of the intellectual property related to the venture. Many of the matters now relied on, including this one, do not seem relevant to the intellectual property assumption. 137 The parties had regular meetings. Lionel agreed that this was the case in the period 1999 to 2000. Joel agreed that in the period from October 1997 there were numerous meetings between the City and South Yarra representatives concerning the operation of the two restaurants intended to make them run "fairly similar, and to be successful". The matters discussed included staffing, food preparation and having the same salads at each location. In my view this involves no representation or conduct on Lionel or Joel's part calculated to give rise to an assumption that the parties were joint owners of the intellectual property. I refer to what I have said in [136] about the extent of the estoppel. 138 Saul and Mr Marafioti developed manuals for the common operation of the restaurants. Mr Marafioti agreed that these documents were available for use in both stores, but only some of them were in fact used at South Yarra. It is a curious feature of the case that nowhere do the applicants define what items other than the name are covered by the intellectual property they claim in their reply. The overwhelming emphasis is on the Squires Loft name, which the applicants' counsel called "the central plank" of their case. The development of the manuals may suggest that they, or some of them, are jointly owned. However there is no live dispute about their ownership. The parties have simply not crossed swords as to them, and the applicants have not identified them as relevant intellectual property. In any event, whatever the position with the manuals, their development cannot constitute a representation as to intellectual property generally (whatever it may be). Nor does it bear on the ownership of the name, which, unlike the manuals, was not a joint creation. 139 Harold and Joel visited the National Australia Bank and enquired about obtaining finance for, amongst other things, expanding the Squires Loft concept and purchasing Marcel Food's Kitchen. In my view this says nothing as to the ownership of the intellectual property. I refer to what I have said in [136] about the extent of the estoppel. 140 Lionel and Joel never imposed any time limit on Harold and Saul's use of the name. I repeat my finding that Lionel and Joel agreed that Harold and Saul could use the name for as long as they liked in their operation of the City restaurant. There was no agreement to confer on Harold and Saul an ownership interest in the name. 141 Lionel and Saul provided Mr Morgen with the information he later put in his presentation to the parties on 29 May 2001. Why have Harold and Saul at that presentation "if they had no stake in the subject of franchising"? Harold and Saul's presence at the second meeting with Mr Morgen does not point to any conduct on Lionel and Joel's part calculated to cause Harold and Saul to make the assumption relied on. I refer again to what I have said at [136]. 142 Clause 6.5 of the St Kilda joint venture agreement groups together the parties' obligations to provide consultancy services and supply products to the St Kilda restaurant. In my view this does not bear on the assumption as to ownership of the intellectual property. I refer to what I have said at [136]. Again I observe that the tenor of the joint venture agreement is that at that time (late 1998) Squires Loft Pty Ltd was still the owner of the name. 143 After Messrs Friedman and Day left the St Kilda restaurant, the parties ran it as a partnership, marketing it as part of the Squires Loft Group. The tendency of the marketing of the three restaurants was that they were members of a "group", though that word was not always used. In cross-examination Lionel said that St Kilda was run as a partnership. Of course a lawyer would call it a joint venture. Even if it were a true partnership that would not assist the applicants any more than the references to the restaurants as being part of a group. There is nothing about the running of one restaurant in a particular way that affects the running of the other restaurants. In any event, the St Kilda restaurant did not come into operation until a number of years after the alleged agreements sued upon. How language employed in relation to the St Kilda restaurant in 1999 could endow language used two years earlier with a quality it did not then possess was never explained. The reference to "group" would be equally apt to describe a franchise arrangement as a partnership. 144 The parties jointly explored the prospect of franchising in 2001. Joel prepared franchising projections and Lionel prepared a background document. You just can't do it. Harold and myself were totally against it and this [projection] was just pretty much having a look at to see --- to justify why franchising won't work ... with our concept. Based on his figures, his conclusion was "we can't afford it, we can't do it". I accept his evidence. Harold, Joel and he were agreed that franchising was not on. Saul disagreed. It is apparent for the foregoing that after the end of May 2001 three of the parties were not interested in franchising. It is true that Lionel and Joel prepared documents. But Joel's projections led him and Lionel to conclude that franchising was not the way forward. It is to me quite unreal to see in these discussions a representation by Lionel and Joel that franchising was still a live issue when both the so called representors and one of the so called representees were not interested in adopting the concept. The mere fact that Lionel and Joel were discussing franchising with Harold and Saul (though by majority rejecting it), could not reasonably be seen to lay a foundation for an assumption on the part of Harold and Saul that they would acquire ownership interests in the intellectual property. I refer to what I have said at [136]. 145 On 8 May 2001 Saul and Lionel met Mr Williamson and discussed franchising with him. Why involve Saul if "the position of Lionel and Joel [was] that Saul had no relevant interest" in franchising? This meeting was on 8 May 2001, three weeks before the second meeting with Mr Morgen. There is no doubt that Saul was always the chief propounder of franchising as the way forward. Harold was opposed to the concept. At this stage Lionel was still open minded. He had yet to see Joel's projections which would lead him to discard franchising as the expansion model. It may be accepted that Saul had a relevant interest in franchising and in being at the meeting with Mr Williamson. But this does not point to Lionel and Joel having caused him to make the assumption that he had an ownership interest in the intellectual property. In fact the meeting with Mr Williamson involved the parties and not just Lionel and Saul. But nothing turns on that. 146 Lionel's stated reason for holding the meeting on 25 June 2001 was to agree upon a deadlock breaking mechanism. This assumes the existence of an equal partnership. As appears from [48] to [51], the transcript of the meeting does not disclose that the parties were an equal partnership. St Kilda was gone. Harold and Saul had their restaurant and Lionel and Joel theirs. They had joint arrangements as to ways in which the restaurants would work together. They were discussing "going forward". They had no joint enterprise, and the question was whether they would find an appropriate opportunity. Lionel wanted to be sure that if they went forward together in some project, the difficulties they had experienced in St Kilda (and perhaps in their relations in connection with the surviving restaurants) would not continue. Hence the discussion about deadlock. The focus then shifted to Saul's demand for a written agreement. This was not to be a document recording an existing agreement, but one to contain the elements Saul thought were necessary (from his perspective) in an agreement that would govern a future commercial opportunity, if it arose. That was why he was asked to present a draft. Accordingly, the assumption of an existing equal partnership is unfounded. In any event, there is nothing in the transcript that contributes to an assumption as to the joint ownership of the intellectual property. I refer to what I have said at [62] about Saul's perception of his rights to the intellectual property at the 25 June 2001 meeting. There was no representation to the effect of (ii). This discussion was after Lionel and Joel had decided not to proceed with franchising. See the discussion at [144]. Item (iii) is not a representation in either terms or effect. In any event, as I have found, the discussion about Saul presenting a draft was not about a document recording any existing arrangement between the parties, but a proposal as to a future venture in which they might participate if an opportunity presented itself. In any event, it is difficult to discern what these alleged representations have to do with the ownership of the intellectual property. This item in particular seeks to prove too much, namely that the contract claim in par 3 of the statement of claim is made out. 148 Although Lionel knew from 15 April 2003 of Saul's registration of the trade mark, Lionel and Joel took no steps to contest it. This rather overstates their inactivity. When on or about 15 April 2003 Lionel heard from Harold about the registration, he told him that he and Joel would "let it go at this particular point". Harold told Lionel he would seek advice as to what could be done. Lionel said Harold was the one who was in dispute with Saul at that time, and he and Joel were "quite comfortable with not disrupting the balance". Joel learnt from Lionel that Saul had registered the mark. He did not directly raise it with Harold, because Lionel had told him not to worry about it since Harold had spoken to one of the lawyers at Middletons, who was going to investigate the matter and have the registration set aside. Harold said he was "surprised" that Saul had registered the mark in his sole name, because that was contrary to the June 1997 agreement under which the parties all had an interest in the name. There is thus no reason to doubt Lionel's evidence that Harold was going to speak to his solicitors about what could be done to regularise the position. It was suggested by the applicants that it was odd that Middletons should be consulted about this, because it was they who had arranged for Saul's registration. I do not think it at all odd that Harold should consult them. They were his solicitors too, and he had a grievance he wanted sorted out because, as he claimed, he had an interest in the name. Accordingly it is not correct to say that Lionel and Joel took no steps to contest Saul's registration. Harold was concerned about it, and was going to talk to his solicitors, who happened to be Saul's as well, to sort the matter out. 149 Lionel and Joel's alleged failure to take steps to contest the registration is put forward in support of the applicants' claim that they conducted themselves so as to cause Harold and Saul to assume that the parties would be the joint owners of the name. The alleged failure cannot have caused Harold and Saul to make that assumption. The failure to act, if that were established, could only indicate that Lionel and Joel were not troubled by Saul's registration as owner of the mark. It could not be taken as an indication to Harold and Saul that the parties were the joint owners. Of course Lionel and Joel were troubled by Saul's registration, as was Harold. 150 Lionel represented to Harold and Saul that Embers had no right to use the Squires Loft name. Why do that if Harold and Saul had no rights to the name? Lionel accepted that Harold and Saul had the right to use the name. He would have treated Harold's question as a legitimate enquiry: was someone else to be at liberty to use it? In that context his answer cannot be seen as a representation that Harold and Saul had ownership interests in the name. 151 Lionel represented to Harold and Saul that Ms Meyerov had no rights to use the name. Why do that if Harold and Saul had no "rights to the use of the Squires Loft name"? I refer to what I have said at [150]. 152 On the Squires Loft website the City restaurant is advertised as being part of the Squires Loft Group. The website does not use the expression "Squires Loft Group" or the word "Group", though it does indicate an association of some sort between the two restaurants. However this is not conduct by Lionel and Saul that is calculated to cause Harold and Saul to assume that they have ownership rights in the name. ) The bulk of the website is occupied with the Squires Loft menu (with prices) and photographs of the interior and exterior of the City and South Yarra restaurants. If the website contains any representation of the ownership of the restaurants, including their intellectual property, it is that Lionel and Joel are the owners. 153 In December 2004 Lionel asked Saul to research a possible site in Perth with a view to Saul "maybe taking up the opportunity". Lionel said he had been approached by the Centro Property Group who wanted to know whether "we" would be interested in taking space in one of their centres. Lionel asked Saul to speak to a friend of his in Perth to assess whether the site had any merit. The friend reported back that the centre was a good one. Lionel had discussions with Centro, but chose not to pursue the matter. He agreed that he may have said to Saul that the site might be of interest to him. He and Saul did not discuss the use of the name Squires Loft in relation to the site. In my view this does not amount to conduct calculated to cause Harold and Saul to assume that they had ownership interests in the intellectual property. 154 In December 2004 Lionel included Saul in discussions with Steven Webber about opening a steakhouse. Why include Saul if he had "no legitimate interest"? Lionel agreed that he met Mr Webber and an associate, Hugh Kerry, in company with Saul, to discuss the possibility of Mr Webber opening a consultancy store in Melton. I had no contact with these guys. I didn't know them. They were familiar with Saul and they sat and talked about the past for some time before we got down to the nitty gritty. Saul was reluctant to join the meeting. --- He was reluctant to join that meeting but it just evolved that he remained at the table after the introductions were made. In my view this event is not capable of constituting conduct calculated to cause Harold and Saul to assume that they had ownership interests in the intellectual property. 155 There were ongoing discussions between the parties about franchising and expanding the group. Joel repeatedly referred to his willingness to have a look at any proposal for expansion, "yet he never told Harold and Saul that the [ownership assumption] was incorrect". This assumes what it seeks to prove, namely that the assumption of joint ownership is established. 156 The non-pleaded matters, whether taken individually or together, do not support the claim that Lionel and Joel represented to the applicants or conducted themselves so as to encourage them to assume that the parties would be the joint owners of all intellectual property related to the venture of operating, licensing and/or franchising steak restaurants under the name Squires Loft. It is also alleged that Saul's registration is an entry wrongfully made, and/or an entry wrongly remaining, in the Register and is liable to and should be cancelled. 161 The respondents also contend that the applicants have made groundless threats of legal proceedings in respect of trade mark infringement against the respondents' customers. Reference is made to three letters from Middletons threatening trade mark infringement: one of 11 March 2005 to Lionel and Joel, another of the same date to Ms Meyerov, and one to the respondents' solicitors of 4 May 2005. Reference is also made to a phone call Saul is said to have made to Top Cut on 5 May 2005 threatening Mr Robert Rowe with infringement if Top Cut continued to supply meat and sauces to Embers and The Grill Room. 162 In their Defence to Cross-Claim the applicants admit that Saul is the registered proprietor of the mark, but say that he holds his interest on behalf of the parties. Otherwise they deny the allegations set out above. 163 The dispute is thus whether Saul holds his registered interest on behalf of the parties or has no interest in the mark at all, as opposed to a right to use it in the City restaurant. It follows from what I have said at [76], [97] and [105] that the latter is the case. I add that Saul's letter to Joel of 11 October 2004, in which he says he will obtain the forms for the transfer of the trade mark to Lionel and Joel, is inconsistent with Saul and Harold being part owners of the mark. I will direct the Registrar of Trade Marks pursuant to s 88 of the Act to remove the mark from the Register on the grounds in pars (a) and (e) of sub-s (2). The only issue arises under sub-s (4). Paragraph (a) of sub-s (4) requires the trade mark in question to be registered, however it is silent as to whether the registration must be a valid registration or whether an invalid registration will suffice. This issue was considered by the Court of Appeal in Challender v Royle (1887) 4 RPC 363. That case concerned the Patents, Designs, and Trade Marks Act 1883 (UK), s 32 of which has become s 129 of the present Act. At this time the relevant act was the Patents and Designs Act 1907---1919 (UK), s 36 of which had been s 32 of the 1907 Act. The only relevant amendment to that section was that the words "any legal rights of the person making such threats" had been replaced by "the patent". It was argued that Challender v Royle did not apply since the term "patent" encompassed both inventions and alleged inventions. Thus, it was argued, the section applied even if the patent was invalid and so the validity of a patent could not be challenged in a threats case. The Court of Appeal did not accept this argument, holding that amendments otherwise having the effect of broadening the scope of the section should not be read as cutting down a right established by judicial authority, particularly since the amendment was contained only in the schedule to the amending act. Challender v Royle was therefore applied. 168 Section 36 of the 1907---1919 Act became s 124 of the Trade Marks Act 1955 (Cth). Sub-section (1) adopted similar language but with an important addition. However the first edition of D R Shanahan, Australian Trade Mark Law and Practice (1982) at 383 cited Pittevil , and concluded that "it is necessary that the registration be valid and it appears to be open to the plaintiff to plead the invalidity of the registration without actually seeking revocation". The present Act continued, in sub-s (4), the highlighted requirements of s 124 of the 1955 Act cited above. 170 The position established by Challender v Royle , that a defendant in a threat case may argue invalidity of the registration, is supported by sound policy considerations, as the passage from Cotton LJ cited at [166] demonstrates. It seems unlikely that subsequent re-workings of the original legislative provision, which have expanded and clarified the right to bring a proceeding where a threat is made, would have displaced what was said in Challender v Royle without clear words. Both the report of the Attorney-General's committee into the 1955 Act ("Report of the Committee Appointed by the Attorney-General of the Commonwealth to Consider what Alterations are Desirable in the Trade Marks Law of the Commonwealth (1954)" and the Explanatory Memorandum for the current Act are silent on the question. On their face, the meaning of the words in s 129(4)(a) - "the trade mark is registered" - is clear. However, when the history of the threat provision is examined, there is no basis for saying that any version of the trade mark legislation has changed the position set out in Challender v Royle and Pittevil . Further, the words in the emphasis in [168] --- "the acts ... constitute ... an infringement of the trade mark" --- seem to pick up the concept in the passage from Cotton LJ's reasons set out at [166]. In those circumstances the words should be understood as meaning "the trade mark is validly registered". It follows that the applicants have failed to make out par (a) of sub-s (4), since the trade mark is invalid. 171 The applicants also fail to make out par (b) of sub-s (4). This paragraph requires them to satisfy the Court that the acts of the respondents which were the subject of the letter from Middletons to Lionel and Joel on 11 March 2005 constituted an infringement of the trade mark. No attempt was made by the applicants to so satisfy the Court, and in light of my findings, I would in any event not have been so satisfied. 172 There will be a declaration that the applicants have no grounds for making the unjustified threats set out in par 26 of the cross-claim, and an injunction restraining them from continuing to make those or similar threats. The respondents' counsel informed the Court that no evidence of damage would be called in connection with the claim to unjustified threats. They say that the breakdown began with the applicants' solicitors' letter to Lionel and Joel of 11 March 2005, the substance of which is set out at [39(pp)], and continued with the initiation of the proceeding. There is no doubt that the relationship has broken down. 174 In this connection the respondents rely on J H Coles Pty Ltd v Need [1933] HCA 48 ; (1933) 49 CLR 499. There the appellant (Coles) and Need entered into an agreement that Need would open a shop and conduct a business therefrom under Coles' trade name, the business being similar to that conducted by Coles. Need was to buy all his stock from Coles at a concession price. No time was fixed for the duration of the agreement. Coles' name was affixed to the shop front. Initially Need purchased all his stock from Coles, but after a while Coles was unable to supply the whole of Need's requirements, and he obtained some of his stock elsewhere. After about three years, his purchases from Coles were negligible. Coles was then in voluntary liquidation. Its liquidator required Need to remove the Coles trade name from his shop, and on his refusal, brought an action to restrain him from continuing to use the name. 175 Irvine CJ granted the injunction. His Honour found that Coles had granted Need a licence to use its name, that no period had been fixed for the grant, that the licence had been duly determined by notice, the implied term of the licence being that it should last as long as the buying and selling on the terms and prices arranged should go on, and that these matters having ceased, Coles was entitled to revoke the licence. 176 The Full Court upheld the Chief Justice's decision. Before the Full Court Need contended that he had acquired by assignment of Coles' goodwill a right to use its trade name permanently or indefinitely. This is the Court rejected, confirming the Chief Justice's conclusion that Need had no more than a licence to use the name, which had been revoked. 177 The High Court, by majority, allowed Need's appeal: Need v J H Coles Pty Ltd [1931] HCA 55 ; (1931) 46 CLR 470. The Privy Council allowed Coles' appeal. The Board agreed with the reasoning of the Chief Justice, the Full Court and the dissenting judges in the High Court, Starke and Dixon JJ. From these conclusions it follows that prima facie the appellant is entitled on well-recognized principles to an order restraining the respondent from the unauthorized use of the appellant's trade names after the licence was revoked, since the continuance thereafter of such user necessarily involves a passing off by the respondent of his business as being a business for the sale of the appellant's goods and as being a business in which the appellant has at least an interest, and in this way there would be practised a deception of the public to the prejudice of the appellant's business reputation and goodwill. 179 In the Supreme Court Irvine CJ and two members of the Full Court (Macfarlan and Mann JJ) thought the licence revocable at will, and that no question of reasonable notice arose. In the High Court Starke J was of the same view. The other members of the High Court did not consider the question. I think that, if the agreement had not already ended, it terminated when the winding-up commenced. The arrangement made between the appellant and the Company created a business relation in which the advantages reciprocally enjoyed and conferred depended on each continuing to carry on his or her trade. The shopkeeper for his profit sold with the help of the Company's trade names and methods the goods with which the Company supplied him. The remuneration of the Company for the use of its names and for whatever other service it gave was obtained from the profitable supply of the goods which the shopkeeper sold. Such an arrangement could not survive the termination of the business existence of either party. I do not think that a contractual intention should be imputed to the Company and the appellant to confer upon the appellant a right to the use of the trade names on the termination of the agreement. The parties did not, I think, consider what was to happen if the agreement was brought to an end, and the Company at least meant to do no more than allow its name to be used so long as the shop was a means of selling its goods. Harold and Saul were at liberty to use the Squires Loft name in the City restaurant as long as they wanted to. 180 In my view Coles is distinguishable. It concerned an arms length commercial arrangement. The passage from Dixon J's judgment set out at [179] makes clear why it was that no intention should be imputed to the parties that Need should be at liberty to use Coles' name after the agreement had come to an end. In particular, it could not reasonably be thought that Coles intended that its name would be used by Need when its goods were no longer being sold at his shop. 181 The present case is different. Lionel wanted to assist his father and brother establish a business. He spent a lot of time on the project. He took the lease and licence in his own name to facilitate the matter. He assisted with the opening of the City restaurant, and attended to the grill for some time after the opening. Joel went along with this, because he respected Lionel's concern to help Harold and Saul. He said he agreed to Lionel taking time away from the South Yarra restaurant because he was helping members of his family. 182 The clear intention of Lionel and Joel in mid-1997 was that Harold and Saul were to have their own restaurant. Although their agreement that Harold and Saul could use the name Squires Loft in the City restaurant has, for the purpose of distinguishing between a mere permission to use it and a grant of ownership rights, been dubbed a licence, the discussions between the parties were at a quite informal level. No more than "You can use the Squires Loft name". As in Coles , the parties are unlikely to have considered what was to happen if they fell out. But whereas the appropriate intention to impute to the parties in Coles was that Need's liberty to use the Coles name would come to an end when Coles ceased to derive any advantage from Need's shop, the appropriate intention to impute to the parties here is that Harold and Saul were to be at liberty to use the name in the City restaurant as long as they wanted to; that is to say, the use was not conditional on a continuation of the business relationship between the two restaurants. Lionel and Joel had ample opportunity in the course of their cross-examination to say that Harold and Saul's use of the name was in some way qualified or conditional, but both were happy to leave it that Harold and Saul could use the name as long as they wanted to. Although the respondents overstate the position by submitting that Lionel and Joel accepted that Harold and Saul could use the name for as long as they wanted "without any conditions being imposed upon its use by them", that is in my view the proper inference to draw from what they actually said, namely that Harold and Saul could use the name for as long as they wanted to. 183 It is to be remembered that Squires Loft was part of SLCS's name. It is, I think, an unlikely intention to impute to the parties that Harold and Saul would have to change their company's name if the parties fell out. In my view it is not realistic to distinguish between the name as it appears in SLCS and as it is used in the business operated by SLCS. 184 I note in passing that Joel did not consider that Harold and Saul's right to use the name had terminated once the parties' business relationship broke down. See [110]. --- I believe, yes. We ... let them use the name for as long as they wanted, yes. That they can use that name pursuant to that agreement? --- They are still using the name today. --- Yes. Their version is described at [106]. The breach relied on is their failure any longer to adopt common menus etc or promote and market the South Yarra restaurant. 186 As appears from [105] and [106], Lionel and Joel's defence that they granted Harold and Saul a licence to use the name Squires Loft in the City restaurant upon the terms referred to has been upheld. However the respondents claim that the City restaurant no longer adopts common menus etc and does not promote and market the South Yarra restaurant. They say that the applicants have thereby evinced an intention not to be bound by the terms of the licence and have thereby repudiated it, which repudiation they accept. Each party's obligation is conditional on performance by the other; neither can complain of non-performance by the other when the condition governing the other's obligation goes unfulfilled. But if one party intimates to the other that it is useless for the other to fulfil his obligation and the other acts on the intimation, the party to whom the intimation is given is dispensed from a nugatory tender of performance. The prima facie obligation on the applicants to perform their part was thus dispensed with. Accordingly the applicants have not by their conduct evinced an intention not to be bound by the licence. It was not open to the respondents to treat them as if they had, and thereby bring it to an end. The steps taken by the applicants, namely obtaining their own sauces and stationery, were forced on them by the respondents. 190 The respondents seek to avoid this result by contending that it was the appellants' solicitors' letter of demand of 11 March 2005 asserting that Lionel and Joel had infringed Saul's trade mark that constituted a repudiation of the agreement by Harold and Saul. It was said that the appellants "forced the issue" and brought about the disintegration of the relationship between the parties and not the other way around. 191 The question is whether the 11 March 2005 letter, summarised at [39(pp)], evinces an intention on Harold and Saul's part no longer to be bound by the agreement or to fulfil the agreement only in a manner substantially inconsistent with their obligations and not in any other way: Shevill v Builders Licensing Board [1982] HCA 47 ; (1982) 149 CLR 620 at 625-627 and Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14 ; (1985) 157 CLR 17 at 33. The letter was not about any agreement between the parties, whether that asserted by the applicants or the more limited agreement that Harold and Saul could use the Squires Loft name. It was a complaint that Lionel and Joel had engaged in conduct that infringed Saul's trade mark. It demanded that they refrain from dealing with or seeking to licence the mark in relation to the provision by a third party of restaurant or catering services without their consent. It may have been a bold letter written on the dubious basis of Saul's registration of the mark. But it was not a repudiation or renunciation of whatever agreement existed between the parties. 192 The letter was of course written by solicitors purporting to act for Saul and SLCS. Those solicitors would shortly contend, on behalf of Harold and Saul, that there was an agreement in the terms pleaded in par 3 of the statement of claim. No such agreement existed. All that existed was an agreement that Harold and Saul could use the name Squires Loft in SLCS's name and in the operation of the City restaurant, on terms relating to co-operation between that and the South Yarra restaurant. The letter did not impugn that limited agreement. Indeed it sought to protect it from competition from third parties' use of the name. 193 In my view it was the respondents' solicitors' letter of 31 March 2005 and the ensuing conduct set out at [188] that constituted the breach and activated the principle in Foran v Wight . 194 As at November 2006 Joel did not think that Harold and Saul's right to use the name had terminated as a result of his and Lionel's acceptance of their repudiation of the licence. I refer in this connection to what I have said at [184]. They also dealt fully with the registration of the name, and what should be done to correct the erroneous impression created by Saul's appearance as its proprietor. Apart from the name, the applicants did not identify the components of "all intellectual property related to the venture". This is doubtless to be explained by the fact that the respondents' case was that they had granted the applicants a licence to use in the City restaurant the name and "the get-up and methodology used by the Respondents in running a restaurant in South Yarra under the name 'Squires Loft'": par 3(b) of the defence. Of course the applicants claimed that the agreement was that the parties would jointly own all intellectual property related to the venture, including the name. However, their fall back position, in the defence to cross-claim, was that if Lionel and Joel had granted them the licence alleged in par 3(b) of the defence, it was for the life of the City restaurant business established pursuant to the licence. 196 Whatever the nature and term of the licence, because of the respondents' claim and the applicants' fall back position, the subject matter of the licence was common ground --- the name and the get-up and methodology used in the running of the South Yarra restaurant. All the items I can envisage as falling within that description will also fall within the description in par 3(f) of the statement of claim, modified for the purposes of the fall back position so as to refer not to the par 3 venture ("any venture of opening further steak restaurants under the Squires Loft name") but to the venture in par 3(b) of the defence. I will grant that declaration, but otherwise dismiss the application. 198 On the cross-claim I will order that the Registrar remove Australian Registered Trade Mark No 918180 from the Register. The respondents are entitled to a declaration that the applicants have no grounds for making the threats set out in par 26 of the defence and cross-claim, and an injunction restraining the applicants from continuing to make such threats or any similar threats. Otherwise the cross-claim should be dismissed. 199 On an important part of their claim, namely their right to use the name Squires Loft, the applicants have had partial success. Their principal claim, that there was an agreement as alleged, and the related non-contractual causes of action, have failed. The respondents have succeeded in establishing that all they had granted the applicants was a licence to use the name Squires Loft. The respondents have succeeded in their trade mark claims but have failed in their breach of licence contentions. In these circumstances the respondents are entitled to three-quarters of their costs of the claim. The respondents should pay one half of the applicants' costs of the cross-claim. I certify that the preceding one hundred and ninety-nine (199) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | agreement that applicants could operate restaurant using respondents' intellectual property whether agreement gave property rights or mere licence relevance of subsequent conduct to existence of agreement whether licence terminable at will whether licence repudiated trade marks act 1995 registration in name of one applicant only whether applicants entitled to registration together with respondents unjustified threats contract trademarks |
An appeal lies to this Court on a question of law, from any decision of the Tribunal: s 44(1) Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act"). The respondent was medically assessed and declared unfit for sea duties. The respondent received worker's compensation until 24 September 1991 when he returned to work. The respondent's right knee continued to deteriorate and on 9 June 1994 he was certified as unfit for further sea duties. On 10 June 1994 the respondent submitted a claim for worker's compensation to the applicant and he has been in receipt of ongoing compensation payments with effect from that date. On 27 February 2006, the respondent's treating orthopaedic surgeon, Dr Graham Forward stated that the respondent had a limited disability for heavy physical work but would be able to carry out a wide range of clerical duties and would be fit for light duties such as storeman or sedentary attendant. The respondent's Progress Medical Certificate of 20 April 2006 stated that a vocational rehabilitation assessment was required. Such certificates had been issued in the past from 1991, but the respondent had not, between then and 2006, been requested by the applicant to attend a vocational assessment. On 20 April 2006 the applicant requested the respondent to advise whether he was available to attend a vocational assessment. The respondent responded on 24 April 2006 to the effect that whilst he found it intriguing that in 15 years when some twenty medical certificates suggesting vocational assessment had never been actioned, nonetheless, provided the applicant agreed to pay all costs, he would attend such an assessment. On 28 April 2006, the applicant's solicitors informed the respondent that it had arranged for the respondent to attend at Herdsman for a vocational assessment. There was then disagreement between the applicant and the respondent as to where his vocational assessment should be carried out. The respondent did not accept the applicant's choice of service provider, Mount Injury Management Service, he preferring the rehabilitation program to be conducted by the Commonwealth Rehabilitation Service at Fremantle believing that they had a greater knowledge of employment opportunities in the Fremantle area. Nonetheless, the respondent did attend on Mount Injury Management Service on 9 May 2006 to discuss his medical and vocational situation, where he was interviewed by Ms Elaine Duncan, an Injury Management Consultant. He has sought alternative employment positions to no avail. His physical capacity has been significantly reduced as a result of his injury. Although he agrees he could undertake some form of work, he believes the odds are stacked against him as a result of his age and his lack of adequate training in other work areas. His medical practitioners are agreeable to an investigation into suitable work alternatives. Upon consolidation of suitable alternative work options, medical opinion to be obtained regarding the viability of options generated. Once a vocational direction has been consolidated, and dependent upon medical approval, Mr Lawson to be offered assistance in undertaking a period of training/work experience in order to commence vocational redirection. The respondent's solicitors then requested the applicant to advise as to his available dates in the coming weeks, for the scheduling of two further vocational assessment meetings with Mount Injury Management. The applicant replied by facsimile dated 6 July 2006 stating that he was willing to attend with the understanding that it was for an assessment only and a decision was yet to be made as to the approved program provider. The report refers to the respondent having experienced stress and anxiety, which he believes to have been brought about by the ongoing adversarial nature of his workers compensation claim. However the report did not contain any reference to him suffering from any psychiatric condition or mental injury, or that he had claimed to suffer from any such conditions. By letter dated 4 July 2006 the respondent wrote to Elaine Duncan at Mount Injury Management stating that because of Stateships new initiative he had been placed under more than usual stress and his doctor had referred him for psychiatric assessment, which was to take place the next day. On 12 July 2006 the respondent lodged a claim under the Act, the subject of the proceedings before the Tribunal and this appeal. In answer to the question in the claim form, as to the nature of his claim, the respondent ticked the boxes "medical and related expenses" and "household and attendant care services". He described the nature of his injury or illness as "stress" and the part of his body as "mental". In answer to the question as to when he was first injured or noticed that he was ill, the respondent wrote "1995" but on 3 October 2006 wrote to the appellant changing the date from 1995 to April 2006. This whole process has put me under a lot of stress causing me to drink alcohol heavily and has threatened my ability to cope with every day life. Over the years I have received counselling from a psychologist but this latest initiative of Stateships has caused me to seek and receive psychiatric help from Dr Wu of WEIT Perth because I became frightened of the consequences of my state of mind. He was an active participant in the process and completed the administered questionnaires promptly. Mr Lawson expressed that he felt highly anxious regarding participating in vocational rehabilitation following such a long period since his injury. On 5 September 2007 she wrote in reply to a letter from Cocks Macnish, the applicant's solicitors, concerning the respondent. Its contents are set out in full at [33] of the reasons of the AAT. There are no other factors impacting on Mr Lawson's present psychological condition beside his worker's compensation process. Mr Lawson receives counselling with a clinical psychologist and is on an antidepressant medication (lexapro). The medication was commenced shortly after he was urgently referred to a psychiatrist in June 2006. Mr Lawson is aware that he can receive urgent outpatient or inpatient psychiatric care at any time if his depression and hopelessness deepens. He is also aware that more counselling of a CBT nature is accessible should he need it and that medications can be increased. He is aware of all his risk factors for an increase in his symptoms. He is currently not requiring that extra care. . . . 6. ... He is made totally incapable of working by the nature of his depressive illness. If he were no longer required to work it would reduce his immediate stressors and background risk of suicide, it would not however resolve his mental health issues. Mr Lawson has seen a private psychiatrist once at my urging after I became fearful and aware of his suicide potential. He had been seeing a clinical psychologist Emilie Cattalini for some 12 years of his own volition and unbeknownst to myself, to cope with his distress regarding the legal battles concerning his injury claims. She wrote to me in mid June 2006, with Barry's knowledge after his mental health nosedived. This was at the time he was told he was going to be rehabilitated to be made work ready. ... He saw Dr Raymond Wu in July 2006 once and continued counselling. Dr Wu offered him management options to call on if he needed them and assessed him at the time as not actively suicidal. He has follow-up available as needed. He opted to continue with his trusted counsellor and accepted a need for antidepressants. We commenced him on an antidepressant and monitored him closely to observe a gradual settling of his suicide potential. He remains very vulnerable. . . . 9. This gentleman has a long history of psychological assistance to help him cope with his protracted worker's compensation case. He has never sought to claim this or publically acknowledge this until pushed to the brink of claiming his own life to deal with his anger and despair at a system that spent 10 years offering him no rehabilitation and then forcing him to it this year, whilst indicating his age made him unemployable (as he is now within three years of retirement age). This seems from Mr Lawson's point of view to show a malicious disregard for his well-being. By facsimile dated 12 October 2006 the respondent advised the applicant that its insurers had "approved the use of Mount Injury Management as a programme provider". By facsimile dated 12 October 2006 to the respondent, the applicant noted that: he had not been consulted in relation to the selection of an approved program provider, as required by the Act; Mount Injury Management Services was not included in the list of Western Australian Approved Rehabilitation Providers published by Comcare. By facsimile dated 27 October 2006 the respondent's solicitors informed the applicant that it had, as requested by him, made arrangements to transfer his vocational rehabilitation from Mount Injury Management to a Seafarers Approved Rehabilitation Provider, namely CRS Australia Fremantle. In a subsequent facsimile dated 30 October 2006 the respondent's solicitors informed the applicant that Mount Injury Management was in the process of becoming an Approved Rehabilitation Provider for seafarers but that nonetheless, in an effort to accommodate his request, the matter had been transferred to CRS Australia. In December 2007 the applicant, by facsimile letter, advised the respondent that it would not progress efforts aimed at assisting him to return to work. This, in large part, it would appear was as a result of a letter to CRS from Dr Knight which included the statement that "Mr Lawson has been suffering both anxiety and depression, has undergone a psychiatric review and had been placed on Lexapro to assist with the management of his symptoms". Since then the respondent has not been subject to any further vocational rehabilitation programmes with a view to his entering the workforce. Dr Knight provided a further report addressed "to whom it may concern" dated 3 December 2007 which is set out at [34] of the reasons of the AAT. He was no longer attending the gym. He was no longer doing voluntary community work. He was deeply distressed, depressed, angry and unable to handle any company. He was very afraid of his own potential to self-harm and harm others. He was urgently reviewed by psychiatrist Dr Wu, and commenced on an antidepressant, for major depression with high suicide risk . He is no longer suicidal. He has been exercising at home with a physiotherapist friend mentoring him. He is still incapable of interacting in a normal capacity in the community. There is no medical evidence before the Tribunal which is inconsistent with either of those alternative propositions. Accordingly, the Tribunal finds, on the basis of the medical evidence before it, that the applicant suffers from a mental ailment and has been so suffering since at least June 2006. As regards the nature and character of the mental ailment suffered by the applicant, the Tribunal finds, on the basis of the evidence of Dr Knight, that in or about June 2006 the applicant's existing mental condition substantially deteriorated to the extent that he then contracted a psychiatric disorder. It is not necessary for the Tribunal to make a finding as to the precise diagnosis of that psychiatric disorder but the Tribunal is satisfied, on the basis of Dr Knight's evidence (which included a reference to a provisional diagnosis of adjustment disorder with anxious/depressed mood made by Dr Wu, Psychiatrist, on 5 July 2006 and his suggesting anti-depressant medication for the applicant), that the applicant's ongoing psychiatric disorder, which he contracted in or about June 2006, involves depression. In short the Tribunal was satisfied that the respondent suffered a "substantial deterioration in his mental health in or about June 2006 which ... involved the contraction of a psychiatric disorder involving depression": at [46] The applicant submits that not only is there no evidence to support this but that the relevant evidence contradicts such a conclusion. Dr Wu saw the respondent on 26 June 2006 and prepared a report dated 5 July 2006. Dr Knight said that one of the main focuses of sending the respondent to Dr Wu was to assess the respondent's likely suicide potential. She did not state what, if any, were the other reasons. Dr Wu's report was not provided by Dr Knight to the Tribunal although she had it with her whilst giving evidence. The Tribunal did not require that it be produced because it did not want her to feel "uncomfortable" about doing so. The appellant's solicitors requested a copy of Dr Wu's report from the respondent however the respondent was unable to obtain a copy from Dr Knight and for that reason did not provide a copy to the applicant. Let's say it would be shortly after --- ?---Yes, there was only the one visit that I'm aware of at that stage and as a result of that visit Mr Lawson started on some anti-depressant medication. Is it a very lengthy report?---A four page report. Are you able to tell us what Dr Wu concluded, regarding say a diagnosis of Mr Lawson's mental condition?---Yes, his main problem was that he stated he's not able to make a definitive diagnosis at that stage because there had only been the one visit so he definitely felt that Mr Lawson had been suffering from an - well he stated just from the one-off visit an adjustment disorder with anxious depressed mood was the diagnosis that was made but he also documented in the letter that a one-off visit was not enough really for him to make a conclusive diagnosis. I've obviously sent him along because I was concerned about his risk of suicide so I - one of the main focuses of the visit with Dr Wu was to assess how likely he felt that suicide potential was. Is there anything else in Dr Wu's report that you think is worthy of mention or not? For example, anything there that you have particularly followed upon yourself in your treatment of Mr Lawson apart from I suppose the prescribing of Lexapro?---It was I guess a number of things more trying to provide an environment of calm for Mr Lawson because we had a very angry and potentially suicidal man, very distressed and it was trying --- my follow up afterwards was trying to create an environment in which he could be in this state. The applicant was "insightful". The applicant was not actually suicidal but there was some unspecified "risk". Dr Wu, according to Dr Knight "suggested" that the respondent commence on medication known as Lexapro. He did not however prescribe it. It was Dr Knight who did so. There was no evidence as to the basis for this prescription or the period in respect of which it was prescribed. In any event, it is by no means clear in the evidence that it is prescribed only for depression. It seems likely that this is not the case as Dr Wu was unable to conclusively diagnose that the respondent was suffering from depression. I cannot think that in those circumstances he would suggest a drug if it were apt only for the treatment of depression. The respondent, as Dr Knight stated in evidence, declined further follow-up with Dr Wu. In contrast to the statements attributed to Dr Wu, Dr Knight's report prepared on 3 December 2007 had stated that "He was urgently reviewed by psychiatrist Dr Wu, and commenced on an anti-depressant for major depression with high suicide risk". This advice, whether intended or not, wrongly conveyed the impression that the respondent had been diagnosed by a specialist psychiatrist, Dr Wu, as suffering from major depression attended by a high suicide risk. The medication was commenced shortly after he was urgently referred to a psychiatrist in June 2006. Dr Wu, in fact, had done no such thing. Dr Knight was cross-examined as to her evidence concerning depression. As I understand it, you really took - you looked at - or gave a general view of Mr Lawson but it wasn't the same sort of test that say a psychiatrist or a psychologist would do. You didn't perform those sorts of tests?--- No, I didn't do anything in depth like that, that's something that takes a process of considerable time which is not available to me in general practice. I have to do things in short bites. Doctor, as a vocationally registered GP aren't you --- isn't it a part of your training that you're trained to diagnose, not so much diagnose, at least to realise that somebody that comes to you in your practice could be depressed to use a technique of interrogating them such that you get to the root of that if you suspect it, isn't that a part of your training and aren't you doing that consciously in many other cases apart from cases like this?---Yes. I am a person who spends some time with people so yes, that's something that I don't sit and tick the boxes and dot the Is but have developed knowledge over the years and hence my concern and hence my rapid referral. That was, in the case of the respondent, precisely what Dr Knight did. Emilie Cattalini, a registered psychologist gave evidence. She practised at the Mary MacKillop Centre. The respondent had done voluntary work there for her over a period of about two years around 2000-2003. She had in the past provided counselling to the respondent. He was reclusive, short-tempered, and his personal care and family relationships had deteriorated. Recognising the signs he seeks help immediately. Help was rightfully available for six weeks after surgery but authorization for the help was delayed beyond six weeks by which time his right to the help had expired. This occurred even though the request for help had been granted in court. They are, consequently, stress producing for Mr Lawson. Mr Lawson has undoubtedly sustained extreme mental pressure, exacerbated by delays and inconsistencies. You know, sort of around probably about two years ago, you know, like he was proceeding very well, and then there was a deterioration about two years ago. Sister Cattalini said that the applicant's present mental state is better than it was in 1996 when he first sought counselling. She said that, prior to 2006, his mental state fluctuated but that in 2006 it deteriorated almost to the 1996 level. So he was better able to handle it because he had the techniques and the tools to handle it. But it was --- he did --- well, he went back into thoughts of suicide, he went back into reclusiveness, he went back into personal health deterioration, personal appearance deterioration, so all those indicators were there again. This deterioration wasn't as prolonged as it had been in 1996. Her role (as at the date of the hearing before the AAT) in the respondent's mental health care was, by reason of the respondent's proficiency in stress management techniques only as a "Mentor" rather than a "Counsellor". In the circumstances where there is positive evidence that Dr Wu did not diagnose depression in the case of the respondent the hearsay evidence of Ms Cattalini that Dr Wu prescribed medication for depression carries no weight. In my opinion, the finding by the Tribunal that the respondent contracted a psychiatric disorder involving depression in or about June 2006 and which continued to the date of the hearing in May 2008 was not founded on probative evidence. Indeed it was contrary to the evidence which was probative. The evidence of Dr Knight concerning the question whether the respondent suffered depression or any injury involving depression was, with due respect to her, overstated and her reports misstated the involvement and diagnosis of Dr Wu. Her evidence in this respect was at odds with what Dr Wu had stated even on her account. It was not probative of the existence of a psychiatric disorder involving depression either as at or about June 2006 or since then. Dr Wu, a specialist psychiatrist was not prepared to conclude that the respondent was depressed. He positively concluded that the respondent was not actually suicidal. It is regrettable that the Tribunal did not insist on Dr Wu's report being produced by Dr Knight. Any confidentiality could only have been for the benefit of the respondent who, in any event, was plainly relying upon its contents. Ms Cattalini, a psychologist, was prepared to say no more than that the respondent's mental health suffered a severe deterioration in 2006 but only for some unspecified period when it seems it resolved. Finally the respondent did not, in his application under the Act, say that he was depressed. At its highest he said that the events concerning the vocational reassessment in about June 2006 had caused him a lot of stress and threatened his ability to cope with daily life. He did not tell Ms Kordanovski, the psychologist, that he was depressed but said that he felt highly anxious about participating in vocational rehabilitation as at 2006. The question whether there is any evidence of a particular fact is a question of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 355; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 , 38 AAR 55 at [29] ; Wecker v Secretary, Department of Education Science and Training [2008] FCAFC 108 , (2008) 249 ALR 762 at [99] . The fact that the Tribunal is not bound by the rules of evidence does not free the Tribunal to make a decision upon evidence which lacks rational probative force: Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33 at 41 per Brennan J; Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 4 ALD 139 at 155-6; Collector of Customs (Tas) v Flinders Island Community Association [1985] FCA 232 ; (1985) 8 ALN N102 ; Rodriguez v Telstra Corp Ltd [2002] FCA 30 ; (2002) 66 ALD 579 at [25] ; Wecker at [96]. In my opinion there was no probative evidence that the respondent contracted a psychiatric disorder involving depression. There is however evidence that is probative, emanating from Ms Cattalini, that the respondent, for an unspecified period in or about 1996 and again in 2006 suffered severe deterioration in his mental health as a result of stress. Whether or not those episodes constituted relevantly an "injury" under the Act, I cannot say. This ought be considered by the Tribunal. Pursuant to ss 44(4) and (5) of the AAT Act and s 28 of the Federal Court of Australia Act 1976 (Cth) the Court has power to remit the case for re-hearing by the Tribunal, which may be confined or at large: Repatriation Commission v Nation (1995) 57 FCR 25. I consider that the matter as a whole ought be remitted to the Tribunal differently constituted for determination according to law. It is unnecessary, given this conclusion, to consider the other questions of law raised in the application. The application will accordingly be allowed. I will hear the parties on the question of 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 Gilmour. | appeal from the administrative appeals tribunal whether there was evidence before the tribunal to support a finding that the respondent suffered a psychiatric disorder no probative evidence appeal allowed. administrative law |
2 The appellant, a citizen of the Philippines, arrived in Australia on 21 April 2005 and lodged an application for a protection visa on 18 May 2005 of that year. He claimed to have a well-founded fear of persecution in the Philippines by reason of his being a homosexual Muslim male in the Philippines. His application was refused by the Minister on 16 August 2005. The Tribunal affirmed that decision on 6 December 2005. 3 The appellant outlined the basis for his claim to protection in writing on three occasions prior to the hearing before the Tribunal. His fundamental claim was that as a male Muslim homosexual he would be in an impossible position if he returned to the Philippines. Two words that can not or must not or shall not or will not go together. Gay is a taboo in muslim society. 4 He claimed to maintain his Muslim faith. He came from a large and powerful Muslim family from Mindanao and was a member of a particular tribe that adhered to the Muslim faith. His family was active in politics and he described his father as having been a warlord. He was the only homosexual in his family and was ostracised by his siblings for this reason. The situation was aggravated by the existence of Muslim radicals and terrorists, in particular the Moro Islamic Liberation Front (MILF). He claimed to suffer emotional and mental anguish. He referred to threats he had received after he refused to join the MILF. He feared connivance between his family and the MILF. He referred to an occasion in 2005 when three Muslim men with faces covered by handkerchiefs cut his long hair with scissors and threatened that next time they would cut his belly. 5 His evidence to the Tribunal fleshed out his position. He said that in the 2005 incident the men said that if he kept on "doing this" they would cut his belly --- he took them to mean being a homosexual. He did not report the incident to the police because they would "laugh, because I'm gay". His homosexual friends were all Christians. He did not reveal to people that he was from the [named] family or was Muslim, so that they would not tell his family anything about him. 6 He had lived for about a year in Manila around 2000. • His family teased, mocked and gave him "constant annoyance" (continuous). • His brother made him cut his long hair by threatening to cut off his allowance (1996). • His family tried to force him to marry a woman and when he refused they cut off his allowance (1998). • The MILF invited him to join them and threatened him when he refused leading to him resigning from his job and losing his college accommodation (1998). • While walking home he was stopped by three Muslim men whose faces were covered by handkerchiefs. They cut off his pony tails and said that if he kept on "doing this", by which he understood them to mean "being gay", they would "cut [his] belly" (2005). 8 The Tribunal was not satisfied that the family's treatment of the appellant amounted to persecution. As the appellant had had no further problems with the members of the MILF since 1998 (more than six years before claiming asylum), the Tribunal was satisfied that they had "lost interest in him". The Tribunal found that the 2005 assault was an isolated event and it was unable to establish whether it occurred for a Convention reason. It also found, based on independent information about homosexuals in the Philippines, that the appellant could reasonably be expected to relocate within the Philippines. For these reasons, the Tribunal found that the appellant did not have a well-founded fear of Convention-related persecution. The Tribunal is satisfied that the MILF lost interest of me because they don't cause me problems some six years ago. And the tribunal further mentioned that the fact that I had no further contact with those three men who cut my hair during my final three months in the town suggests that it was an isolated event which will not be repeated even if I return to my town. 2. The tribunal accepted I do not have a good relationship with my brothers. But the tribunal is not satisfied I suffered any serious harm as a result. 3. The Tribunal accepted that I am a homosexual, but the tribunal never further mentioned or accepted in the findings and reasons (page 11) that homosexuals are a taboo in a muslim society. Raphael FM found that there was no error of law or jurisdictional error in the Tribunal's decision as to the claimed persecution and pointed out that, in any event, the Tribunal's finding on relocation was an answer to the appellant's case. The Honorable Court did not consider that the Refugee Review tribunal wrongly did not accept my claim for protection as homosexual and the Tribunal also wrongly decided that my claim for homosexual is not convention related. But the Tribunal did not consider that my hair was cut by the group because of my homosexuality. 2. The Honorable Court did not consider that the Tribunal did not comply with the Migration Act 1958 when it made its observation regarding relocation for me as a homosexual person because the applicant did not get any opportunity to explain regarding this issue. 3. The Honorable Court also did not consider that the Tribunal did not assessed my claim for protection properly. The written submission of the appellant is, in effect, a restatement of the appellant's case and does not descend to particularity. The finding by the Tribunal as to the incident in 2005 was a finding of fact open to it on the material before it. Homosexuality was only one possible explanation for the episode. However, this point is subject to the issue discussed under ground 3. 13 The second ground does not appear to have been raised by the appellant in the Federal Magistrates Court. The appellant's written submission also seeks to raise a related new s 424A point. Each argument depends upon the conduct of the matter before the Tribunal. Those arguments involve factual matters not appropriate to be raised on appeal to this Court. However, the point has relevance to the later argument concerning relocation. 14 The third ground is general. The written submissions of the appellant in relation to it raise a similar point to the third ground in the Federal Magistrates Court --- that the Tribunal failed to consider the special position of a male Muslim homosexual in the Philippines. That point was reiterated by the appellant in his oral submissions. It is pointed out that none of the country information identified by the Tribunal referred to that issue. The issue was not expressly dealt with by the Federal Magistrate. 15 The gravamen of the appellant's claim for protection was his special position as a male Muslim homosexual in the Philippines. The Tribunal accepted that he was a male Muslim homosexual. However, it did not expressly refer to the consequences of that. Furthermore, the appellant is correct in submitting that none of the country information identified by the Tribunal referred to that circumstance. The Tribunal did not have to expressly deal with every matter raised by the appellant. However, it was obliged to deal with a discrete basis for protection put forward by him ( Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 , (2003) 77 ALJR 1088 at [24] , [95]; Htun v Minister for Immigration and Multicultural Affairs [2001] FCA 1802 ; (2001) 194 ALR 244 at [42] ). Put another way, the Tribunal did not identify the correct social group. Considering the greater class does not necessarily deal with the lesser ( SZBJH v Minister for Immigration and Citizenship [2008] FCA 501 at [35] ---[42]). The appellant's contention was, and is, that a male Muslim homosexual was in a different, and more vulnerable, position than other male homosexuals in the Philippines. That contention was not considered. 16 The manner in which the Tribunal dealt with the particular instances of persecution claimed by the appellant may well have been influenced by its failure to focus upon the true nature of the appellant's claim and by its view about the position of homosexuals generally in the Philippines. 17 It is submitted for the respondent Minister that the findings by the Tribunal are inconsistent with the appellant fearing persecution as required by s 91R of the Act. It is submitted that neither serious harm nor systematic and discriminatory persecution was or could be established, referring to VBAO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 60 ; (2006) 231 ALR 544 ; (2006) 81 ALJR 475. 18 It is not clear that this point was raised before the Federal Magistrates Court, and is not raised by notice of contention. In any event, the point is not decisive. In my opinion, if the appellant's case is taken at its highest, s 91R could possibly be met. He paints a serious picture as to the plight of a Muslim homosexual male suffering from crushing oppression, including psychological harm, physical harm and the threat of physical harm, with no effective State protection. I am not satisfied the Tribunal squarely dealt with that case. As I have said, the manner in which it dealt with particular incidents may have been coloured by the failure to focus upon the essence of the appellant's claim. Whilst the appellant may well have difficulty in persuading a properly directed Tribunal that the requirements of s 91R are met, I cannot rule out that possibility. 19 It is also submitted by the Minister that the Federal Magistrate was correct in holding that the relocation finding by the Tribunal was decisive. The difficulty with that argument is that the Tribunal did not concentrate upon the position of a Muslim male homosexual from his family and his tribe in Manila or elsewhere other than Mindanao. 20 The appellant apparently did not refer to any particular difficulties in living in Manila. However, the Tribunal does not report asking him about that topic or about the practicality of relocation or his fear of persecution if relocated. As far as the reasons for decision go, the Tribunal had no information from the appellant on those points. It is to be noted that the appellant said that he, in effect, disguised that he was Muslim (cf Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473). It does not follow that there would not be persecution of Muslim male homosexuals in Manila simply because it is not predominantly a Muslim city. Again, it may well be that a properly directed Tribunal will find that relocation is an answer to the claim. I am not satisfied that such a finding is inevitable. 21 The appeal will be allowed; the orders of the Federal Magistrates Court will be set aside; and, in lieu thereof, it will be ordered that the decision of the Tribunal be set aside and the matter remitted to the Tribunal for further decision according to law. The respondent Minister will pay the costs (if any) of the appellant of this appeal and of the Federal Magistrates Court proceeding. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | protection visas appellant a filipino muslim homosexual male appeal from decision of federal magistrates court affirming decision of refugee review tribunal whether tribunal erred in failing to consider discrete basis for protection in appellant's being both muslim and a male homosexual whether serious harm feared whether relocation finding of tribunal conclusive where discrete basis for protection not considered appeal upheld matter remitted to tribunal migration law |
It is, as his counsel accepts, offensive, embarrassing and discloses no reasonable causes of action. Further it does not reveal the cause of action counsel now indicates he actually seeks to plead. It would be a wholly fruitless exercise to chronicle here the deficiencies and errors in the pleading as I am satisfied, in any event, that the application itself, even if repleaded as counsel foreshadowed, has no reasonable prospect of success and accordingly summary judgment ought be given against the applicant under s 31A of the Federal Court of Australia Act 1976 (Cth). The following chronology provides a thumbnail sketch of relevant events. 3 (i) In April 1983, the fourth respondent, CW Construction Pty Ltd (Receiver and Manager appointed) (In Liquidation) ("CWC") issued a debenture to Citicorp Australia Ltd ("CAL") securing by way of fixed and floating charge a loan made to it by CAL as the first respondent was then named. 4 (ii) On the same date Mr Cirillo entered into a deed of guarantee with CAL in respect of advances made to CWC and moneys paid under a performance guarantee given by CAL. 5 (iii) In February 1985, John Heard and Stephen Young, the second and third respondents were appointed receivers and managers of the assets and undertaking of CWC pursuant to the above debenture. 6 (iv) On 11 March 1985, the Supreme Court of South Australia ordered that CWC be wound up. 7 (v) On 2 May 1985, CAL, CWC and Heard and Young instituted proceedings in the Supreme Court of South Australia against Mr Cirillo and a company asserting that a major item of earthmoving equipment (referred to in this proceeding as "the Poclain") was the property of CWC; was subject to a charge in favour of CAL; and they were entitled to immediate possession of it. 8 (vi) On 3 May 1985, Cox J granted an interim injunction ex parte to the plaintiffs in the above proceedings restraining Mr Cirillo from dealing with the Poclain, the plaintiffs having given the usual undertaking as to damages. On 24 May 1985 that injunction was continued as an interlocutory injunction on the same undertaking. 9 (vii) On 4 June 1992, Mr Cirillo was declared bankrupt and his estate was sequestered. 10 (viii) On 4 February 1993, the proceeding commenced on 2 May 1985 was discontinued and the injunction lapsed. 11 (ix) On 20 June 1995 Mr Cirillo was discharged from bankruptcy by operation of law. 12 (x) In January 1996 he offered to buy from the Official Receiver every chose in action which the Official Trustee, as trustee of his estate, may have against CAL, Heard and Young. The Official Trustee having applied to the Court for directions in this matter, Branson J granted leave under s 135(1) of the Bankruptcy Act 1966 (Cth) for the proposed assignment of the choses in action held by the Official Trustee except in relation to proceedings to set aside the appointment of Heard and Young as receivers and managers of CWC. 13 (xi) On 4 April 1997, Mr Cirillo sought an inquiry as to damages as a consequence of the award of the injunction on 3 May and continued on 24 May 1985 until its discontinuance on 4 February 1993. 14 (xii) On or around 12 May 1997, according to his Statement of Claim in the present proceedings, Mr Cirillo alleges that CAL entered into an agreement with Mr Kerry Packer and/or his various corporate interests with the effect that shares in CAL were sold ("the Packer agreement"). While denying any agreement with Mr Packer, the first to fourth respondents in this proceeding admit that an agreement was entered into by CAL to sell its shares to another company. 15 (xiii) On 3 and 26 July 1997 pleadings were filed in the inquiry as to damages proceeding by the plaintiff and defendants respectively. 16 (xiv) On 18 July 2000 a Master of the Supreme Court ordered the preliminary hearing of five issues from the apparently substantial numbers that had arisen between the parties. 18 (xvi) On 17 September 2004, the Full Court of the Supreme Court of South Australia dismissed Mr Cirillo's appeal against the judgment of Olsson AJ. 19 (xvii) On 3 March 2005, the first to fourth respondents applied to the Supreme Court for costs in respect of Mr Cirillo's application for an inquiry as to damages in the sum of $1.1 million. 20 (xviii) Special leave to appeal to the High Court from the Full Court's decision was refused on 17 June 2005. The Defendant, Vincenzo Giovanni Cirillo, pay to the Plaintiffs, Citicorp Australia Limited, CW Construction Pty Ltd (Receivers and Managers Appointed) (In Liquidation), John Harold Heard and Stephen Elliott Young, the costs (including reserved costs) of and incidental to the Defendant's application dated 4 April 1997 relating to the enquiry as to damages on the Plaintiffs' undertaking as to damages in these proceedings, such costs being agreed and fixed in the sum of $500,000.00. Mr Cirillo applied to this Court in its bankruptcy jurisdiction to have the bankruptcy notice set aside. 23 (xxi) On 2 November 2006, Mr Cirillo instituted the present proceedings in which he claims damages including exemplary damages against all five respondents. As against the fifth respondent it is alleged that they owed a duty of care to the Court, their fellow legal practitioners and the opposing parties and that they acted in breach of that duty in astonishingly expressed ways. I can only say that this claim ought never have been made in the way it was. It is offensive. A like duty of care is pleaded against the first to the fourth respondents. It is no more intelligible. A parallel claim is brought against all respondents under s 82 of the Trade Practices Act 1974 (Cth) for alleged contraventions of s 52 of that Act, this claim relying on the same conduct as in the negligence claim. The rationale for this claim is seemingly that if the conduct was negligent, it also was misleading or deceptive. How that conduct (which all related to circumstances allegedly affecting the conduct of the inquiry as damages application) could be said to be in "trade or commerce" is left as a mystery: cf Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 at 603-604; Little v Law Institute of Victoria (No 3) [1990] VR 257; WJ Green & Co (1984) Pty Ltd v Wilden Pty Ltd, (unreported, Supreme Court of Western Australia, Parker J, 24 April 1997). 25 Two notices of motion were filed by the respondents. The first to fourth respondents sought (inter alia) orders either that the application be dismissed as disclosing no reasonable cause of action and as being vexatious and an abuse of process, or that the Statement of Claim be struck out. Finlaysons' motion while more detailed is, in substance, to like effect. 26 I have already indicated that I would in any event have struck out the Statement of Claim if I did not give summary judgment against Mr Cirillo. As I foreshadowed, I am satisfied that the application ought be dismissed summarily. 28 It is unnecessary for me to speculate further about such a possible claim because there is, in my view, an insuperable obstacle to it as the chronology reveals. 29 The order for costs of $500,000 made by Olsson AJ involved a determination of the rights and liabilities of the parties to the inquiry application in respect of the costs of and incidental to that application that were incurred by them. Mr Cirillo has not sought to have this order set aside. In consequence it stands as a valid and conclusive order of a superior court of record unless and until it is set aside: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 at [27] - [30] . 30 As best I can understand the changing picture presented by counsel for Mr Cirillo in submissions --- it has no reflection in the present pleadings --- the damages claimed for the proposed tort of abuse of process include, it would seem, at least that part of his own solicitor and client costs in the inquiry as to damages which were incurred in consequence of the conduct of the respondents alleged to give rise to the tort. I am uncertain what else the damages would include although it again seems likely that, as in the present application, Mr Cirillo would also be attempting to be relieved indirectly of the obligation to pay some, or part of, the monies he has been ordered to pay under the consent order. 31 Nonetheless, as I have noted, the consent order as to costs determined the incidence of costs as between Mr Cirillo and the first to fourth respondents in respect of all issues of costs in the inquiry as to damages application. For Mr Cirillo to make the claim he now foreshadows without first seeking to have that costs order set aside constitutes, in my view, an indirect challenge to the costs order itself. It is well accepted that a consent order is as efficacious as those pronounced after a contest and can support a plea of res judicata: see Spencer Bower, Turner and Handley, Res Judicata at [38]-[39] (3 rd ed, Butterworths, 1996); Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21 ; (1988) 164 CLR 502 at 508. Though the costs order itself reflected the usual rule that costs follow the event, it represented an agreement by the parties that had both judicial sanction in relation to its subject matter and coercive authority: see Spencer Bower et al [39] (1996). For as long as that order stands --- I do not understand that Mr Cirillo seeks to challenge the substantive judgment of Olsson AJ given on 28 February 2003 --- the principle of finality embodied in the doctrine of res judicata precludes an examination of the incidence of costs, albeit indirectly, in a tort action such as foreshadowed: see Cabassi v Vila [1940] HCA 41 ; (1940) 64 CLR 130 at 139; Cachia v Westpac Financial Services Ltd [2005] NSWCA 239 at [2] ; Markisic v Department of Community Services of New South Wales (No 2) [2006] NSWCA 321 at [45] ff; see also D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12 ; (2005) 214 ALR 92 at [83] . What is envisaged, as I understand it, involves a form of collateral attack on the order made. 32 Counsel for Mr Cirillo has sought to avoid this conclusion by relying on the decision of Hunt J in Hanrahan v Ainsworth (1985) 1 NSWLR 370 where His Honour refused to strike out an action for abuse of process in which costs and expenses associated with an earlier instituted proceeding against the now plaintiff by the now defendant were held to be recoverable in the latter proceeding if proved. 33 That case is clearly distinguishable from the present. The earlier proceeding had never been set down for trial and in consequence no costs order had been made in it. In consequence, no issue of res judicata or of collateral attack on a final order arose in that case. 34 For the above reasons, I am satisfied that the application should be dismissed as against the first to the fourth respondents. 35 In relation to Finlaysons' motion, I am equally satisfied that to allow the application to remain on foot would in the circumstances be manifestly unfair to that firm and would itself constitute an abuse of process. The foreshadowed claim would in substance be seeking (amongst other things) to reverse the effect of the consent order and the agreement underpinning it: cf R v Balfour; Ex parte Parkes Rural Distributions Pty Ltd (1987) 17 FCR 26 at 34. If successful it would result in a judgment that conflicted with Olsson AJ's consent order. 36 I have considered the proposed claim notwithstanding the opaque manner in which it has come forth in the course of the hearing before me. I would dismiss the application against all five respondents for the reasons I have given. 37 However, I would in any event dismiss the application without attempting to divine what the proposed claim might comprehend and for this reason: the present application and Statement of Claim are so removed from the type of claim proposed and are so vexatious in character, as to constitute an entirely inappropriate vehicle for possibly giving life to that claim. 38 I will order that the application be dismissed against all respondents and that the applicant pay the respondents' costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn J. | application that statement of claim be struck out or that summary judgment be given against the applicant under s 31a of the federal court of australia act 1976 (cth) statement of claim disclosed no reasonable cause of action statement of claim was vexatious and an abuse of process. interlocutory application |
The Caltex Australia Group owns and operates two major petroleum fuel refineries, one in Kurnell, New South Wales (the Kurnell Refinery) and the other in Lytton, Queensland (the Lytton Refinery). These refineries process substantial quantities of crude oil to produce principally petrol, diesel and jet fuel. They are the largest oil refineries in their respective states. In addition, the Group owns and operates a lubricating oil refinery, located adjacent to the Kurnell Refinery (the Caltex Lubricating Oil Refinery or CLOR). The CLOR is the only lubricating oil refinery in Australia and it produces a variety of lubricating oil products for sale in Australia as well as for export (including lubricating oil base products such as engine and gearbox oils, as well as waxes and process oils). 2 The petroleum products at each of the three refineries are manufactured by Caltex pursuant to manufacturer licences issued to it under Part IV of the Excise Act 1901 (Cth) (the Excise Act ). Part IV of the Excise Act provides a regime for the grant, suspension and cancellation by the Commissioner of Taxation (the Commissioner) of various licences (including manufacturer licences) required to be held under the Excise Act . Pursuant to s 25 of the Excise Act , it is an offence to manufacture, without holding a manufacturer licence, any goods in respect of which excise duty is imposed by Parliament (referred to in the Excise Act as "excisable goods"). 3 Crude oil is the principal raw material (or "feedstock") refined by Caltex at the Lytton and Kurnell Refineries, while the CLOR processes certain hydrocarbon materials that are produced as part of the operations at the Kurnell Refinery. Crude oil is a naturally occurring liquid consisting of a mixture of hydrocarbons together with various elements considered to be impurities, such as sulphur, nitrogen, various heavy metals (including nickel, iron, vanadium, copper and arsenic) and salts. Hydrocarbons are molecules made up of carbon and hydrogen atoms only, in various combinations and structures, and are one the most important energy resources in the world. They are generally categorised by reference to the number of carbon and hydrogen atoms present in each molecule as well as the particular structure each molecule adopts. Differences in the number of atoms (particularly the carbon atoms) and molecular structure lead to variations in important properties, such as molecular weight and length, density, boiling temperature and volatility. In particular, the weight of a hydrocarbon is generally determined by the number of carbon and hydrogen atoms present. For example, methane is the lightest hydrocarbon, consisting of one carbon atom and four hydrogen atoms (with chemical symbol CH 4 ), while octacontane is significantly heavier with 80 carbon atoms and 162 hydrogen atoms (C 80 H 162 ). One useful method of categorisation refers simply to the number of carbon atoms contained in a molecule, with a convenient nomenclature being the letter 'C' followed by a number reflecting the number of carbon atoms (for example, methane is referred to as C1, whereas C80 identifies a more complex molecule with 80 carbon atoms). 4 Hydrocarbons are also categorised according to their molecular structure, in particular the configuration of carbon atoms and the number of chemical bonds between them. A hydrocarbon in which there are single bonds between each adjoining carbon atom is called an "alkane" (or, as is common in the petroleum industry, a paraffin). These are contrasted with "alkenes" and "arenes" which contain double bonds between carbon atoms. For example, an alkane may consist of a linear chain of carbon atoms (known as a "straight-chain alkane"), it may be branched where one or more carbon atoms branch off the straight line of joined carbon atoms (known as an "isomer"), or in more complex forms the carbon atoms may be found in a cyclic configuration where the last carbon atoms in a line are linked to form a ring. 5 Crude oil processed at the Lytton and Kurnell Refineries contains a mixture of most hydrocarbons from C1 to C80, with varying molecular structures. 6 A similar distillation process is used at the CLOR, although the CLOR's feedstock consists of partially refined hydrocarbon products created at the Kurnell Refinery (known as "waxy gas oils" and "de-asphalted oils") instead of raw crude oil. Further complex refinement and treatment processes are employed at the CLOR to produce the desired lubricating oils and waxes sold by Caltex. 7 Caltex produces various residual materials during the course of its operations at each refinery. These materials are residual in the sense that they are a residuum of the crude oil (or the feedstock oils processed at the CLOR) that remains after the application of the distillation, conversion and treatment processes at each refinery. At the Lytton and Kurnell Refineries, the residual materials generally consist of heavier and more structurally complex hydrocarbons not amenable, at least easily, to further separation, and which are higher in crude oil contaminants such as sulphur and heavy metals. In the case of the CLOR, residual material is produced when the hydrocarbon feedstock is distilled, treated and then separated into streams that contain suitable components for lubricating oils and waxes and those which do not. Caltex applies these residual materials in various ways, including blending them with other materials to produce fuel oils and diesel fuel, exporting them for use as feedstock for other products or blendstocks for fuel oil and, in the case of the CLOR, returning some of them to the Kurnell Refinery for further processing or blending into fuel oil. 8 In addition, at each refinery, some of the residual materials are utilised as a source of supplementary fuel for the refining processes themselves, to generate the required heat for those processes. Caltex refers to these as "refinery fuel oil" (at the Lytton Refinery) and "residual slop oil" (at the Kurnell Refinery and the CLOR). It is these supplementary fuels that are the subject of the current dispute between the parties and I will refer to them collectively as the "residual oils". 9 The Commissioner contends that the residual oils are subject to excise duty under the Excise Tariff Act 1921 (Cth) (the Tariff Act), being petroleum products manufactured or produced by Caltex in Australia and falling within relevant classifications in the Schedule to the Tariff Act (the Schedule). As the residual oils have already been consumed by Caltex, the Commissioner has sought, by way of statutory demand, payment of an amount representing the amount of excise duty for which Caltex would have been liable in respect of the volume of residual oils burnt between 10 March 2002 and 29 May 2006 (being the period for which Caltex was requested to account to the Commissioner pursuant to s 60 of the Excise Act) (the relevant period). It is common ground that, if excise duty is properly payable on the residual oils, the amount payable in respect of the relevant period is $30,774,414.03. 10 Caltex objects to the Commissioner's demand for payment, principally on the grounds that (a) the residual oils are not goods that are relevantly "manufactured" or "produced" by Caltex for the purposes of the Excise Act and Tariff Act and, (b) even if they are, the residual oils do not fall within the classifications in the Schedule relied upon by the Commissioner. As to (b), one particular issue relevant to Caltex's objection is the physical state of the residual oils. The Commissioner relies on item 11(a) of the Schedule, which concerns "liquid" petroleum products. While it is common ground that the residual slop oils at the Kurnell Refinery and the CLOR were liquids, Caltex contends that the refinery fuel oil at the Lytton Refinery was not a liquid petroleum product, and much of the evidence was directed to this question. 11 Before addressing the issues and the relevant legislation in detail, I set out my findings of fact in respect of each of the residual oils. In relation to the residual slop oils at the Kurnell Refinery and the CLOR, Caltex relied on the evidence of Joseph Rollo, Subject Matter Expert --- Energy at Caltex. 13 Mr Zulli holds the Degree of Bachelor of Chemical Engineering and has been employed in various capacities by Caltex Refineries (Qld) Pty Ltd since 1992, including as a process engineer, production manager and reliability manager at the Lytton Refinery. As Technical Services Manager, he currently has responsibility for the Lytton Refinery's chemical engineering and laboratory functions, product quality and testing, process optimisation and troubleshooting of equipment. Ms Roobottom has worked for Caltex Refineries (Qld) Pty Ltd since 1993 and has been the Chief Chemist at the Lytton Refinery for the last three years (as well as a period during 2002 and 2003). As Chief Chemist she has had oversight of Caltex's analytical laboratory, which regularly tests and reports on samples of materials taken from tanks, process units and waste water at the Lytton Refinery. She holds a Bachelor and Masters Degree in Applied Science from Queensland University of Technology. Mr Rollo has worked within the Caltex Australia Group since 1975. Until recently, his title was Refining Best Practice Engineer --- Energy and he provides technical leadership, coordination and advice on the optimisation of the use of energy and utilities (such as water) at each of Caltex's three refineries. 14 The Commissioner relied on an expert opinion provided by Dr Duncan Seddon, an independent consultant to the oil, gas petrochemical and energy sectors. Dr Seddon has held positions with ICI in the United Kingdom and Australia, as well as BHP Co. Ltd. He holds a Bachelor degree in Science and a Ph.D. from the University of Sheffield, UK and is a Fellow of the Royal Australian Chemical Institute and a Member of the Society of Petroleum Engineers. Dr Seddon was asked to provide an opinion on the physical state of each of the residual oils, in particular whether or not they were in liquid form at any time during the relevant period. As the residual oils were not available for inspection by Dr Seddon (having been consumed by Caltex during the relevant period), his task was not easy. His analysis was limited to comparing a description of the residual oils with relevant literature on similar materials. It commenced operations in 1965. The principal products produced by Caltex at the Lytton Refinery are petrol, diesel and jet fuel. Liquid Petroleum Gas (LPG) and nonene, a solvent for specialised uses including surfactant manufacture, are also produced in smaller volumes. Fractional distillation involves heating the crude oil to a specific temperature so that the hydrocarbons can be distilled into "fractions" according to their respective boiling temperature ranges. It is based on the fact that the lighter molecules (those with fewer carbon atoms) will vaporize at lower temperatures and thereby separate from the heavier molecules (which remain in a liquid state) and flow up as gas in a column contained in the CDU. (b) As the gases rise in the column, they cool down as they pass through perforated trays situated at various heights. A temperature spectrum is therefore maintained throughout the CDU column, with the hottest crude oil at the bottom and the vapour containing the lighter hydrocarbons cooling down the higher they rise. When a component of the vapour reaches a point in the column where the temperature equals that component's boiling point, the component will condense and form a liquid, capable of extraction from the CDU by way of a liquid outlet along the height of the column. The crude oil in the CDU is usually heated to around 320deg.C, with 340deg.C set as a maximum, so that as much of the oil as possible is vaporised and distilled without the hydrocarbon molecules decomposing into elemental carbon (or "coke"), which can occur at temperatures above 350deg.C. (c) Approximately 60-70% of the crude oil feedstock vaporizes in the CDU column and various streams are extracted from the CDU (for example, naphtha (C3-C8), kerosene (C8-C12) and diesel (C11-C18)). These streams are subject to further purification and treatment processes, before they end up as petrol blendstocks or final products such as commercial propane and butane, autogas, jet fuel and diesel. The rest of the crude oil in the CDU column remains in a liquid state at the bottom of the column. This is referred to by Caltex as "reduced crude". It consists generally of hydrocarbons in the range C18 and above and contains most of the contaminants from the original crude oil. (d) The reduced crude is then sent to a unit known as the fluidised catalytic cracking unit (FCCU), in which it is subject to a "catalytic conversion" process. This involves the use of various catalysts and heat to break down or "crack" the heavier molecules in the reduced crude into lighter molecules in the range C3 to C18, which can then be distilled and siphoned in a similar way to the CDU once the catalyst is removed. However, not all of the reduced crude is capable of being cracked and a residue will remain. This consists typically of long paraffins (single carbon bonded hydrocarbons in the range C18-C80) and more complex cyclic compounds that the catalyst is not able to penetrate, as well as heavy metals and other contaminants like sulphur and nitrogen compounds. The residual material represents approximately 1.5% of the crude oil feedstock and Caltex refers to it as "fractionator bottoms" or "cracker bottoms". (e) A portion of the fractionator bottoms are then sent to a "slurry settler" where the catalyst from the FCCU is removed as far as possible, by allowing the bottoms to rest and the catalyst to sink to the bottom of the tank. This leaves two streams of oil, one on top generally free from catalyst (referred to as "clarified oil") and the other containing the catalyst (referred to as "slurry oil"). While the slurry oil is sent back to the FCCU to recover the catalyst, the clarified oil is stripped with steam to remove any entrained lighter hydrocarbons and a portion is then sent to various tanks for storage. (f) Caltex does two main things with the clarified oil. It exports the majority of it and uses the remainder as a supplementary source of fuel, which it calls refinery fuel oil (Lytton Refinery Fuel Oil). As to export, the majority (meeting basic density and sulphur specifications) is exported to a company called Sumitomo in Japan for use in carbon anode manufacturing, while some is exported to Singapore and elsewhere as a blendstock for fuel oil. The Lytton Refinery Fuel Oil is used to supplement the refinery's fuel gas system, which collects gases created during the various refining processes (for example, methane (C1) and ethane (C2)) and uses them as fuel to generate heat as required. Mr Zulli gave evidence that the main objective of the Lytton Refinery is to extract the maximum amount of valuable hydrocarbons from the crude oil and therefore to minimise as much as possible the residual material that is left over, being the clarified oil. He explained that the clarified oil does not meet specifications for fuel oil in Australia, but there is nevertheless a market for it notwithstanding its inferior quality. In particular, Caltex sold clarified oil in the 2004 year at an average price of $244 per tonne (24c per litre), albeit it at a discount of approximately 25.4c per litre to the price of regular fuel oil. While Caltex no doubt aims to maximise the extraction of those materials for which it can obtain higher prices, the refinery processes are designed to ensure that "residual" material is isolated and used in as economical a fashion as possible. (b) While the clarified oil may not meet minimum Australian specifications for fuel oil, it nevertheless has a commercial use for Caltex as an export product or an internally consumed fuel source. (c) Using the clarified oil as burner fuel at the Lytton Refinery is an economical use of the oil when compared to the higher costs Caltex would incur in purchasing fuel oil from elsewhere, even allowing for the fact that the clarified oil may cause some damage to equipment. Mr Zulli explained that the oil is "very thick" and under normal conditions is kept at a temperature above 80deg.C to avoid it solidifying and to ensure that it can flow throughout the system. It is kept in this condition at all relevant times; while it is "clarified" in the slurry settler, while it is stored and transported in tanks for export, and when it is finally used as a Refinery Fuel Oil at Lytton (or as a blendstock overseas). 20 Ms Roobottom's evidence was premised on her view that a material is regarded as a "liquid" if it is in a liquid state at standard temperature and pressure, which she identified as being 20deg.C and 101.3kPa. Less frequent testing is also conducted on the clarified oil contained in Caltex's storage tanks to determine density, carbon residue, kinematic viscosity (in other words, the oil's resistance to flow) and the oil's "pour point". (b) The pour point test identifies the lowest temperature at which movement of the oil is observed. Caltex determines the pour point (and did so during the relevant period) because in order for the oil to flow it is necessary for Caltex to heat it in the refinery's transport pipes, or flush it with a liquid that has a lower pour point. It must also be kept at a sufficiently high temperature when stored in Caltex's export tanks, to avoid solidification. (c) The pour point test is also an acceptable test for determining the temperature range over which a material will undergo a phase transition from a solid to a liquid and vice versa. Ms Roobottom relied on an OECD guideline dated 27 July 1995 entitled OECD Guideline for the Testing of Chemicals --- Melting Point/Melting Range (OECD Guideline), which identifies several test methods, including the pour point test, as appropriate for the determination of phase transition. (d) Caltex's testing during the relevant period shows that on average the clarified oil tested had a pour point of 30deg.C. Save for three samples (out of 33), all samples displayed a pour point of between 24deg.C to 39deg.C. Accounting for a standard error factor, the lowest pour point temperature was 21deg.C-24deg.C and the highest was 36deg.C-39deg.C. (e) As the pour point temperatures were higher than standard temperature (20deg.C), Ms Roobottom concluded that the clarified oil was a solid rather than a liquid at standard temperature and pressure. 21 Dr Seddon was not provided with samples of any of the clarified oil, as oil from the relevant period was either consumed or sold by Caltex or, in the case of test samples, disposed of after a period of retention in accordance with Caltex's standard practice. Dr Seddon acknowledged in cross-examination that, even if the test samples had been available to him, their properties may have changed to such an extent that they would not be representative of the clarified oil. In any event, nothing of substance was made of the fact that the original test samples had been disposed of by Caltex and I make no adverse findings in that regard. The test does not measure heat transfer and it therefore does not conclusively determine whether a material has moved from one phase (liquid) to another (solid). (b) Instead, the pour point test is used to determine the flow characteristics of a liquid, in order to judge the liquid's utility for certain applications (such as pumping the liquid through pipes in a refinery). (c) Further testing would be required to ascertain whether the clarified oil had gone through a phase transition. An example of an appropriate test would be differential scanning calorimetry (DSC testing), which would provide relevant thermodynamic data regarding heat changes in the liquid to solid transition. (d) In the absence of thermodynamic data, Dr Seddon deduces that the clarified oil will remain in a liquid state over the temperature range 5deg.C to 30deg.C (which he described as ambient temperatures typical in a refinery). Accordingly, at those temperatures, the clarified oil is best described as a viscous liquid. As it cools to those temperatures, the oil increases in viscosity but does not solidify. 23 Dr Seddon was asked about Ms Roobottom's use of 20deg.C and 101.3kPa as standard temperature and pressure reference points. In his view, the phrase "standard temperature" is an arbitrary term and will mean different things in different locations and industries (for example, where American units are used, standard temperature is 60deg.F (15.5deg.C) and in his own experience, 0deg.C is often used). In cross-examination, Dr Seddon said that he had never before come across a statement to the effect that a material is generally regarded as a liquid if it is in a liquid state at standard temperature and pressure. It is not his experience that a general description of state would be used by reference to a standard set of conditions. In each case, the answer to the question "Is it a liquid? " will be "It depends on to what temperature and pressure (and potentially other conditions) the material is subject". 24 Dr Seddon was not familiar with the OECD Guideline prior to reading Ms Roobottom's second affidavit. Frequently the transition from solid to liquid phase takes place over a temperature range. Therefore, the term "melting range" is often used and, in practice, the temperatures of the initial and final stages of melting are determined. The melting point ideally is identical with the solidification or freezing point. For some substances (rather products and mixtures) however, the determination of the freezing or solidification temperature is easier. Where, due to the particular properties of the substance (or product), none of the above parameters can be conveniently measured, a pour point may be appropriate. ... PRINCIPLE OF THE TEST 7. The temperature or temperature range of the phase transition from the solid to the liquid state or from the liquid to the solid state is determined. This method was developed for petroleum oils and is suitable for oily substances with low melting temperatures. After preliminary heating, the sample is cooled and its flow characteristics are examined at intervals of 3 K [equivalent to intervals of 3deg.C]. The lowest temperature at which movement of the substance is observed is recorded as the pour point. 26 In cross-examination, Dr Seddon acknowledged that the OECD Guideline endorsed the use of a pour point test to determine melting point or melting range. However, he took the view that the Guideline only assisted if one made the assumption that the relevant material in fact had a definitive melting point range. In other words, the methods described in the Guideline do not conclusively prove that a phase transition has occurred (for example, from solid to liquid). Instead, they assume there will be a phase transition and report the temperature range over which the transition will occur. 27 I am satisfied that the clarified oil samples were in a solid state under the conditions in which they were tested. The OECD Guideline states that the pour point test may be appropriate for determining phase transition and that the test was developed for petroleum oils and is suitable for oily substances with low melting temperatures. The Guideline also endorses the test proffered by Dr Seddon, DSC testing. While Dr Seddon said that the Guideline assumed there would be a phase transition, he acknowledged that the clarified oil in question would be subject to a phase transition at some point, albeit in his view not necessarily at the pour point. I accept Dr Seddon's evidence that further testing to obtain relevant thermodynamic data would provide stronger evidence of a phase transition. However, I also note Dr Seddon's acknowledgement that DSC testing would not provide the same level of clarity for a complex substance such as the clarified oils as compared to pure substances. The tests were conducted by Caltex contemporaneously with the production of the clarified oil and in accordance with applicable standards. On balance, I find that the clarified oil is in a solid form at a temperature of 20deg.C and pressure of 101.3kPa. 28 However, for reasons I further explain below at [98] to [102], I consider the relevant question to be whether the clarified oil is a liquid or solid under the conditions in which it is produced, stored and consumed. As referred to at [19] above, Mr Zulli's evidence was that the clarified oil is in a liquid state when it (a) clarifies in the slurry settler, (b) is transported around the refinery (in steam jacketed and steam coiled pipes) and (c) is stored in Caltex's refinery fuel oil tank or export tanks (which are also insulated with steam coils inside the tanks). The clarified oil is kept in this condition until it is used as supplementary burner fuel for the refinery. It was therefore common ground that at the temperatures at which it is maintained and utilised (80deg.C) the clarified oil is properly characterised as a liquid. This is the description of the oil that Caltex itself adopts in its Material Safety Data Sheet dated January 2005. It has a wider range of refining processes than the Lytton Refinery and is able to process two different crude oil mixes, a "sweet" crude mix (low in sulphur) and a "sour" crude mix (higher in sulphur). It is thus referred to as a "dual-train" operation. Caltex's principal products at the Kurnell Refinery are petrol, diesel and jet fuel. LPG, fuel oil and bitumen are also produced. One CDU is dedicated to "sweet" crude mixes and the other is capable of processing both "sweet" and "sour" mixes. At temperatures of about 370deg.C in the CDUs, the crude oil is distilled into fractions comprising "unstabilised light straight-run naptha", "heavy straight-run naptha", kerosene and "straight-run diesel". These are treated further to produce LPG, petrol blendstocks, naptha, jet fuel, heating oil and diesel fuel. (b) For further distillation, reduced crude (the residue from the CDUs) is sent either to Kurnell's FCCU (when the reduced crude is lower in contaminants) or a unit called the "vacuum distillation unit" (VDU) (when it is higher in contaminants). The VDU is similar to the CDUs but is able to extract additional lighter hydrocarbons from the crude because it operates under reduced pressure and higher temperatures. The fractions distilled in the VDU are typically blended with straight-run diesel and another substance called "light cycle gas oil" (which is produced in the FCCU) to make diesel fuel. Depending on their precise properties, the VDU fractions may also be suitable to send to the CLOR for use as feedstock. (c) As with the CDU, a portion of the reduced crude in the VDU will not boil (and therefore separate into components) and remains in the VDU as a residue called "vacuum bottoms" or "vacuum resid". Vacuum resid comprises very large, long chain and heavy hydrocarbon molecules, including a group called "asphaltenes", along with high levels of crude oil contaminants. De-asphalted oil is then subjected to a catalytic conversion process in the FCCU or, if suitable, sent to the CLOR as feedstock. The asphaltic PDU bottoms are used mainly in the manufacture of bitumen. (e) There are two FCCUs at the Kurnell Refinery, one for "sweet" and one for "sour" crude oil mixes. Similarly to the Lytton Refinery, the FCCUs are used to "crack" the various residual materials produced earlier into lighter materials for use as blendstocks. The FCCUs can be used to process reduced crude from the CDUs, vacuum resid, heavy diesel and also waxy materials created at the CLOR. Following the "cracking" process, the feedstock for the FCCU is distilled into fractions in a fractionator column, leaving behind a residue (or, "cracker bottoms"). These cracker bottoms account for approximately 2-3% of the material fed into the FCCU. (f) One of the fractions in the FCCU is "light cycle gas oil" (LCGO), which is drawn from about half way down the fractionator column. LCGO is unstable and has high levels of sulphur. Commonly, LCGO is blended with straight-run diesel from the CDU and hydrotreated (treated with catalyst to remove sulphur and other impurities) to produce diesel fuel. However, restrictions on sulphur content and density specifications for diesel fuel mean that there is only so much LCGO that can be used for that purpose. LCGO is also used to blend with fuel oil, as a seal oil or "torch" oil to control burning in the FCCUs' catalyst regeneration system, or as a flushing agent. 31 As is evident from the above, a number of residual materials are created in the process units at the Kurnell Refinery --- vacuum resid, asphaltic PDU bottoms and cracker bottoms. Further, recent times have seen Caltex create excess quantities of LCGO, due in part to a lowering of the authorised sulphur content for diesel fuel, and Caltex has as a result exported large quantities of it. Unlike the Lytton Refinery Fuel Oil, the Kurnell Residual Slop Oil is of relatively low viscosity and Caltex does not keep it heated whilst in storage. Given its recent excess quantities, LCGO has been the main component of Caltex's Residual Slop Oil in the period from 2002 to 2006. It differs to the Lytton and Kurnell Refineries as it is dedicated to the manufacture of a single product at any one time. Waxy gas oils are fed into the VDU at the CLOR and distilled into a "dry gas oil" and various "wet gas oils". The distillates are categorised by reference to their weight (for example, 70D, 150D, 300D and 500D). The residue in the VDU ("vacuum bottoms") is typically sent back for processing in the FCCU at the Kurnell Refinery. It receives distillates from the VDU at the CLOR and de-asphalted oil from the Kurnell Refinery. The resulting product is called "treated" oil (for example, 150D will become 150 Treated, or 150T). (b) The FRU applies a special solvent to the treated oils, called furfural, in order to dissolve out less desirable components ("extracts") and leave behind a stream suitable for lubricating oil and wax production, called "raffinates". Napthene can also be produced in the FRU. A typical operation cycle will therefore produce from 150T, as an example, 150 treated raffinate (150TR), 150 treated pseudo extract (150TPX) and 150 treated pseudo napthene (150TPN). (c) The SDU uses a solvent in a filtering process to separate oil and wax components of the raffinates received from the FRU. The separated oil and waxes form the basis of the lubricating oil and wax products sold by Caltex. 37 An amount representing about half of the feedstock for the CLOR ends up as a residue from the CLOR's processes, because it is unsuitable for lubricating oil and wax production. The residual material includes the vacuum bottoms and the napthene and extract streams from the FRU. Caltex returns the majority of these to the Kurnell Refinery for processing in the FCCU or for blending into fuel oil. However, the rest of the residues are retained by Caltex at the CLOR and blended into a "residual slop oil" for use as a supplementary fuel source at the CLOR (CLOR Residual Slop Oil). While Caltex has used vacuum bottoms and some dry gas oil as the basis for the CLOR Residual Slop Oil in the past, some of the lighter extract streams (70TPX and 150TPX) have become the main ingredient in more recent times. Similarly to the Kurnell Residual Slop Oil, the CLOR Residual Slop Oil is of relatively low viscosity and is not heated whilst in storage. 38 The findings I have made at [18] in relation to the Lytton Refinery Fuel Oil are applicable to both the Kurnell and CLOR Residual Slop Oils. The "residual" materials created at the Kurnell Refinery and the CLOR are useable in a variety of ways, for example as blendstocks. They therefore have a value to Caltex and Caltex ensures that the most efficient use is made of them as possible. The Residual Slop Oils are a blend of these residues and provide an additional source of fuel, and therefore an alternative form of energy, for Caltex to conduct its operations at the refineries. 40 Following receipt of the Advice, Caltex commenced proceeding VID 547 of 2006 on 18 May 2006, seeking declarations in relation to the application of the Excise Act and the Tariff Act to each of the Lytton Refinery Fuel Oil, Kurnell Residual Slop Oil and CLOR Residual Slop Oil (the s 39B proceeding). 41 On 30 May 2006, the Commissioner served on Caltex a request pursuant to s 60(1)(b) of the Excise Act for it to account for each of the residual oils for the relevant period. For example, by either the reporting and payment of the requisite duty, the presentation of the relevant goods, evidence of their transfer to another licensed entity, or evidence of their incorporation into other excisable goods. 42 Caltex responded by letter on 9 June 2006 contending that the residual oils were not "excisable goods" and the Commissioner was not entitled to make a request to account under the Excise Act . Alternatively, Caltex sought to account by noting that each of the Lytton Refinery Fuel Oil, Kurnell Residual Slop Oil and CLOR Residual Slop Oil were during the relevant period used as fuels in generating the required heat for the refining processes at each of the respective refineries. 43 On 28 June 2006, the Commissioner (through his delegate, the Acting Deputy Commissioner of Taxation) served on Caltex a statutory demand for the amount of $48,676,126.13 in respect of the residual oils. The amount due was expressed to be a "debt", being "the liability of the company under subsection 60(1) of the [Excise Act]". 44 In accordance with s 162C(1) of the Excise Act , Caltex delivered a notice of objection to the Commissioner on about 24 August 2006, objecting to the entirety of the statutory demand. The Commissioner disallowed the objection with reasons on 20 October 2006 (the objection decision). On 14 December 2006, Caltex commenced proceeding VID 1372 of 2006, in which it appeals against the objection decision pursuant to Part IVC of the Taxation Administration Act 1953 (Cth) (the tax appeal). Before me, the parties essentially agreed that, given the substantial overlap, the issues raised by both the s 39B proceeding and the tax appeal could each be dealt with by the making of appropriate orders in the tax appeal. I have approached the matter on that basis. 45 Following receipt of Caltex's Statement of Facts, Issues and Contentions and affidavit evidence, the Commissioner on 26 August 2008 filed an amended appeal statement in the tax appeal. Both Acts are to be read as one: see Excise Act , s 6 and Tariff Act, s 2. Goods that are subject to duty under s 5 are "excisable goods" for the purposes of the Tariff Act and Excise Act : see s 4 of the Excise Act (definition of "excisable goods"). Caltex's position is that the residual oils were neither "manufactured" nor "produced", nor are they goods "dutiable under the Schedule". 48 In the form it took during the relevant period, item 11 of the Schedule specified the rates of duty for various petroleum and related products. As common to tariff schedules, the Schedule provides a general description of the subject products followed by a more specific delineation of the dutiable products together with their related rate of duty. 49 Items 11(A) --- (L) then provided rates of duty for products falling within the categories described in items 11(a) --- (f). If that contention is correct (which Caltex disputes), then the Commissioner relies on item 11(I)(3)(d) as the head of duty applicable to the Kurnell Residual Slop Oil and CLOR Residual Slop Oil. As to the Lytton Refinery Fuel Oil, both parties are now in agreement that, should it fall within item 11(a), then the applicable head of duty is item 11(D). That item refers to s 3(4) of the Tariff Act which sets out density, carbon residue and minimum kinematic viscosity characteristics. It is common ground that the Lytton Refinery Fuel Oil had the prescribed fuel oil characteristics during the relevant period. 51 The Excise Act regulates and provides the framework for the Commonwealth's excise duty regime, including the licensing of manufacturers and producers, excise supervision, payment and collection of duty, and the prosecution of and imposition of penalties for breaches of the Excise Act . For present purposes, "the Collector" means the Commissioner of Taxation: see s 4 (definitions of "Collector" and "CEO"). 53 Subsections 61(2) and (3) impose penalties in respect of any unauthorised movement, alteration or interference with excisable goods that are subject to the Commissioner's control. 54 Sections 58, 59 and 61C are relevant to the concept of delivery for home consumption. (b) Removal to an approved place that is an approved place in relation to goods of all kinds or in relation to goods of the kind that are to be entered. 56 Section 61C empowers the Commissioner (or other authorised officer) to give permission for specified goods to be delivered for home consumption without the formal entry of the goods under s 58. (2) Goods delivered for home consumption by authority of subsection (1) shall, for the purposes of this Act, be deemed to be entered for home consumption on the day on which they are so delivered. These permissions allowed Caltex to deliver petroleum products for home consumption for each period of one week, without an entry of those products for home consumption being made and passed under the Excise Act and without payment of excise duty on those products until the day following the end of each weekly period. Delivery in that manner was permitted on condition that Caltex provided the Commissioner with a weekly return specifying the quantities of goods delivered, the excise tariff classifications applicable and the amount of duty payable. 58 Section 60 of the Excise Act deals with the safe keeping of excisable goods and requests to account for goods by the Commissioner. (b) If they were, whether the residual oils are properly characterised as "refined or semi-refined liquid petroleum ... products" so as to fall within item 11(a) of the Schedule. (c) Whether the Kurnell Residual Slop Oil and the CLOR Residual Slop Oil fall within item 11(I)(3)(d) of the Schedule (it being agreed by the parties that the Lytton Refinery Fuel Oil will be subject to duty under item 11(D), if item 11(a) applies. (d) Whether the residual oils were "delivered for home consumption" by Caltex for the purposes of ss 61 , 61C and 59 of the Excise Act . Whether the residual oils meet this description is therefore a threshold question. In reliance on Commissioner of Taxation v Jax Tyres Pty Ltd (1984) 5 FCR 257 ( Jax Tyres ), Caltex said that the essence of manufacturing or producing is that what is made shall be a new and different article having a distinctive character or use from that out of which it is made. The residual oils are not made from crude oil, it said, but are an undesirable material left over at the completion of a process designed to manufacture other products (for example, petrol, diesel and jet fuel). Caltex focussed on the objectives of its refinery operations. It said that far from those operations being directed to making the residual oils, their existence was neither intended nor desired and Caltex at all times sought to minimise their creation. Rather than being manufactured goods, it said, the residual oils are an inevitable consequence of making the goods that Caltex intended for sale. 62 At the core of Caltex's argument was a characterisation of the residual oils as a type of "waste" produced as part of a manufacturing process but requiring "disposal" in some manner. Disposal by burning as a refinery fuel it said was analogous to scrap wood being burnt by a carpenter to heat his or her factory. This accords with the dictionary definition. ... ... To manufacture an article necessarily involves producing a different article from the articles, materials or ingredients from which it was made. Whether the article which results from the process of manufacturing is a different article from the constituents or ingredients from which it was made is a question of fact: the Jack Zinader case. "Production" ... is a word of wide import; but it still involves the element of producing something different from the materials from which it was made. It is not possible to formulate precise definitions of such general terms as "manufacture" and "production"; but they do not bear a restricted meaning. Whatever answers the description of "manufacture" or "production" of goods according to accepted usage of the English language is within the Act. 66 The courts have attributed an ordinary meaning, within the "accepted usage of the English language", to the terms "manufactured", "manufacture" and "manufactured goods" in a number of cases: see Federal Commissioner of Taxation v Rochester [1934] HCA 17 ; (1934) 50 CLR 225 at 226 (Dixon J); MP Metals Pty Ltd v Federal Commissioner of Taxation [1968] HCA 89 ; (1978) 117 CLR 631 at 649 (Menzies J); Jax Tyres at 261; Federal Commissioner of Taxation v Jack Zinander Pty Ltd [1949] HCA 42 ; (1949) 78 CLR 336 at 344-355 (Dixon J); Commonwealth v 5 Star Foods Pty Ltd (2002) 167 FLR 214. To my mind this meaning comprehends the application of a repetitive process, especially a mechanical process, to a thing or things to bring it or them to a form or condition specified. This process may be directed to producing a thing in a state fit for sale, for consumption by the end user, for attachment to or assembly with other things or for some further process. I do not accept Caltex's submission that the residual oils are not "made" from crude oil. Similarly to all of its other products, the residual oils are derived from raw crude oil and exist only because the crude oil has been subjected to a refining process. Their composition is different to that of the crude oil and they are evidently a "different thing" to the crude oil out of which they are made. The fact that Caltex seeks to maximise the quantity of higher value products it produces does not in my view require a conclusion that the residual oils are not themselves manufactured or produced. They are brought into existence by Caltex and are products of the refining process. They are systematically extracted from that process and brought into a usable form. 68 The Commissioner submitted that the Lytton Refinery Fuel Oil is manufactured or produced when the clarified oil is stripped with steam to remove any lighter hydrocarbons and is then split into streams, one returning to the FCCU for use as a cooling agent and the other sent to Caltex's export tanks (if certain limited specifications are met) or Caltex's dedicated refinery fuel oil tank. Once dedicated, the Commissioner said, the Lytton Refinery Fuel Oil has been manufactured. I agree. The clarified oil (which forms the basis of the Lytton Refinery Fuel Oil) is derived from the crude oil, isolated by Caltex and brought to a state fit for use: see my findings at [16(f)], [17] and [18]. The majority of the clarified oil is sold as an export good, for use in carbon anode manufacturing or as a fuel oil blendstock. Albeit of a lower quality compared to Caltex's other products, Caltex is able to sell the clarified oil and does so in large quantities. Caltex does not sell the Lytton Refinery Fuel Oil to third parties. However it dedicates and maintains it for its own consumption as a burner fuel in its refinery operations. 69 Similarly I accept the Commissioner's submission that the Kurnell Residual Slop Oil and CLOR Residual Slop Oil are manufactured when their respective components are blended together and the resulting product is dedicated for use by Caltex as a burner fuel. In the case of the Kurnell Residual Slop Oil each of its constituent components (vacuum resid, asphaltic PDU bottoms, cracker bottoms and LCGO) has an economic value and is used variously as feedstocks or blendstocks: see my findings at [30(f)] and [31]. Much of the LCGO is in fact exported for sale by Caltex. When blended, these components form a discrete product and serve a particular purpose for Caltex. LCGO was the dominant component of the Kurnell Residual Slop Oil for much of the relevant period and its uses were made plain by Caltex; as a fuel oil blend, seal oil, torch oil, flushing agent or in this case a burner fuel. 70 The CLOR Residual Slop Oil is similarly made up of components which, while not suitable for wax or lubricating oils, may be used for blending into saleable fuel oil. In my view Caltex manufactures the CLOR Residual Slop Oil oil when it isolates the relevant residual streams and blends them to create a burner fuel useable at the CLOR. 71 Caltex laid emphasis on the fact that none of the residual oils is an intended object of the activities it undertakes at the refineries. Accordingly it said that to characterise the residual oils as manufactured or produced goods would lead to the strange result that Caltex was unintentionally manufacturing something. However for the purposes of s 5 of the Tariff Act, the critical question in my view is whether objectively speaking the goods in question can be said to have emerged from a process as a "new and different article ... having a distinctive character or use": see Jax Tyres 5 FCR at 264 (Lockhart J). The focus of s 5 is on the extant goods that are made subject to duty, not on the person who manufactures them or that person's stated objectives. Duty is imposed "on" goods by reference to their quality as manufactured goods. It is not imposed with any reference to the relative value of the goods or the subjective intentions of the manufacturer. This is not to say that the principle objectives of a commercial operation will not be relevant to the question of characterisation. They provide the context for the task of characterisation and are an important factor to take into account. They are not however determinative of the question. In any event I do not think it is accurate to say that Caltex unintentionally manufactures the residual oils. They are not the principal products created at the refineries, but it is clear that Caltex intends to bring about all of the known consequences of the refining process, which includes the production of the residual oils. In doing so its objective is to extract as much value as possible from the crude oil. I do not accept Caltex's pejorative characterisation of the residual oils as waste or rubbish. It did not dispose of them as if they were waste; it consumed them in a productive manner. Is "produced" limited to tobacco production? The Excise Act draws a distinction it said between goods manufactured and goods produced, because the Act has distinct licensing arrangements for "licensed manufacturers" and "licensed producers", the latter of which are held only by producers of tobacco: see Division 2 of Part III of the Excise Act . Caltex said that "produced" should be construed with that context in mind and limited to the production of the various tobacco products identified in the Schedule. 73 I cannot accept that the word "production" must be limited in that way. The contention that it should was not developed by Caltex in any detail. It amounted to not much more than an assertion that a narrow construction was required because of the existence of the specific licensing arrangements for tobacco "producers" in Division 2 of Part III. Division 2 regulates the production of tobacco seed, tobacco plant and tobacco leaf by requiring a producer to hold a "producer licence". A "producer licence" is "a licence granted under Part IV , the holding of which authorises the licence holder to produce tobacco seed, tobacco plant or tobacco leaf". There is nothing express in Division 2 of Part III of the Excise Act that could be said to limit the ambit of the word "produced" in the Tariff Act. Further, s 5 of the Tariff Act gives no indication that "produced" is intended to be limited to tobacco production. To the contrary s 5 is in wide terms and applies to " all goods ... manufactured or produced". The Schedule itself reflects the intended width of the term. It describes various goods as "products" --- including those in issue in this case --- and refers to some goods (other than tobacco) as having been manufactured or produced (see, for example, item 11(a) describing "diesel fuel produced or manufactured by the process of refining waste oils ..."). The word "produced" is not defined in the Tariff Act, which one would expect if it were to be given the restricted meaning Caltex contends for. In my view it should be given its ordinary meaning. 74 Neither party referred me to the legislative history of Division 2 of Part III or s 5 of the Tariff Act. I note however that the words "manufactured or produced" have appeared in s 5 of the Tariff Act since its inception in 1921 (and the section itself has remained in the same form since then). At that time no equivalent to Division 2 of Part III appeared in the Excise Act . Division 2 of Part III was introduced in the relevant form in 2000 and I see no reason why its introduction at that time should alter the ordinary meaning of "produced" in s 5 of the Tariff Act. Further, it may be observed that the version of the Excise Act in force in 1923 contained specific provisions relating to the "manufacture" of tobacco and included separate licensing arrangements for "producers" of "material". "Material" included "all material used in the manufacture of excisable goods and declared by proclamation to be material within the meaning of this Act". There could be no suggestion that the word "produced" in s 5 of the Tariff Act was to have borne a restricted meaning relevant only to "material", because "produced" in s 5 quite clearly related to "goods dutiable under the Schedule" (excisable goods) and not the more limited concept of "material" or, for that matter, tobacco. It submitted that the "essence" of a duty of excise is that it is a tax on a step in the production or distribution of goods that are intended to be passed on by a manufacturer to consumers , that is, third party consumers. Consistently with that understanding, it said, the Tariff Act imposes duties of excise directly on or in respect of goods that are destined for consumption by consumers, the relevant excise step being the step of manufacturing or producing the goods before they are passed down the line to consumers. Accordingly it said the terms "manufactured" and "produced" should be construed as applying only to the step of manufacture or production taken with respect to goods intended to reach third party consumers (i.e. not goods that are consumed by their manufacturer). On that basis Caltex said it does not "manufacture" or "produce" the residual oils because it takes no step to bring them into existence as part of a process that ends in their receipt by third party consumers. Instead they are created because they are an inevitable consequence of the process of producing other goods which are intended to reach consumers. 76 Caltex referred to s 15A of the Acts Interpretation Act 1901 (Cth), which requires the Tariff Act to be "construed subject to the Constitution , and so as not to exceed the legislative power of the Commonwealth". It said that if the residual oils are found to have been manufactured or produced (which it disputes), then the Tariff Act would in part have an invalid application by operation of s 55 of the Constitution . (b) Duties of excise, as defined in the case law, are duties imposed on a step in relation to goods that are intended for consumption by third party consumers. (c) If the residual oils are considered to have been manufactured or produced (where they are consumed by Caltex rather than third parties), then the Tariff Act would be dealing with something other than excise duty and would offend s 55. In other words the Tariff Act would be imposing not only duties of excise but a tax in respect of things (the residual oils) that were not a permissible subject of excise duty as contemplated by the Constitution . (d) Accordingly s 5 of the Tariff Act would have an invalid application and s 4AAA of the Excise Act would require, where possible, the reading down of s 5 so that it did not apply to the residual oils. Alternatively s 5 should be held invalid or of no effect. 77 I do not agree that the words "manufactured" or "produced" must be read so as to apply only to goods that are intended to reach a third party consumer or to "go into the market", rather than to goods that might be consumed by a manufacturer itself in the course of its operations. Duties of excise are inland taxes on "a step in the production, manufacture, sale or distribution of goods": see Ha v New South Wales [1997] HCA 34 ; (1997) 189 CLR 465 ( Ha ) at 490. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (In Parton v Milk Board (Victoria) [1949] HCA 67 ; (1949) 80 CLR 229 Dixon J qualified this statement to remove the reference to consumption, following the decision of the Privy Council in Atlantic Smoke Shops Ltd v Conlon [1943] AC 550. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added. The reason is that a duty of excise is, at bottom, a burden upon home production or manufacture. Obviously it is such a burden if it is payable upon a step in production or manufacture in its character of such a step. (Emphasis added. " (Emphasis added. In our opinion, this formulation is the authoritative test which this Court is bound to apply, with the consequence that the tax in question in this case is not an excise. 81 Each of the cases relied on by Caltex involved impugned taxes concerning goods ultimately intended for sale to third party consumers. The question of self-consumption did not arise in any of the cases and I was not referred to any cases in which the conception of a duty of excise had been limited in the manner contended for by Caltex. The Commissioner said that the statement of the Chief Justice in Anderson's 111 CLR 353 was intended to do no more than identify three ways of locating the incidence of an excise duty: the steps of (1) bringing into existence, (2) bringing to a consumable state or (3) passing them down the line to the point of receipt by the consumer. I agree. The passage is consistent with the understanding that an excise may be imposed on discrete steps taking place with respect to goods, without it being necessary that every step take place. The passage does not articulate a principle that excise duties are only those taxes that affect goods destined for consumption by parties other than the original manufacturer or producer. Similarly the emphasis placed by the Full Court in Kithock on the position of consumers was necessary to explain, by way of exclusion, that goods already in circulation amongst consumers cannot be the subject of an excise duty. It is by now clear that consumption taxes are not excises. While it is an essential characteristic of an excise that goods have not yet passed into consumption, I do not accept that it is essential that goods are intended to pass into a market or to be sold to a third party, even though that will be the ordinary occurrence. ... The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (Emphasis added. The residual oils are of use to Caltex and serve an economic purpose. Without them Caltex would need to acquire fuel oil from an alternative source at higher cost. The impost is not levied upon the consumption of the residual oils by Caltex. Nor is it a tax on the ownership of the residual oils. It is an excise in the most obvious sense; a tax upon the step of manufacturing or producing a defined good. In my view, to accept the limitation contended for by Caltex would be counter to the trend of the High Court's decision making from the early decision in Peterswald v Bartley [1904] HCA 21 ; (1904) 1 CLR 497 through to Ha [1997] HCA 34 ; 189 CLR 465 , which has been to enlarge the field of permissible steps of taxation in the context of duties of excise. 84 Further, Caltex's argument arrives at a position whereby excise duties would be limited to taxes bearing the characteristics of an indirect tax --- a tax levied on a person with the expectation that that person will not bear the financial burden of the tax but pass it on to another. The indirectness or otherwise of a tax has been rejected as a necessary element of an excise: see Dennis Hotels Pty Ltd v Victoria [1960] HCA 10 ; (1960) 104 CLR 529 ( Dennis Hotels ) at 583, 585 and 590 (Menzies J); see also Ha 189 CLR at 509. The effect of adopting Caltex's position would be to reject the step of manufacture or production as an occasion in itself for the imposition of an excise and necessitate an inquiry into the subjective intentions of the relevant manufacturer. As I have said the cases demonstrate the stand alone nature of each permissible taxation step and it would not be consistent in my view to introduce a limitation focussed on intention. In other words, unless it be by the use of the words "customs" and "excise" themselves, the Constitution does not adopt the distinction between direct and indirect taxes so that, unless the usage of the words otherwise requires, an import duty on goods imported for use or consumption by the importer would be a customs duty, and a duty upon the production of goods for the producer's own use or consumption would be an excise duty, and both would be beyond the power of the Parliament of a State. In my view a thing capable of description as a manufactured good, and consumed or otherwise applied by its manufacturer in that manufacturer's commercial operations, is capable of being the subject of an excise duty. 85 For those reasons there is no need to construe "manufactured" or "produced" in the limited manner urged by Caltex. Further, no issue of invalidity under s 55 of the Constitution arises because for the reasons I have given the tax imposed by s 5 of the Tariff Act as it applies to the residual oils may properly be described as a duty of excise. 86 One further point should be made. Some of the clarified oil at the Lytton Refinery --- which forms the basis of the Lytton Refinery Fuel Oil --- is in any event sold to third parties as blendstocks and, in the case of the Kurnell Refinery and the CLOR, the constituent components of the residual oils there are used as blendstocks for fuel oils sold by Caltex: see findings at [16(f)], [31] and [37]. Accordingly the residual oils or their components are at least in some cases either sold to third party consumers or used as an ingredient in other products that are sold. I can see no reason why the fact that Caltex consumes those residual oils itself in its commercial operations would render the oils any less a "manufactured good" or a permissible subject of excise duty. ISSUE 2 --- ARE THE RESIDUAL OILS "REFINED OR SEMI-REFINED LIQUID PETROLEUM PRODUCTS"? This turns principally on whether the residual oils should be characterised as "refined" or "semi-refined". The Commissioner's argument proceeded as follows. The residual oils are refined or semi-refined as they exist only because their original subject matter --- crude oil --- has been refined to produce them. The word "refined" must be understood here in the context of a petroleum refining process, being the process of separating and converting crude oil into distinct useable products (with varying hydrocarbon molecular structures). "Refined" was said not to mean "purified" but simply "separated". A plant used to process crude oil or metals. An oil refinery separates the fractions of crude oil and converts them into usable products ... The fact that the residual oils are a result of a process of separation and are themselves a discrete usable product was said to be sufficient for classifying them as refined products, or at least semi-refined products (where further separation and conversion might be possible). 88 Caltex said that "refined" must take its ordinary meaning --- being that which is freed from impurities. Read in context, it submitted, "refined" and "semi-refined" are concerned with a process that begins with raw crude oil or other hydrocarbon feedstock and improves it by removing impurities, being the heavy hydrocarbons and contaminants like sulphur, nitrogen or heavy metals. The residual oils cannot sensibly be described as freed from impurities because they are the impurities, removed from the crude oil as it is processed and therefore removed from the refined petroleum products Caltex manufactures. 89 In response the Commissioner said that the residual oils could only be described as impurities in a relative sense, while they are contained within the other products Caltex manufactures. Once they are themselves a discrete product, they are not impure and are not unusable waste --- they have a commercial use. The character of Caltex's other products, it said, is irrelevant to the characterisation of the residual oils for the purposes of classification under the Schedule. 90 The Macquarie Dictionary defines "refined" as "freed from impurities: refined sugar " and "refined" as "to bring to a fine or a pure state; free from impurities: to refine metal ; to refine sugar ; to refine petroleum ". To purify or separate (metals) from dross, alloy, or other extraneous matter ... 2. To free from impurities ... b. To purify or clarify (a substance or product) by means of some special process; to make purer or of a finer quality ... Refined: 1. Purified; freed from impurities or extraneous matter. Caltex's Product Glossary (see [87]) is not sufficient in and of itself to demonstrate a particular usage. It contains only a short, very general description of what an oil refinery does. It does not in any detail elaborate on the processes involved at an oil refinery and it makes no reference to the concepts of "refined" or "refine". 92 The words must of course be construed in context and by reference to the policies and objectives of the Tariff Act as a whole: K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48 ; (1985) 157 CLR 309 at 315 (Mason J); s 15AA Acts Interpretation Act 1901 (Cth). The context here requires a consideration of the processes involved in petroleum production and the effect those processes have on their subject matter --- crude oil. I do not see any reason however why the ordinary meaning of "refined" ("freed from impurities"; "purified"; "made purer or of finer quality") should not be given to that word as it appears in the Schedule. This is especially so where the refining of petroleum is provided as an example of the ordinary dictionary meaning (see [90] above). 93 When that is done, it follows in my view that none of the residual oils can be said to be "refined" or "semi-refined", for the following reasons. Firstly, they are not themselves freed from impurities or extraneous matter, nor are they purified or clarified. They have not been in any sense made purer or of finer quality. I do not agree that Caltex's other products should be put to one side when characterising the residual oils. A comparison is useful because those other products (kerosene, jet fuel, diesel fuel) are freed from impurities, in that the heavier, less desirable hydrocarbons and the naturally occurring contaminants in the crude oil are separated from the lighter hydrocarbons that make up those products. Those lighter streams are then treated so as to further reduce the level of contaminants and convert them into saleable products. Whereas those products are made purer or of finer quality, the residual oils are essentially the original impurities themselves. 94 Secondly, while it may be correct to say, as the Commissioner suggests, that the residual oils are not impure when considered as discrete goods, this does not mean that they are or have been purified or made finer in quality. The mere fact that they have been produced in a refinery is not sufficient in my view to give them the quality of a "refined" product. Similarly, I do not consider the fact that they have a commercial use makes them a "refined" product. Commercial value or use does not seem to me particularly relevant to whether something should be properly described as "refined". 95 In Attorney-General v The Colonial Sugar Refining Co Ltd (1900) 26 VLR 83 , Madden CJ considered the construction of the term "molasses refined" in Victoria's pre-Federation customs and excise duties legislation. It also appears that when sugar is refined this is a preliminary part of the process it passes through, but that in the case of sugar when this is done the sugar is treated with phosphoric acid in order to eliminate certain matters, and the acid is then eliminated by the use of alum. Subsequently the sugar is submitted to other treatment, which is specifically termed in trade "refining," viz., passing it over charcoal beds, so as to eliminate from it substances naturally in it, that is intrinsic as distinguished from extrinsic impurities, and when this is done the sugar is said to be "refined. " This passing over charcoal is the test which constitutes refinement as distinguished from straining and other processes. (Emphasis added. " Nobody speaks of the refinement of the gold when only separating the quartz and other like substances in which it is found, but which form no inherent part of it, from the metal. One only refines when one comes to retort the gold and the inherent alloys, silver, copper, etc., are extracted from it. Therefore we may take from the meaning in the dictionary that the refining of sugar or molasses stands in the same category as refining of gold, of silver, or of wine. I think that refinement must mean here as sugar is refined, and that the word "refined" would not be properly applied to a mere straining or filtering. 96 Accordingly his Honour held that the molasses, which similarly to the residual oils here was produced as a consequence of the refining of a raw sugar, could not be characterised as "refined" as a result of it being strained to remove extrinsic impurities (frogs, brickbats and nails) that had found their way in during storage. As is evident from his Honour's decision, some form of purification --- in the sense of removing intrinsic impurities --- was central to the concept of refinement or "refined" as it was held to have been used in the relevant Victorian legislation. Contrary to the Commissioner's submission, I do not consider that the process of separating the crude oil into different components in and of itself means that each separated component therefore has the character of a "refined" product. This is especially so where the component in question is essentially removed from the whole because of its inferior or impure nature. 97 It follows from what I have said that none of the residual oils fall within item 11(a) of the Schedule and are consequently not dutiable. However, in case I am wrong on this point, I intend to deal with all remaining issues, which were fully argued. This includes whether the Lytton Refinery Fuel Oil is a "liquid" petroleum product. Is the Lytton Refinery Fuel Oil a "liquid" petroleum product? Caltex contended however that the Lytton Refinery Fuel Oil was not a liquid, for the reasons set out at [20]. It said that the "standard" reference point for determining whether something was a liquid was a temperature of 20deg.C and pressure of 101.3kPa. As I have found at [27] and [28], the Lytton Refinery Fuel Oil is a solid at those standard temperature and pressure conditions but a liquid when it is produced, stored and then consumed as a burner fuel. 99 I do not accept Caltex's submission. Neither the Schedule to the Tariff Act nor the Tariff Act itself contains any stipulation that the relevant "refined or semi-refined" petroleum products in item 11(a) must be liquid at standard temperature or pressure . By contrast, the Tariff Act does in respect of other goods prescribe certain physical properties by reference to specific temperatures and pressures. For example, s 3(4) prescribes the physical characteristics of "fuel oil", which include a density and a minimum kinematic viscosity measured at 15deg.C and 50deg.C respectively. Moreover, the prescription of a standard temperature and pressure for the determination of a liquid state is used elsewhere in the Excise Act . (Emphasis added. centigrade and a pressure of one standard atmosphere". 101 For completeness, I note that it was not seriously contended that the definition of "liquid petroleum" applies to item 11(a). This is because the definition is limited to hydrocarbons "produced from gas wells", whereas item 11(a) and the specific goods referable to item 11(a) (for example, kerosene (11(A)), heating oil (11(B)), diesel (11(C))) are typically produced from crude oil not gas wells. The definition of "liquid petroleum" applies "except where otherwise clearly intended" (see Excise Act , s 4) and I accept the Commissioner's construction --- which Caltex essentially adopted --- that "liquid petroleum ... products" in item 11(a) is a comprehensive reference to petroleum products in liquid form. 102 In the absence of a specific temperature or set of conditions in the Schedule, I consider that the relevant products are to be characterised in the form they take when they come into existence as a discrete product. At that time, and at all subsequent material times, the Lytton Refinery Fuel Oil is in a liquid form and is therefore in my view a liquid petroleum product as described by item 11(a). Are the residual oils a "product" for the purposes of item 11(a)? For the reasons I have given in relation to that issue, the residual oils are in my view "products" for the purposes of item 11(a). ISSUE 3 --- DO THE KURNELL RESIDUAL SLOP OIL AND CLOR RESIDUAL SLOP OIL FALL WITHIN ITEM 11(I)(3)(D) OF THE SCHEDULE? The parties were therefore in agreement that should the residual oils fall within item 11(a) of the Schedule, then the applicable tariff for the Lytton Refinery Fuel Oil is item 11(D). In relation to the Kurnell Residual Slop Oil and CLOR Residual Slop Oil, the Commissioner contends that they fall within item 11(I). Accordingly the residual oils would not fall within that item for the same reason that I have held item 11(a) to be inapplicable. However assuming the residual oils are a 'refined' product, the Commissioner's submissions proceeded as follows. He said that item 11(I), referring to " other refined ... products", specifies the rates of duty for refined or partly refined petroleum products that do not otherwise fall under items 11(A) --- (L). Not being "recycled petroleum products" (see 11(I)(1)) or products "in packages not exceeding 210 litres" (see 11(I)(2)), the residual oils were said to fall under item 11(I)(3) --- "Other". As they were not produced for use as fuel in an internal combustion engine and did not contain the required "marker", item 11(I)(3)(d) ("other") was identified as the applicable tariff at the rate of 38.143 cents per litre. 107 Caltex contends that the word "other" in par (d) must be read in a purposive manner and that when read in context it was clear that it was only intended to apply to products used otherwise than as fuels. Paragraph (d) was inserted into the Tariff Act by the Excise Tariff Amendment Act (No. 1) 1998 (Cth) (the 1998 Act) and Caltex in support of its contention referred to both the explanatory memorandum to the Excise Tariff Amendment Bill (No. 1) 1998 (the 1998 Bill) and its second reading speech. This involved, amongst other things, a new classification structure for petroleum products under item 11 of the Tariff. However, the petroleum industry was concerned the new structure may create misunderstandings in relation to the excise liability of some petroleum products which are intended for uses otherwise than as fuel. These items propose technical amendments to the new item 11, so as to eliminate any potential misunderstandings, or any unintended windfall gains. These amendments involve the introduction of new subheadings into most of the subitems of item 11 [including par 11(I)(3)(d) set out above]. These subheadings cover petroleum products for use otherwise than as fuels and provide excise duty rates of $0.42797 per litre for unleaded products and $0.44972 per litre for leaded products in line with the existing duty differential between such products. These technical amendments do not widen the scope of the fuel substitution minimisation legislation. (Emphasis added. Among other things, that Act introduced a scheme to prevent fuel substitution practices through the use of a chemical marker. The practices targeted involved the substitution of products on which concessional duty had been paid (for example, heating oils or burner fuels) for products on which a higher rate of duty was payable (generally, road transport fuels for use in internal combustion engines). The 1997 Act had introduced a restructured item 11 which included item 11(I)(3) in similar terms to that set out above at [105], but without par (d). Generally, road transport fuels which are for use in internal combustion piston engines attract the highest rates of excise duty. Other petroleum products which are generally for use as burner fuels and are burnt to produce heat are dutiable at concessional rates of duty ... Petroleum products for non-fuel use are dutiable at a "Free" rate of duty. ... [T]he ever increasing differentials in the rates of excise and customs duty on petroleum products have encouraged the practice whereby a product on which a concessional rate of duty has been paid is substituted for a product on which the highest rates of duty are payable in circumstances where the higher duty product would normally be used. At present, however, no mechanism exists whereby this revenue leakage which results from these practices can be contained and the integrity of the policy in respect of petroleum products can be maintained. ... This Bill will ... introduce the requirement that petroleum products on which a concessional rate or a "Free" rate of excise duty is payable must contain a chemical marker, which must be added to the product prior to its entry into home consumption. The addition of the chemical marker will be the cornerstone of the proposed regime. 109 Caltex referred to the second reading speech for the 1998 Bill, which introduced par (d). The prime object was to ensure that petroleum products dutiable at concessional rates of excise duty were not used as fuels in internal combustion engines. ... ... The petroleum industry was consulted at all stages of policy development and implementation of this package. It was concerned the new structure may create misunderstandings as to how much excise was payable on some petroleum products intended for particular uses, particularly products used otherwise than as fuels. Accordingly, the technical amendments contained in this bill are designed to remove any such uncertainty. The amendments insert new subheadings of `other' in all subitems of item 11, except subitem 11(a) and 11(d), to cover petroleum products used for purposes other than as fuel. These amendments do not widen the intended scope of the fuel substitution minimisation legislation. 110 Caltex submitted that the object of item 11(I), and par (3)(d) in particular, was made clear by the extrinsic material. Only fuels produced for use in internal combustion engines (in other words, road transport fuels) were to be subject to the highest rate of duty. Concessional rates were to apply to other fuels and a "free" rate for non-fuels, on the condition that the marker was added to ensure that any substitution could be traced. Paragraph (d) was included, said Caltex, to clarify that non-fuels, which did not contain the required marker, would attract the higher rate of duty because of their susceptibility to substitution. 111 The Commissioner said that "other" in par (d) means simply what it says --- any "other" refined or partly refined petroleum product falling within item 11(I)(3) but not within either items 11(I)(3)(a), (b) or (c). In effect, this meant that it applies to any product not for use in an internal combustion engine and not containing the marker, regardless of whether or not it was intended for use as a fuel. The Commissioner pointed out that items 11(I)(3)(a), (b) and (c) each applied by reference to the use the relevant product was to be put, whereas par (d) did not. It would have been a straightforward matter, and consistent with the references to "use" elsewhere, for the legislature to expressly limit par (d) to non-fuels, if that is what had been intended. To the contrary, the Commissioner submitted, par (d) was intended to be a catchall item, which applied to products by reference to their nature (in other words, petroleum products which might be capable of substitution) and not any particular use for which they may have been intended. The Commissioner also noted that Caltex's construction would lead to the strange consequence that the absence of the marker from a non-combustion engine fuel would mean there would be no duty payable, but the inclusion of the marker by a manufacturer would bring the fuel within par (b) and render it dutiable. 112 I agree with the Commissioner's construction of par (d). Item 11(I) is divided into three paragraphs of increasing generality. The word "other" is used in a number of places --- see 11(I)(1)(b), 11(I)(2) ("other, in packages not exceeding 210 litres"), 11(I)(3) ("Other") and 11(I)(3)(d). On an ordinary reading of item 11(I), it seems to me that the word "other" as it is used in each case is intended to describe goods that come within the general item description ("other refined or partly refined petroleum products ..."), other than those that fall within any of the preceding, more specific, paragraphs. In other words, products that do not come within item 11(I)(1) ("recycled petroleum products not elsewhere specified") or 11(I)(2) ("Other, in packages not exceeding 210 litres"), would therefore fall to item 11(I)(3) ("Other"). Similarly, par (d) of item 11(I)(3) seems plainly to apply to any product within item 11(I)(3) that is not covered by pars (a), (b) or (c). A similar construction of the word "other" as it appears in the Customs Tariff Act 1982 (Cth) was adopted in Rheem Australia Ltd v Collector of Customs (NSW) (1988) 78 ALR 285 at 300 (Burchett J). Assuming they are "refined" products, the description just given is applicable to each of the residual oils. 113 Without more, it is difficult to read par (d) in the manner contended for by Caltex. Beyond reference to the extrinsic material, no explanation was offered as to why Parliament would not have clearly identified in the drafting that par (d) was to be limited to non-fuel uses. If "other" means anything, it means other than (a), (b) or (c). Between them, (a), (b) and (c) cover all possible uses. Putting to one side combustion engine fuel (dealt with by (a)), the only remaining discriminant between (b) and (c) on the one hand and (d) on the other is the inclusion of the marker. In my view this accords with precisely what Parliament had in mind when it introduced par (d). It appears from the passages in the extrinsic material quoted above that the marker was to be the "cornerstone" of the regime introduced in 1998. It was given a critical function, in that concessional status, or "free" status for non-fuels, would only apply to products if they contained the marker. This is made clear from the discussion of the proposed item 11(I) in the explanatory memorandum to the 1997 Bill. Products for use otherwise than as fuels and containing the prescribed proportion of marker are dutiable at the rate of "Free". Products for use as a fuel otherwise than in an internal combustion [engine] and containing the prescribed proportion of marker are dutiable at a concessional rate. Products containing no marker and, generally, which are for use in an internal combustion engine are dutiable at the highest rates. 116 It was thus a critical feature of the legislation that unmarked recycled products would attract the highest rate of duty, whether or not intended for a fuel or non-fuel use, because there was the potential for substitution. Plainly, the "other" in item 11(I)(1)(b)(ii) covered both fuel and non fuel uses. Consistently, it seems to me, the word "other" was used in the 1998 Act as a catchall item, applying to products that did not contain the prescribed marker. 117 It is true that both the explanatory memorandum and second reading speech for the 1998 Bill stated that the new subheadings would "cover petroleum products for use otherwise than as fuels". However I do not read those statements as intending to limit the operation of the subheadings to those circumstances. (Emphasis added. While the [fuel substitution legislation] conceptually requires the marker to be added to all concessional and duty-free petroleum, in reality the use of the marker has been severely restricted because of technical issues. In certain cases, such as the use of fuels in burner applications, there is no technical reason to preclude marking. However, it soon became apparent that there are significant uses of petroleum-based products other than as a fuel, such as certain solvents, paint manufacture, agricultural processing and metallurgical applications, where unmarked product is required. An administrative scheme was then introduced under which such product could be obtained effectively duty free and unmarked, through regulations that allow remission or refund of duty in certain circumstances. Remission of duty is a relinquishment of the duty payment obligation of the manufacturer under defined circumstances, thus allowing the manufacturer to pass on the duty-free treatment to a purchaser (normally the user) of the product. 119 The "administrative scheme" referred to is effected by the Excise Regulations 1925 (Cth), which prescribe specific circumstances in which remissions, rebates or refunds of excise duty will be allowed. In the form it took during the relevant period, the Regulations included among the prescribed circumstances those where it can be demonstrated that a petroleum product, which is otherwise subject to duty under a relevant tariff in item 11, has a use approved by the Commissioner not being a fuel use (see, for example, reg 50(1)(zt)). This further explains why item 11(I)(3)(d), and each of the other subheadings introduced by the 1998 Act, imposed the highest rate of duty, as was generally applicable to combustion engine fuel. In my view, the relevant legislative intention was to catch any remaining refined or partly refined petroleum products not specifically dealt with and impose the highest rate of duty, unless the marker was used or the product was specifically approved for some non-fuel purpose by the Commissioner. 120 Finally, as the Commissioner submitted, limiting the scope of item 11(I)(3)(d) to non-fuels would lead to the strange result that a manufacturer could avoid duty entirely on a non-combustion engine fuel by not using the marker --- in that circumstance, the product would not fall within any of pars (a) to (d). It is noteworthy that this would also have been the case prior to the 1998 Act, as item 11(I)(3) only included pars (a), (b) and (c), as first introduced by the 1997 Act. However it seems to me that that deficiency was part of what the "technical" amendments in the 1998 Act sought to address. In other words, the reference in the explanatory memorandum to the amendments being necessary to "eliminate any potential misunderstandings, or any unintended windfall gains" seems to me to be at least in part a reference to the potential for duty to be avoided in the circumstances of the Commissioner's example. 121 During its closing submissions on the final day of the hearing, Caltex advanced a further reason why it said item 11(I) was inapplicable to the residual oils. Without the comma, the qualification applies only to the word "diesel". As the residual oils are produced by a refining process, Caltex contended that the item simply does not apply to them. 123 Caltex referred extensively to the amendments made to item 11 after 1997, in particular those made by the Excise Tariff Amendment Act (No. 1) 2000 (Cth) (the 2000 Act) and the Excise Tariff Amendment (Product Stewardship for Waste Oil) Act 2000 (Cth) (the Stewardship Act). The 2000 Act introduced an amended form of item 11 to, among other things, remove certain categories of fuel that were being used to evade excise duty (in particular, gasoline and diesel for use otherwise than as fuel) and clarify the way in which certain recycled petroleum products were to be treated: see the explanatory memorandum to the Excise Tariff Amendment Act (No. 1) 2000 Bill at [2.4]. This, Caltex said, demonstrated that item 11(I) was only intended to apply to products "recovered by a process not being a process of refining", which it effectively equated to "recycled products". 125 The Stewardship Act made further changes to item 11 to accommodate changes in the treatment of oils, in particular lubricating oils. Such oils had previously been subject to wholesale sales tax. Following the introduction of the GST, wholesale sales tax was removed and the Stewardship Act provided for an excise levy on lubricating oils, accompanied by a regime to use the funds raised as a subsidy for companies that adopted environmentally appropriate methods of recycling waste oil. The Stewardship Act introduced a new item 15 specifically dedicated to, among other things, "petroleum based oils ... and their synthetic equivalents" other than those to be used as a fuel. 126 This amendment, Caltex submitted, resulted in the accidental omission of the comma after the word "diesel". The removal of the comma here was said to change the whole meaning of the item, because it limited the "recycling" qualification (i.e. the phrase "recovered by a process other than a refining process") to diesel only. As there was no explanation for such a change in the explanatory material, Caltex said it must have been a drafting error. 127 At first blush it appears possible that the removal of the comma by the Stewardship Act was a mistake. However on close inspection it is evident that reinserting the comma would both distort the ordinary meaning of the sentence and introduce significant grammatical difficulties. First, the presence of the comma would mean that the introductory words "Other refined or partly refined petroleum products ..." would become qualified by the phrase "recovered by a process not being a process of refining" (emphasis added). However the qualification would be contradictory and would deprive the adjectives 'refined' or 'partly refined' of any real meaning. It is not clear to me how the item would apply to a petroleum product that is "refined" or "partly refined" but which is "recovered from a process that is not a process of refining". Caltex suggested that the qualifying phrase was a reference to "recycled products". However that construction would deprive items 11(I)(2) and (3) of any meaning or operation. Item 11(I)(1) provides the relevant tariff rates for "recycled petroleum products not elsewhere specified". If item 11(I) were limited to recycled products, item 11(I)(1) would then cover all possible products falling therein, leaving pars (2) and (3) with no application at all. 128 Second, the comma would corrupt the plain and ordinary meaning intended for the concluding phrase of item 11(I) --- "and product classified to item 15 of the Schedule". As enacted (without the putative comma), it is clear that the sentence is intended to exclude two classes of product from the description "Other refined or partly refined petroleum products": (1) "diesel recovered by a process not being a process of refining", and (2) "product classified to item 15 of the Schedule". That much is apparent from the way in which the intended inclusions are contained in parentheses and the exclusions follow the words "other than ...". However Caltex's construction would mean that "product classified to item 15 ..." would be specifically included within the item rather than excluded. This would leave "diesel" as the only exclusion, without the qualification "recovered by a process not being a process of refining". It is plain to me that the legislative intention was to exclude "product classified to item 15 ..." because those products were to be dealt with under a separate item with entirely different rates of duty. The only logical reason to refer to those products in item 11(I) was because they were dealt with elsewhere and required exclusion from the catchall description "Other refined or partly refined petroleum products". Specifically including the subject matter of a separate item within the operation of a different item would not have made sense and would have confounded the application of the Schedule. Further, the exclusion of "products classified to item 15 ..." from item 11(I) is consistent with other amendments made by the Stewardship Act. 129 Third, as conveyed by the ordinary reading of item 11(I) (without the putative comma), it is consistent with item 11(C) that the qualification "recovered by a process not being a process of refining" applies only to "diesel". 130 For those reasons alone, I do not accept Caltex's contention that a comma should be (re)introduced into item 11(I). This is not a case where there appears to have been a clear drafting mistake such that, if left uncorrected, the ordinary grammatical meaning of the sentence would lead to an absurdity: see Grey v Pearson [1857] EngR 335 ; (1857) 10 ER 1216 at 1234 (Lord Wensleydale); Broken Hill South Ltd v Commissioner of Taxation (NSW) [1937] HCA 4 ; (1937) 56 CLR 337 at 371 (Dixon J); see also Pearce & Geddes, Statutory Interpretation in Australia (6 th ed, LexisNexis, 2006) at [2.4] and [2.24]. To the contrary, the sentence makes sense as enacted and the putative comma would serve only to obscure and distort the plain meaning. 131 In reaching this conclusion, I have also considered each of the legislative amendments and the extrinsic material referred to by both parties. It is unnecessary for me to analyse each amendment in detail. However I note that the history supports the position that the comma was intended to have been removed by the Stewardship Act. (b) The 2000 Act dealt with, among other things, the treatment of recycled products. Diesel recovered by a process not being a process of refining was at the same time excluded. (d) other petroleum products other than products classified to item 15 of the Schedule. (f) That change necessitated consequential amendments to item 11(I). Consistently with the removal of the phrase "lubricants ... and fuel recovered by a recycling process" from item 11(d) (which were now generally to be dealt with by the new item 15), the phrase "lubricants ... and fuel, other than diesel, recovered by a process not being a process of refining" was removed from item 11(I). ISSUE 4 --- WERE THE RESIDUAL OILS "DELIVERED FOR HOME CONSUMPTION" BY CALTEX? 133 I deal with the s 60 point below at [149]-[171]. Caltex "delivered" the residual oils for home consumption when it dedicated them, as articles of commerce, to consumption as a refinery fuel at its premises. Accordingly, excise duty was payable in respect of those products at the rate in force at the time they were delivered (see s 59) , which duty remains unpaid. 134 On that basis, Caltex's liability for excise duty depends on whether it can be said Caltex "delivered" the residual oils for or into home consumption, as that concept appears in the Excise Act (particularly ss 59 and 61C). 135 Caltex submitted that the residual oils were at no time "delivered" for home consumption because the concept of delivery in the Excise Act signifies a transfer of actual or constructive possession from one person to another. In this case, it said, there was no such transfer because it used the residual oils itself at its own premises. Caltex relied on a passage from O'Connor J's judgment in R v Lyon [1906] HCA 17 ; (1906) 3 CLR 770 ( Lyon ), where his Honour in the context of the customs legislation dealt with the provision for customs control over goods "until delivery for home consumption or exportation" (which provision is mirrored in s 61 of the Excise Act ). 136 According to Caltex, goods such as the residual oils which never leave its premises cannot be said to "go ... into circulation" and cannot therefore have been "delivered" for home consumption. 137 As an extension of this argument, Caltex said that s 61 --- which renders excisable goods subject to the Commissioner's control "until delivered for home consumption or exportation" --- demonstrates that "delivery" occurs only upon an entry pursuant to s 58 or a "deemed delivery", as it put it, pursuant to s 61C. It referred to the fact that s 61 contains penalty provisions which prohibit interference with goods that are subject to control, and said that delivery for home consumption, which brings that control to an end, can only occur in a manner provided for by the Excise Act . Without such entry, or authorisation, they could not have been "delivered" for home consumption and, accordingly, by force of s 61(1) they remained subject to Customs control. 138 As the final step in its argument, Caltex submitted that s 61C (there here being no "entry" of the residual oils) makes it clear that excisable goods can only be delivered for home consumption upon being removed from the manufacturer's relevant premises. This was said to be because s 61C permits a manufacturer to "deliver for home consumption from a place specified in the permission" (emphasis added). It dedicated them for its own use as refinery fuel at the relevant premises. Its dedication of the oils for that use is plain on the evidence, which demonstrates that Caltex maintained and consumed the oils for that purpose. (b) The expression "delivered for home consumption" (ss 61 and 61C) is broad and should not be read down as applying only to delivery of goods between individuals or between places. Nor should "home consumption" be limited by reference to the identity of the actual consumer (i.e. whether the consumer is a third party or the manufacturer him or herself). (c) The concept of delivery for home consumption is critical to s 61(1) because it determines the period of the Commissioner's control over excisable goods. In s 61(1), the concept exists to distinguish between two places for consumption --- Australia (home) or overseas (export). The use of the preposition "for" in the phrases "delivered for home consumption" and "delivered for exportation", demonstrate the section is concerned more broadly with the place of consumption rather than the transfer of possession between parties. (d) The phrase "go into circulation" used by O'Connor J in Lyon [1906] HCA 17 ; 3 CLR 770 was intended to explain the concept of home consumption not delivered for home consumption. That much is clear from the context in which his Honour used the phrase, being an explanation of the customs authorities' control over goods as a form of security until payment of the required duty. Here, Caltex's premises are in Australia and consumption of the residual oils within those premises is sufficient for the oils to "go into circulation". (e) The residual oils were delivered for home consumption in a manner provided for by the Excise Act . They were delivered pursuant to Caltex's permissions under s 61C and that delivery gave rise to a deemed entry for home consumption: see s 61C(2). Accordingly, Caltex was required as a condition of its permission to include the residual oils in its weekly return and pay the corresponding duty. 140 I agree with the Commissioner that Caltex delivered the residual oils for home consumption for the purposes of the Excise Act . The Excise Act does not refer to delivery to a person but adopts the more ample language of delivery for or into home consumption. While I accept that the typical case of delivery will involve the movement of excisable goods from one person or place to another, the language of the Excise Act is sufficiently broad in my view to apply to the less typical case of consumption by a manufacturer at its own premises. The contention that the Excise Act necessarily requires the physical removal of goods from one place to another seems to me to give the concept of delivery for home consumption a restricted meaning not warranted either by the breadth of the language used or the evident purpose of the legislation, namely to tax manufactured goods consumed in Australia. In my view the use of the words "for" and "into" demonstrates a focus by the Excise Act on the status of excisable goods (that is, their readiness for consumption) rather than whether they have necessarily been transferred between people or places. 141 Another way of considering this is by reference to s 61. Section 61 renders all excisable goods "subject to [the Commissioner's] control until delivered for home consumption or for exportation to a place outside Australia, whichever occurs first". The control residing with the Commissioner is of broad scope and is critical for the protection of the Commonwealth's excise revenue: see Lyon [1906] HCA 17 ; 3 CLR 770 and Collector of Customs (New South Wales) v Southern Shipping Co Ltd [1962] HCA 20 ; (1962) 107 CLR 279 ( Southern Shipping ). The section contemplates that excisable goods will be delivered for either home consumption or exportation. In my view the section evinces a legislative intention to cover the field in respect of all forms of internal (home) consumption and all exports. Historically, excise duties have been understood as running together with and supplementary to the customs duties traditionally imposed on certain goods. In the taxation of such articles of luxury, as spirits, beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles and a corresponding or reduced duty on similar articles produced or manufactured in the country; and this is the sense in which excise duties have been understood in the Australian colonies, and in which the expression was intended to be used in the Constitution of the Commonwealth. 142 In my view it is unlikely that the concept of "home consumption" in the Excise Act would be intended not to apply to a small class of internal consumers simply because they consume their own manufactured goods. Once it is accepted that consumption in that manner is an instance of home consumption, if follows in my view that goods may be "delivered" for that purpose. 143 Contrary to Caltex's submissions, I do not accept that the reference in Lyon [1906] HCA 17 ; 3 CLR 770 to goods going into circulation necessitates a more restricted construction of "delivered for home consumption". Justice O'Connor's reference to going into circulation was used to explain how effective security over goods is lost once they have entered home consumption. His Honour was not there describing the concept of delivery nor, more importantly, intending to limit its scope. He was drawing attention to the policy of the customs legislation and the importance of the customs authorities' having a form of security over imported goods to ensure the payment of duty. I agree with the Commissioner that Caltex's dedication of the residual oils for consumption by it at its premises is sufficient, in the sense O'Connor J had in mind, for the oils to "go into circulation". 144 Similarly I reject Caltex's submission that the words "from a place" in s 61C mean that excisable goods must be removed from that place before they can be considered "delivered" for home consumption. Again, while Caltex's construction accords with what will occur in the typical case, the section is not limited to that situation. The section also accommodates and is consistent with a delivery for home consumption constituted by a use of the relevant goods at that place. Furthermore, the reference to a place in s 61C seems to me to be more concerned with the manner in which the Commissioner's control can be effectively exercised. Section 61C follows ss 61 , 61A and 61B , each of which concern itself with the Commissioner's control and the granting of permissions. In the case of s 61C , it seems to me that it is a necessary or at least convenient measure in permitting deliveries into home consumption without formal entries, that such activity is authorised only in respect of certain specified premises at which the Commissioner's control and supervision can be effectively exercised. 145 For these reasons, I consider that Caltex delivered the residual oils for home consumption pursuant to its s 61C permissions. Accordingly, if I am wrong on the "refined" point, then Caltex was obliged to account for the residual oils in its weekly returns and is liable to pay the requisite duty on them. 146 One further argument in respect of the "delivery" point was advanced by Caltex. It submitted that the Commissioner had effectively conceded that the residual oils had not been "delivered" because the Commissioner requested from it an accounting for the goods pursuant to s 60 of the Excise Act . As Caltex put it, since s 60 applies only to goods "which are subject to [the Commissioner's] control" --- which control ceases upon delivery for home consumption --- then the Commissioner's request was an acknowledgment that the residual oils were still subject to its control and had not therefore been delivered. 147 This however is to misconstrue the section and its intended operation. Liability under s 60 is "collateral and not substitutional" for the liability to pay excise duty that may be incurred under other provisions of the Excise Act : see Southern Shipping 107 CLR at 288 (Dixon CJ); see also s 60(4) of the Excise Act . Section 60 is an alternative recovery mechanism open to the Commissioner in appropriate cases where the circumstances set out therein are met. Subject to what I say below (at [158]-[162]), it was open to the Commissioner to rely on s 60 in making the request, regardless of whether he also maintained an alternative position that Caltex was liable for excise duty having delivered the residual oils for home consumption. 148 While I was not taken to the parties' correspondence on this point in detail, I note that the Commissioner both prior to (in its Advice) and after making the request (in its objection decision) maintained a claim that Caltex had delivered the residual oils for home consumption for the purposes of s 61C. In those circumstances, I do not consider that the request amounted to any form of concession that the Commissioner accepted that the residual oils had not been delivered. In any event, a proper construction of s 60 in my view would permit the Commissioner to rely on s 60 even where the relevant excisable goods have been "delivered for home consumption", where such delivery is not accompanied by the payment of duty. For reasons I shall explain below in dealing with the s 60 point, I consider that s 60 is capable of application to excisable goods that (1) have been subject to the Commissioner's control but (2) have not been kept safely by virtue of their delivery into home consumption without the payment of duty. ISSUE 5 --- IS THE COMMISSIONER'S DEMAND UNDER S 60 VALID? The Commissioner relied on both ss 60(1)(a) and (b) in the demand. The Collector's Determination under subsection 60(1) and Statement of Reasons are annexed to this Statutory Demand. (b) Section 60 applies only to excisable goods that are "subject to the [Commissioner's] control". If as the Commissioner contended the residual oils were delivered for home consumption, then they were thereupon no longer subject to the Commissioner's control and s 60 does not apply. (c) Caltex did not "fail to keep [the residual oils] safely". The safety with which s 60(1)(a) is concerned is that the goods do not find their way into home consumption without the payment of duty. It is not directed at the protection of goods from damage or destruction (relying on Southern Shipping 107 CLR at 296 (Taylor J) and 299 (Menzies J)). As the residual oils were "destroyed" by Caltex and did not --- and were never intended to --- find their way into home consumption, there was no failure to keep them safely for the purposes of s 60(1)(a). (d) The Commissioner was not entitled to make a request pursuant to s 60(1)(b) nor to rely on that paragraph in the demand as a basis for liability. Section 60(1)(b) may only be invoked when there is doubt about the whereabouts of goods or doubt as to whether they have been kept safely (relying on Sidebottom v Giuliano [2000] FCA 607 ; (2000) 98 FCR 579 ( Sidebottom )). There was no doubt as to whether Caltex had failed to keep the residual oils safely. The Commissioner was aware that the residual oils had been burnt at Caltex's refineries. In particular, he acknowledged that the residual oils had been "used to generate energy within Caltex's refineries" in the purported request he made under s 60(1)(b). (e) Even if the Commissioner was entitled to make the s 60(1)(b) request, Caltex properly accounted for the residual oils by explaining that they had been used to generate heat, which thereby demonstrated they had not gone into home consumption. (f) The demand is invalid because it claimed payment of a "debt". Liability under s 60(1) only arises upon the due making of a valid demand. Accordingly Caltex could not have owed the amount demanded prior to the making of the demand and its description as a debt renders the demand invalid. 153 As to (a), I have already held that the residual oils are not "excisable goods" and on that basis alone the demand must be set aside. However, in case I am wrong I will consider the remaining grounds. 154 In relation to (b), Caltex's submission has the effect that s 60 could only operate where excisable goods have not in fact been delivered for home consumption. The Commissioner submitted that s 60 applies whether or not goods have been delivered for home consumption. He emphasised that the purpose of the Commissioner's control over excisable goods is to ensure that duty is properly paid (relying on Lyon [1906] HCA 17 ; 3 CLR 770 and Southern Shipping [1962] HCA 20 ; 107 CLR 279) and the obligations imposed by s 60 are designed to ensure that the goods do not find their way into home consumption without proper payment (relying on Sidebottom [2000] FCA 607 ; 98 FCR 579). More particularly the Commissioner said that s 60 is aimed directly at the unauthorised relinquishment of possession, which would include delivering goods for home consumption in a manner that was not authorised, principally where there is no payment of duty. 155 It is clear that the Commissioner's control over excisable goods ceases upon the goods being delivered for home consumption (see s 61). In this case the residual oils were subject to control from the time of their manufacture or production up until they were delivered for home consumption. If I am correct in finding that they were delivered, then the Commissioner's control ceased at the time they were delivered (i.e. when dedicated as refinery fuel oil). However it is not correct to say that s 60 has no application in respect of goods over which the Commissioner's control has come to an end. The section applies where (1) a person has or has had possession of excisable goods, (2) the goods are subject to the Commissioner's control (i.e. have not been delivered) and (3) there is a failure to keep them safely or a failure to account for them. It seems to me that the requirement (2) for the goods to be subject to control is concerned with and referable to the period during which they are in the possession of the relevant person rather than the time at which the Commissioner relies on the section. The very thing the section is concerned with is the loss of goods (for example, their disappearance without adequate explanation) or the movement of goods into home consumption while subject to control and without the payment of duty. Section 60 it seems to me has no less an application to excisable goods that have ceased to be subject to control, where the cessation of that control is a result of the manufacturer delivering the goods into home consumption in an unauthorised manner. 156 Alternatively, if the residual oils were not delivered for home consumption, then they were at all relevant times subject to the Commissioner's control and Caltex's submission at (b) becomes irrelevant. 157 In relation to the failure to keep safely point at (c), the Commissioner relied on the decision of Finkelstein J in Sidebottom [2000] FCA 607 ; 98 FCR 579 and his Honour's discussion of the purposes of s 60 as explained by the High Court in Southern Shipping [1962] HCA 20 ; 107 CLR 279. What is clear from each of those cases is that s 60 imposes an essentially absolute duty to keep goods safely and to ensure they do not find their way into home consumption without the payment of duty. Where that does occur, the goods will have found their way into home consumption "irregularly", that is, in a manner not authorised by the Excise Act , and s 60 will apply in order that the revenue might be protected. The Commissioner said that the residual oils found their way into home consumption irregularly when Caltex consumed them without duty having been paid. I agree. As I said earlier, Caltex's consumption of the residual oils at its refineries amounted to "home consumption". It follows that Caltex's dedication of the residual oils as refinery fuel oil, without paying excise duty, and subsequent consumption of them by burning them, means that they found their way into home consumption irregularly. Caltex's consumption of the residual oils in this manner (by burning and thus using them up or "destroying" them) was therefore a failure to keep them safely within s 60(1)(a). As Dixon CJ said in Southern Shipping 107 CLR at 287, the safe keeping comprehended by s 60(1)(a) is the keeping safe from loss or destruction, because "the provision is pointed at the loss of goods involving the loss of excise duty". Caltex relied on the judgments of Taylor J (at 296) and Menzies J (at 299) in Southern Shipping [1962] HCA 20 ; 107 CLR 279 and their Honours' references to damage or destruction. However, their observations were directed not to a case such as the present (where the "destruction" is the consumption of the residual oils as a fuel) but to a rejection of the proposition that the section imposes a duty of care not to permit goods to be damaged or destroyed. 158 I now turn to Caltex's submission at (d). The Commissioner acknowledged that it was entitled to request an account only where the safety of the relevant goods is something less than an "undoubted" fact: see Southern Shipping 107 CLR at 305 (Owen J); Sidebottom [2000] FCA 607 ; 98 FCR 579 at [14] (Finkelstein J). Conversely, if the position with respect to the residual oils was something less than an undoubted fact, it was open to the Commissioner to invoke s 60(1)(b). 160 It seems to me that it was common ground from the outset that Caltex had consumed all of the residual oils and that no duty had been paid in respect of them. The premise of the Commissioner's conclusion in the Advice that the residual oils had been delivered for home consumption and had not been accounted for (the latter of which, curiously, was not based on any request to account at that stage), was that the residual oils had been burnt by Caltex as a fuel oil. Moreover, in the Commissioner's request under s 60(1)(b) itself, he acknowledged that the residual oils had already been burnt. The only thing that could possibly have remained in any doubt was whether Caltex had paid duty, but that was not the case. The Commissioner had already stated in the Advice that "the [residual oil] that you are manufacturing is no longer present within the licensed premises and duty has not been paid". 161 In my view there was no doubt about the whereabouts of the residual oils or whether they had been, at least on the Commissioner's construction of s 60(1)(a) , kept safely. This is not a case where the location of the goods (and therefore whether they had gone into home consumption) was unknown (cf. Moama [2001] FCA 1287 ; 115 FCR 205) , or a case where the Commissioner only had "evidence which might lead him to form the opinion that excisable goods were not kept safely" (see Sidebottom [2000] FCA 607 ; 98 FCR 579 at [16] ). The facts here were clear --- the residual oils had been consumed by Caltex at its premises without the payment of any duty. 162 Accordingly I do not consider that the Commissioner was entitled to make the request pursuant to s 60(1)(b): see Sidebottom [2000] FCA 607 ; 98 FCR 579 at [14] . 163 If I am wrong in that conclusion, I would reject Caltex's submission at (e) above that it had accounted for the residual oils. Its statement that residual oils were used as fuel in generating the required heat for the refineries was an accounting for their consumption, not an accounting "for the goods". It did not demonstrate that the residual oils had been dealt with in a manner authorised by the Excise Act or that, despite an unauthorised relinquishment of possession, the goods had not got into home consumption without duty being paid, or that despite a failure to keep them safely, the Commissioner's control was still effective over the residual oils: see Southern Shipping 107 CLR at 299 (Menzies J). The purported account simply recited the facts, which showed that the residual oils had not been kept safely within the meaning of s 60(1)(a). It was therefore reasonable for the Commissioner not to be satisfied that the goods had been accounted for. 164 As I have found the Commissioner was not entitled to make a request under s 60(1)(b) , a question is raised as to the effect of this on the Commissioner's demand. In the demand, the Commissioner relied on Caltex's failure to keep the goods safely "and/or" its failure to account upon request. For the reasons I have given, it was not open to the Commissioner to rely on a failure to account under s 60(1)(b) to support the demand. Neither party made any submissions as to where this left the demand. 165 A similar situation arose in Moama [2001] FCA 1287 ; 115 FCR 205. The Commissioner in that case issued a demand on the basis of s 60(1)(b) only, but sought at the hearing, as an alternative, to validate the demand in reliance on s 60(1)(a). After referring to Revlon Manufacturing Limited v Commissioner of Taxation (1995) 63 FCR 535 and Federal Commissioner of Taxation v Wade [1951] HCA 66 ; (1951) 84 CLR 105 , Ryan J found that the demand could be justified on the basis of s 60(1)(a) , even if s 60(1)(b) had not been available. It arose, as Wilcox J said in Revlon out of the operation of the Act itself. There was, accordingly, no scope for Moama to be under any misapprehension as to the basis upon which it was asked to pay duty on the subject fuel. 166 I agree with Ryan J's analysis of s 60(1). This is not a case where the Commissioner would seek to justify a demand by reference to some different, previously unraised, provision (cf. Danmark Pty Ltd v Commissioner of Taxation (Cth) (1944) 7 ATD 333 ; Magna Stic Magnetic Signs Pty Ltd v Commissioner of Taxation (Cth) (1989) 20 ATR 1237). This is a case where the Commissioner has relied, albeit erroneously in part, on two grounds under the same provision. The taxpayer was not under any misapprehension as to the alleged basis for its liability and in my view the demand was valid to the extent that it relied on s 60(1)(a) as a basis for Caltex's liability. 167 Finally, as to Caltex's submission at (f), I do not consider that the demand was invalid because it claimed payment of a "debt". The reference by the Commissioner to a "debt" was not a reference to an antecedently existing obligation. It was a clear reference to the obligation on Caltex under s 60(1) to pay "an amount equal to the amount of the Excise duty which would have been payable on [the residual oils] if they had been entered for home consumption" on the day of the demand. The "demand" consists of the formal demand itself, a schedule, a determination, a statement of reasons and an "Attachment A", which sets out Caltex's options and time limits. When read as a whole these documents make it abundantly clear that Caltex's liability under the demand is that arising under s 60(1) of the Excise Act . (Emphasis added. 169 Further, s 60(2) provides that "[a]n amount payable under subsection (1) ... shall be a debt due to the Commonwealth and may be sued for and recovered in a court of competent jurisdiction ...". There is nothing in ss 60(1) or (2) that prevents the making of a demand itself giving rise to a debt. The subsections do not comprehend two steps --- the making of a demand followed by the crystallisation of a debt. The proper reading of the subsections is that the making of the demand gives rise to a debt uno flatu . On that basis the description of the amount owed as a "debt" at the time the debt arises does not assert an obligation existing before the demand. 170 In any event, even if there is a choice to be made between a construction that gives effect to the demand and one which renders it invalid, I consider that the former should be chosen. Where two constructions of an instrument are equally plausible, upon one of which the instrument is valid, and upon another of which it is invalid, the court should lean towards that construction which validates the instrument: see Langston v Langston [1834] EngR 190 ; (1834) 2 Cl & Fin 194 ; 6 ER 1128 at 1147; In Re Solomon; Solomon v Solomon [1946] VLR 115 at 120-121; Multiplex Constructions (UK) Limited v Honeywell Control Systems Limited (No. 2) [2007] EWHC 447 at [57]. 171 Further, it seems to me doubtful that invalidity would necessarily follow if Caltex's construction of the demand were adopted. By analogy with the approach taken in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355 at [93] , I would ask whether it was a purpose of s 60(1) that to wrongly describe "an amount equal to the amount of the Excise duty which would have been payable ..." as a debt, when it is quite clear what is being demanded and why, should result in invalidity. Caltex did not advance any argument as to why such an error should result in invalidity, whether on a Project Blue Sky approach or otherwise. Accordingly the Commissioner's objection decision the subject of the tax appeal must be set aside, together with the demand made by the Commissioner pursuant to s 60(1) of the Excise Act . The Commissioner should pay Caltex's costs of the tax appeal. 173 The s 39B proceeding is in substance dealt with by the result of the tax appeal. But for the agreement referred to at [44] it would have been necessary to fashion orders dealing with the numerous declarations contained in the application. The applicant would have obtained ten of the declarations. The Commissioner would have successfully resisted five other declarations. In the circumstances, the appropriate order is that the proceeding be dismissed and the applicant recover 66 per cent of its costs. I certify that the preceding one hundred and seventy-three (173) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | duties of excise refining of crude oil initial separation of valuable products residual oils left after separation some residual oils exported some burned to heat refinery whether residuals "manufactured" or "produced" whether refined or semi-refined liquid petroleum products whether delivered for home consumption whether refiner failed to keep residuals safely or failed to account for them validity of commissioner's demand that refiner pay amount equal to the excise duty that would have been payable had residuals been entered for home consumption. taxation |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Citizenship to refuse to grant a protection visa to the appellant. On 5 February 2007 the appellant lodged an application for a protection visa with the Department of Immigration and Citizenship. A delegate of the first respondent refused the application for a protection visa on 24 February 2007. On 29 March 2007 the appellant applied to the Tribunal for a review of that decision. 3 Before the Tribunal, the appellant claimed that she was a member of the Thai Yai ethnic group in Thailand. The appellant claimed that people in her village caused problems for her family by reporting to the police that her father was a drug dealer and that she had no Thai identification. The appellant claimed that she had to report to the police station to prove that she was a legal resident of Thailand, and that her family went to jail a number of times because of the people that hated them. The appellant claimed that in April 2006, two men broke into her family's home and abducted and raped both her mother and herself. She claimed that her father had to pay 50,000 baht for their release. In September 2006 the appellant's father had a fight with the men and was killed. The appellant's family reported the incidents of robbery, rape and murder to the police. The police told them not to tell anyone as they might be killed for telling the police. The appellant believed that the police were corrupt and only looked after rich people or the 'mafia', and feared that she would be killed if she returned to Thailand. The appellant failed to attend this hearing, but wrote to the Tribunal on 30 May 2007 stating that, due to illness, she had been unable to attend the hearing on 9 May 2007. She did not submit any medical evidence to substantiate her claim. The Tribunal did not accept that the appellant's letter, sent some three weeks after the scheduled hearing date and containing no medical evidence, established that the appellant was unable to appear before it on 9 May 2007. In these circumstances, and pursuant to s 426A of the Migration Act 1958 (Cth) ('the Act'), the Tribunal proceeded to make a decision on the review without taking any further action to enable the appellant to appear before it. The Tribunal invited the applicant to give oral evidence and present arguments at a hearing on 9 May 2007. On 27 April 2007 the Tribunal received a completed Response to Hearing Invitation form from the applicant advising the Tribunal that she wanted to give oral evidence. However the applicant did not attend the hearing. On 29 May 2007 the applicant contacted the Tribunal to enquire about the status of her application. She was advised that the Tribunal was proceeding to make a decision on the review as she did not attend the hearing. She was also advised that she should provide, in writing and as soon as possible, any further information she wished the Tribunal to consider, including any explanation of why she did not attend the hearing. On 30 May 2007 the applicant wrote to the Tribunal stating that she had been unable to attend the hearing on 9 May 2007 because she was sick. The applicant did not submit any medical evidence to substantiate her claim with the letter. The Tribunal does not accept that the applicant's letter, sent some 3 weeks after the scheduled hearing date and containing no medical evidence, establishes that the applicant was not able to appear before the Tribunal on 9 May 2007. In these circumstances, and pursuant to s 426A of the Act, the Tribunal has decided to make its decision on the review without taking any further action to enable the applicant to appear before it. 7 The Tribunal, therefore, did not accept that there was a real chance of the appellant being persecuted for a Convention reason in Thailand in the reasonably foreseeable future. 9 The Federal Magistrate, in considering the Tribunal's decision in light of the claims made by the appellant, dismissed the application. His Honour found that the Tribunal's decision record revealed that the particular social or ethnic group to which the appellant claimed she belonged, and the related persecution alleged by the appellant, were both identified by the Tribunal. The Tribunal was under no obligation to make findings of fact: Minister for Immigration and Multicultural and Indigenous Affairs v VSAF of 2003 [2005] FCAFC 73 at [16] . Consequently, the fact that the Tribunal did not make findings on the matters asserted by the appellant to be important did not amount to jurisdictional error. Further, whether or not the Thai Yai are persecuted in the fashion asserted by the appellant was irrelevant unless the Tribunal had accepted the applicant's personal claims to fear persecution, and to fear that persecution by reason of her Thai Yai ethnicity. 10 His Honour accepted that the appellant had been too unwell to attend the Tribunal hearing. However, his Honour found that this did not amount to a breach of s 425 of the Act. The court said that s 425 imposed an objective requirement on the Tribunal to provide a "real and meaningful" invitation whether or not the Tribunal was aware of the actual circumstances which would defeat that obligation. However, in SCAR, the s 425 invitation had been issued in the period prior to the commencement of s 422B and its codification of the natural justice hearing rule for proceedings before the Tribunal. In relation to s 422B , and its equivalent provisions in other parts of the Act, the Full Court of the Federal Court said in Minister for Immigration & Multicultural & Indigenous Affairs v Lat [2006] FCA 61 ; (2006) 151 FCR 214 at 225 [66] , that such provisions have the effect that those sections found in div 4 of pt 7 of the Act provide a comprehensive procedural code containing detailed provisions for procedural fairness which exclude the common law natural justice hearing rule. The application of that reasoning to s 422B was expressly adopted by the same full court bench in SZCIJ v Minister for Immigration & Multicultural Affairs [2006] FCAFC 62. 11 His Honour also distinguished this case from that of Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597. In Bhardwaj , under the former wording of s 360 of the Act (the Migration Review Tribunal equivalent of s 425) , the Tribunal was held to be in jurisdictional error for failing to consider a request for an adjournment because of the applicant's ill health and then proceeding to make its determination on the review application. 12 His Honour further found that while some issues were not raised in the s 425A notice, this did not vitiate that notice or demonstrate jurisdictional error on the part of the Tribunal. To the extent that the appellant submitted that some notification by the Tribunal was required in respect of issues which were not decided adversely to her by the delegate, the appellant misconceived the Tribunal's decision; the Tribunal made no findings on any matters other than the appellant's nationality. Thus, it could not be concluded that anything which the delegate had considered favourably for the appellant was decided differently by the Tribunal as, relevantly, no findings were made by the Tribunal. His Honour found that, in this case, the Tribunal exercised its discretion by not rescheduling the hearing and by proceeding to make its decision. When considering how to exercise its discretion under s 426A , the Tribunal considered the appellant's letter advising the Tribunal of her alleged indisposition, but found it unconvincing. In light of that conclusion, his Honour found that the Tribunal did not accept that the appellant had demonstrated an inability to attend the hearing, and exercised its discretion not to reschedule the hearing. 13 As I have indicated, there was a positive finding by the Federal Magistrate, after hearing evidence, that the appellant was too unwell to attend the Tribunal hearing. The second matter arising in respect of this asserted ground of review turns on the applicant's claim to be too unwell to attend the Tribunal hearing listed for 9 May 2007. Her evidence to the Court was that she had food poisoning which manifested as severe diarrhoea and exhaustion. She said that she was staying at a friend's home but the friend had gone away with her boyfriend leaving the applicant alone and speaking no English. She said that she was unable to make contact with her friend or with another friend and was too ill to leave the flat. The applicant said that she was able to speak to the second friend the next day and asked her to make contact with the Tribunal to advise them that she had been ill and to ask for a postponement of the hearing. The applicant said that it was not easy to make contact with this friend who would not always ring her back promptly and that a couple of weeks after this conversation her friend told her that contact had been made with the Tribunal, although the applicant was not told what her friend had said to the Tribunal. 23. The applicant was cross-examined closely as to how her illness could be so bad as to prevent her from attending a hearing which she conceded was very important and might save her life. She insisted that she was severely incapacitated by the food poisoning and spent the day running between the bedroom and the bathroom and not being able to communicate with anybody because of her lack of English. It should also be noted that the applicant did not provide to the Tribunal or to the Court a medical certificate confirming her illness on the day. However, it should also be observed that her counsel had been unaware until the night before the hearing that her medical condition on the day of the Tribunal hearing was a matter of vital significance in these proceedings. The applicant had not explained this to him even though she had given evidence on the subject at a show cause hearing on 19 November 2007. 17 It is important to appreciate that the appellant's severe incapacitation and illness were, in the circumstances, adequately described by the appellant, whatever the cause or description of the medical condition involved. The Federal Magistrate obviously accepted the symptoms were such that the appellant could not attend the hearing. 18 Assuming there to be an evidentiary onus on the appellant to prove the reason for the non-attendance, I do not accept that this could only be proved before the Federal Magistrate by the provision of medical evidence to the Court. I do not read the comments of Gilmour J in SZLTI v Minister for Immigration and Citizenship [2008] FCA 1274 at [18] and SZMBU v Minister for Immigration and Citizenship [2008] FCA 1290 at [20] as standing for any contrary proposition. 19 In the circumstances of this case at least, where there was severe incapacitation as described by the appellant and accepted by the Federal Magistrate, there was no need for any medical opinion to be tendered as to the cause or description of that incapacitation. The appellant could give evidence as to her symptoms, and as to the causal connection between those symptoms and her inability to attend the scheduled hearing date. The fact that medical evidence was not adduced may impact on the acceptance of the appellant's version of events, but this was considered by the Federal Magistrate as demonstrated by the passages of his Honour's reasons referred to above. I do not accept that the circumstances of an applicant being unfit to attend a hearing will necessarily , in all cases (and in this case), entail a medical judgement or opinion. 20 In my view, the Federal Magistrate was entitled to reach the view that he did, and the finding was made after consideration of the cross-examination of the appellant and should not be disturbed: see generally, Abalos v Australian Postal Commission [1990] HCA 47 ; (1990) 171 CLR 167 at 179; Devries v Australian National Railways Commission [1993] HCA 78 ; (1993) 177 CLR 472 ; Fox v Percy [2003] HCA 22 ; (2003) 214 CLR 118 at [26] . 21 I propose to refuse leave for the first respondent to rely upon the proposed notice of contention dated 31 July 2008. 23 I make the assumption as to the correctness of SCAR [2003] FCAFC 126 ; 128 FCR 553 even though SCAR has not met with universal approval: see, eg, Appellant P119/2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 230 ; NALQ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 121 ; Minister for Immigration and Multicultural Affairs v SZFDE [2006] FCAFC 142 ; (2006) 154 FCR 365 ; SZJZY v Minister for Immigration and Citizenship [2008] FCA 280 ; SZGWN v Minister for Immigration and Citizenship [2008] FCA 238. 24 I assume that any requirement for an invitation be 'real and meaningful' is a necessary precondition to the exercise of the Tribunal's decision making power. If a hearing is not afforded where it should be provided, then the duty to conduct a review is not fulfilled and the decision in such a case is infected by jurisdictional error. This is not simply a matter of procedural fairness at common law. A necessary condition for the decision-making power, mandated by the statute, will not have been satisfied. If this proposition were ever doubted, it is now confirmed by the presence of s 422B , enacted subsequently to most of the other provisions in Div 4. Like the rules of procedural fairness in other contexts, the rights given to an applicant by Div 4 are rights relating to the process by which decisions are made, rather than to the substantive content of those decisions. To say this, however, is not to diminish the importance of those rights. It has long been recognised that a statutory power, the exercise of which may affect adversely a person's interests, is impliedly subject to a requirement that the decision-maker afford procedural fairness to that person. The fact that, in the context of the Tribunal's task of reviewing decisions to refuse protection visas, Parliament has chosen to make the exercise of the Tribunal's substantive powers depend expressly upon the process rights contained in Div 4, and to spell out for that purpose what constitutes procedural fairness, does not diminish the importance of those process rights. Thus, it is recognised that the requirement of an invitation to a hearing, found in s 425(1) , will not be met if what is actually afforded to the applicant is not a hearing at which the applicant is able to give evidence and present arguments relating to the issues arising in relation to the decision under review. See, for instance, Minister for Immigration & Multicultural & Indigenous Affairs v SCAR [2003] FCAFC 126 (2003) 128 FCR 553 at [37] . 27 Therefore, the operative decision of the Tribunal on 31 May 2008 occurred after the appellant was given the opportunity to explain her absence at the original hearing, to provide any further material in support of her application, and after the Tribunal exercised its discretion to proceed despite being aware that the appellant was sick on the original scheduled hearing date. This is clearly not a situation where, on the scheduled hearing day, the Tribunal proceeded to immediately decide the matter without knowing of an appellant's inability to attend, or without providing the appellant the opportunities as outlined above. 28 In my opinion, this is not a situation where the operative decision arose from the failure to give any 'real or meaningful' invitation. Rather, the situation arose after a consideration of the appellant's letter of 30 May 2007 requesting a rescheduling, and the failure of the appellant to provide any basis acceptable to the Tribunal not to proceed to hear and determine the matter pursuant to s 426A of the Act. 29 The circumstances for my consideration are not dissimilar to the circumstances that arose in NALQ [2004] FCAFC 121 and the principles discussed therein (at [35]-[36]). As in that case, the failure to reschedule and hear the matter after giving the appellant the opportunity to provide material to the Tribunal, arose from the appellant's failure to provide sufficient information to the Tribunal to explain her inability to attend on the original hearing date. As I have indicated, the appellant was advised on 29 May 2007 (after the original scheduled hearing she did not attend) that she should provide any further information she wished the Tribunal to consider, including any explanation of why she did not attend the original scheduled hearing date. 30 In these circumstances, the focus must be upon the material the Tribunal had before it in deciding on 31 May 2007 whether to proceed under s 426A or to reschedule: see, eg, NALQ [2004] FCAFC 121 , [35]-[36] and SZBQG v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1858 , [13]-[15]. 31 I now turn to the contention that the exercise by the Tribunal of its discretion to proceed under s 426A miscarried. 32 In the exercise of the Tribunal's direction to proceed under s 426A , and not re-schedule the hearing, the Tribunal considered the appellant's letter dated 30 May 2007. The Tribunal was unpersuaded by that letter. As a result, the Tribunal did not accept that the appellant had sufficiently demonstrated her inability to attend the hearing and, consequently, the Tribunal exercised its discretion by refusing to reschedule the hearing. 33 The Federal Magistrate found at [32] that the Tribunal's discretion had not miscarried when it decided to proceed to its decision without permitting the appellant to appear before it. I agree with that conclusion. 34 The appellant's letter of 30 May 2007 was properly considered by the Tribunal. There was no obligation on the Tribunal to call for medical evidence, or to otherwise investigate the allegation of the appellant that she was sick on the original hearing day. The Tribunal was entitled to reject the explanation for non-attendance. 35 In my view, the Tribunal's decision to proceed under s 426A was not capricious, nor did it fail to take into account the material submitted to it: see NBBL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 1045 ; (2006) 152 FCR 592 , 598 at [21]. I do not regard it as incumbent on the Tribunal in this case to inform the appellant of the reason for not rescheduling the hearing, or allowing the appellant the opportunity to present argument on whether the Tribunal should proceed under s 426A , prior to the Tribunal so deciding. 36 The Tribunal, having been apprised of the appellant's position on the original scheduled hearing day, considered a rescheduling, but ultimately decided to proceed with its decision. It did so in light of its rejection of the appellant's explanation of her inability to attend on the original scheduled hearing day and due to the fact that no further information was forthcoming. Nothing in the Tribunal's approach indicated that it failed to provide the appellant with an opportunity to be heard, once apprised of the situation. The appellant was given all the opportunity to be heard as is required by the Act, and the appellant received (if at all required) a real and meaningful invitation prior to the operative decision made by the Tribunal on 31 May 2007. 37 The above reasoning disposes of all the contentions of the appellant, assuming the Federal Magistrate fell into error in not following and applying SCAR [2003] FCAFC 126 ; 128 FCR 553 , and in distinguishing Bhardwaj 209 CLR 597. The appeal be dismissed. 2. The first respondent be refused leave to rely upon the proposed notice of contention dated 31 July 2008. 3. The appellant pay the costs of the first respondent except those costs incurred in connection with the proposed notice of contention dated 31 July 2008. 4. The first respondent pay the costs of the appellant incurred in connection with the proposed notice of contention dated 31 July 2008. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | whether breach of procedural fairness applicant unwell applicant failed to attend tribunal hearing due to illness tribunal gave opportunity to provide explanation and further information tribunal made aware of reason for non-attendance tribunal refused to reschedule hearing tribunal then proceeded to make its decision no jurisdictional error. federal magistrate accepted evidence of illness no medical evidence lead cross-examination of witness medical opinion not required. immigration evidence |
The orders were made by the Federal Magistrate on 26 October 2007 and the application for an extension of time was made on 22 November 2007. The period for filing and serving a notice of appeal is 21 days after judgment was pronounced: Federal Court Rules O 52, r 15(1). The Court or a Judge for special reasons may at any time give leave to file and serve a notice of appeal: O 52, r 15(2). 2 The application for an extension of time was supported by an affidavit of the applicant and a document described as an amended notice of appeal. The latter document is more properly described as a draft notice of appeal. In his affidavit, the applicant states that he came to Australia and he made an application for a protection visa. He does not wish to return to Malaysia. He contends that the decisions made by the Tribunal and the Federal Magistrates Court respectively, were not "fair". When I get read to lodge the application, I was told that I was out of time because it only have 21 days but I was informed by 28 days. It is really hard to understand, I greatly appreciate if I can get an extension for my case. I could not go back to Malaysia for a normal life due to my believe of Chinese Buddhist religion. I did not give RRT more information about my real chance of being subject to persecution because it is very difficulty to get them now. And it I go back now I could not get out again. I do not want to have my life to testing dangers. I do not have much education sometimes it is hard to explain myself logically. But my situation is true and I had and will be prosecuted it I go back to my country. I refer also to Parker v The Queen [2002] FCAFC 133. In Hunter Valley Developments Pty Ltd v Cohen , Wilcox J identified six relevant matters at 348-9. I have had regard to those matters. It must be said immediately the period of delay in this case is very short and, subject to what I am about to say, no injustice will be occasioned to the first respondent if an extension of time is granted. It is not easy to understand the applicant's explanation for the delay but in view of the language difficulties I am not prepared to say that his explanation is an unsatisfactory one. In those circumstances, it will often be appropriate to extend time. However, the matter which is fatal to the application is the fact that the applicant has been unable to identify any reasonable prospect of success in the appeal: Jeffers v The Queen [1993] HCA 11 ; (1993) 67 ALJR 288. 5 The applicant is a national of Malaysia and he fears persecution in that country because of his Chinese ethnicity and practice of Buddhist religion. He arrived in Australia on 21 April 2004 and he applied for a Protection (Class XA) visa on 4 June 2004. A delegate of the Minister refused his application on 5 June 2004. The applicant applied to the Tribunal for a review of the delegate's decision. On 28 December 2006 the Tribunal decided to affirm the decision not to grant a Protection (Class XA) visa to the applicant. The applicant then applied to the Federal Magistrates Court for constitutional writs. He had the assistance of an interpreter. He did not prepare any written submissions in accordance with orders made by the Court and he declined to make oral submissions. The Federal Magistrate summarised the submissions made by the Minister's counsel. He then said that the Tribunal considered each of the applicant's claims separately and then cumulatively to come to its final conclusion that the applicant did not have a well-founded fear of persecution for a Convention reason. He said that, in addition, the applicant's own evidence contradicted his claim in some instances. He noted that the applicant's claim about the reasons he was unable to secure university admission contradicted his evidence of being unable to pay the university fees. In a similar way, the applicant acknowledged that the claim he had been beaten related to incidents 15 to 20 years ago and were confined to a relatively short period of time when he left secondary school. The Federal Magistrate noted that in relation to the claim of being refused a Malaysian passport, the country information indicated to the Tribunal that this was not unusual and could apply to any Malaysian citizen. The Federal Magistrate noted that on the applicant's own admission, his problems were associated with particular individuals in and around his home town in Malaysia and that these problems ceased to exist when he moved away from this area of work. The country information considered in the sources cited in this decision and elsewhere have not satisfied the Tribunal that ethnic Chinese Buddhists in general, or the present applicant in particular, have a real chance of being subject to persecution for that reason in the reasonably foreseeable future in Malaysia. Accordingly, the Tribunal does not accept the present applicant has a real chance of being subject to persecution in Malaysia, at least for any reason he claimed or implied. He also noted that it was not apparent from reading the decision as a whole that the Tribunal's reasons appeared illogical. The Federal Magistrate was not satisfied that the applicant had identified any jurisdictional error and that he was satisfied that on a fair reading of the Tribunal's decision no error was revealed. 8 Nothing is put in the application for an extension of time or the affidavit of the applicant or the proposed notice of appeal or in the oral submissions of the applicant to suggest that these conclusions were arguably wrong. In those circumstances, although the period of delay is very short, I do not think it appropriate to exercise the discretion to extend time. Nothing has been put to the Court to suggest that an appeal would have any prospects of success. I refuse the application for an extension of time. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | application for extension of time to appeal against orders of federal magistrate whether satisfactory explanation for delay of six days whether reasonable prospects of success on appeal shown migration |
The applicants resist that being done on a summary basis. 2 There are issues between the parties in the Supreme Court of New South Wales of a broad nature involving discretionary considerations invoked by the cause of action based on s 133F of the Conveyancing Act 1919 (NSW). Nobody would struggle to stop a party raising a matter before the court if the party has not actually bargained it away entirely. But, in circumstances where, as I am inclined to think, a reasonable expectation has arisen that there was nothing further to come in litigation between the parties, we are in the area of discretion and, I think, possibly unconscientious conduct --- an area where the Court carefully moulds its remedies. The proper remedy may well be to let a party continue with its claim, but to ensure that all the detriments that the opponent can point to are overcome. The Supreme Court is going to be in a much better position to do that than this Court, and I do not want to do things that might be thought to cause some embarrassment to the s 133F argument, as to which it sounds to me as if there might be things to be said on both sides. 3 The better course is to send the matter to the Supreme Court with this issue undetermined and let the parties decide what they want to do about it there. If the respondents want to pursue an application for summary judgment there they can; if they want simply to try to force the applicants to seek leave there in some way, they can; or if they want to just leave their arguments to another day and suffer the costs of this interlocutory application, the respondents can do that. Everybody will be in the one place with the one set of proceedings and, I think, with one court in a position to order or not order mediation which, despite two settlements previously, I am strongly of the view should occur in this case. 4 Further, in the completely unexplained circumstances of the late raising of the cause of action sought to be raised in this Court, the inference that arises is that of forum shopping. 5 I will transfer the proceedings to the Supreme Court in the interests of justice and reserve for the Supreme Court the question of the costs of the motion, there being potential discretionary issues arising in relation to the resolution of the Notion of Motion presently before this Court, which it seems to me will overlap with discretionary issues that are bound to arise in the existing proceedings of the Supreme Court. It is better that they all be dealt with in the one place. I decline to deal with this application to finality. 6 I will make orders in accordance with the short minutes. I am indebted to counsel for their assistance. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. | federal court original jurisdiction remedies and orders concurrent and overlapping proceedings in the supreme court of new south wales. high court and federal court |
The principal asset of YRTB is the shares it holds in Busy Bookkeeping Pty Ltd (BBPL). BBPL is the franchisor of the Busy Bookkeeping business which provides bookkeeping services to small businesses. It provides services to its franchisees (of which there are about 53) to enable them to carry out their activities. It receives revenue by way of management fees, the proceeds on the sale of franchises, royalties and from the sale of merchandise. The Bookers seek to have YRTB would up and a liquidator appointed. The question is whether those orders should be made. 2 The Bookers and the Coslovichs acquired YRTB in 2003 to purchase BBPL. Mrs Coslovich and Mr Booker were appointed directors of both companies. The Bookers and the Coslovichs prepared, but did not execute, a shareholders agreement. The agreement provided that the Coslovichs (through We Keep the Books Pty Ltd) would be responsible for the administration of the companies, including the maintenance of corporate records and financial accounts and the Bookers (through Booker Accounting Services Pty Ltd) would be responsible for sales, marketing and training. The agreement also provided that all expenditure was to be authorised by Mrs Coslovich and Mr Booker. While the agreement was not executed it appears to have been put in effect, at least in the early years of the companies' operation. 3 In mid-2005 the relationship between the Coslovichs and the Bookers broke down. Mr Booker claims that the Coslovichs restricted his access to the financial records of YRTB and BBPL. This prevented him from understanding the transactions recorded in the accounts. Mr Booker also alleges that YRTB and BBPL were paying "disproportionate amounts" to persons associated with the Coslovichs. Mrs Coslovich rejects the allegations of misconduct and herself asserts that Mr Booker was "not adequately performing his assigned duties" which had "impacted upon the effective running of the franchise business and directly affected the viability and profitability of the franchise business". According to Mrs Coslovich, Mr Booker's performance was so poor she was forced to appoint a "National Sales Manager" (whose appointment has since ended) in order to protect the interests of YRTB, BBPL and the franchisees. 4 The relationship between the parties worsened after 2005. In early June 2007 Mr Booker was denied access to BBPL's bank accounts. He responded by causing the company's banker, the Commonwealth Bank, to temporarily freeze the accounts. Although the evidence is unclear, it appears that on 20 June 2007 there was a meeting of the members of both companies to try and sort out the problems. Little was resolved. The Bookers left after the meeting became "heated and aggressive on both sides". They later found out that resolutions had been passed removing Mr Booker as a director of both BBPL and YRTB and appointing Mr Coslovich in his place. The Bookers claim they had no notice of these resolutions. The Coslovichs dispute this assertion, but no written notice to that effect has been produced. While I have not had need to resolve this dispute, it seems highly unlikely that if the Bookers had notice of the proposed resolution they would have left the meeting. 5 At any rate, on 4 December 2007 the Bookers brought the application to have YRTB wound up in order to secure "the value of [their] investment". They rely on s 461(1)(k) of the Corporations Act 2001 (Cth), the just and equitable ground. They assess the value of their investment to be approximately $300,000 comprising: (a) an initial contribution of $37,500 to facilitate the purchase of BBPL; (b) money paid by the Bookers to BBPL in order to purchase franchises in the Bookkeeping business (which was designed to generate a profit in BBPL); and (c) (unpaid) time invested by the Bookers in the business. Mrs Coslovich opposes the application to wind up YRTB, submitting that there are "more appropriate remedies to address the various issues raised by the Plaintiffs". 6 Since the application was filed further disputes have arisen between the parties. Mr Booker has filed evidence to show that the total credit balance of BBPL's bank accounts is very low and that a number of cheques drawn by BBPL were dishonoured. Mrs Coslovich denies that the companies are insolvent. She explained that administrative errors and Mr Booker's decision to freeze the accounts resulted in a "backlog" which was responsible for the low bank balance and the dishonoured payments. This is just the tip of the iceberg. Other allegations regarding a range of issues have been made on a regular basis by one side against the other. Each allegation has in turn been denied. The only thing that is clear from the allegations and the counter-allegations that have been made is that the parties simply cannot work together. The ill-will that exists between them will never end. 7 Earlier this year the dispute between the parties was referred to mediation before a registrar. The Coslovichs contend that the dispute was settled at the mediation. In substance they say that the Bookers agreed to purchase the Coslovichs' interest for about $150,000. The Bookers contend that no final agreement was reached. They say that they were happy to purchase the Coslovich interest but indicated at the mediation that they were concerned there had not been adequate disclosure of all the liabilities incurred by the companies. Counsel for the Bookers began to prepare, but did not finalise, written terms of settlement at the mediation. Counsel completed drafting the terms on the evening of the mediation and a copy was sent to the Coslovichs the following day. The terms contained the following condition: "These terms of settlement ... are subject to and conditional upon: (a) the plaintiffs advising the defendant's solicitors ... that they approve the contents of the current financial statements [of the companies] ...". The Coslovichs objected to the condition and, accordingly, refused to sign the terms of settlement. They argued that the condition had not been agreed at the mediation. 8 There was a hearing for the purpose of deciding whether a concluded agreement had been reached. Counsel for the Bookers deposed that it was made clear at the mediation Mr Booker was "not prepared to settle unless he was first shown the accounts and given an opportunity to consider whether he was content with them". That is the reason Counsel included the condition in the terms of settlement. Mrs Coslovich said that final agreement had been reached at the mediation. I advised Counsel that these reports could not be provided until Monday and that this would be to late as we required the matter to be settled today. We agreed to provide the financials requested on the basis that we would indemnify the Bookers for any liabilities not in the normal course of business ... I am satisfied that no concluded agreement for the sale of the Coslovich interest was reached. For one thing the parties contemplated that their agreement would be reduced to writing and signed. This did not happen. Additionally, it is clear that the Bookers, who had for some time only been given limited information about the companies' affairs, would not agree to purchase the Coslovich interest until they had an opportunity to review the financial records. As Counsel said, it was made clear that "settlement was contingent upon ... [the Bookers] being satisfied with the accounts. I indicated that this might be the most effective way of resolving their dispute and unwinding their relationship. The parties adopted the suggestion and Max Kurz of KE Business Advisory Services Pty Ltd was appointed to value BBPL and find a purchaser for the BBPL shares. The process of finding prospective purchasers has proved to be slow. It has also created further complications. The Bookers have expressed an interest in purchasing the shares which, in turn, has resulted in the Coslovichs (who are in de-facto control of YRTB and BBPL) denying them access to information they sought due to a perceived conflict of interest. The sale process is continuing. 10 In this case it is not necessary for me to resolve all the issues in dispute between the parties. Nor is it necessary to determine who, if anyone, is to blame for bringing about the current impasse between the Bookers and the Coslovichs. What is clear is that the present situation cannot be allowed to continue. It is neither fair nor reasonable from anyone's perspective, especially that of the Bookers. And the principles on which he may do so are those worked out by the courts in partnership cases ... The reasoning of Lord Wilberforce is directly applicable in this case. 12 In Johnny Oceans Restaurant Pty Ltd v Page [2003] NSWSC 952 Palmer J wound up a company on just and equitable grounds on the basis that there had been "a complete deadlock between the two opposing camps, that there [had] been an irretrievable breakdown in the relationship between the members of the company, and that the company's operations in the future [would], therefore, not be able to be conducted in any commercially viable and sensible way". In Clarke v Bridges [2004] FCA 394 I wound up a company on just and equitable grounds on the basis that there was a deadlocked board. 13 These authorities make it clear the YRTB should be wound up. 14 There is also the following practical consideration. Once the shares in BBPL are sold, YRTB's reason for existence will come to an end. It will have the funds from the sale of the BBPL shares but its shareholders will never agree on how those funds should be re-invested. All that is left to be done is for YRTB to distribute the money to its shareholders and then be wound up. Put simply, if YRTB is not wound up now, it will be wound up in the future. YRTB is a company whose purpose has come to an end. 15 Placing YRTB into the hands of a liquidator will have another significant benefit. It seems inevitable that the current sale process will be subject to further dispute if the parties are left to their own devices. In the circumstances, it is better that an independent officer takes control of, and supervises, the sale process. I should add that I am of the opinion that the appointment of a liquidator will not adversely affect either the sale of the BBPL shares or the activities of BBPL and its franchisees. It is only YRTB, the holding company, which is being placed under the control of the liquidator. 16 For the foregoing reasons I will order that YRTB be wound up and that Adrian Lawrence Brown be appointed as its liquidator. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | winding up just and equitable grounds quasi-partnership company deadlock between shareholders corporations |
The Tribunal had affirmed a decision of a delegate of the then Minister for Immigration and Multicultural Affairs not to grant protection visas to the appellants. They arrived in Australia on 22 November 1997 and lodged applications for protection visas on 13 January 1998. The delegate refused to grant the visas on 16 February 1998. The appellants were not properly notified of the delegate's decision until 16 September 2005. The application for review by the Tribunal was lodged on 26 September 2006. The appellants had a son in 2004 and the appellant's wife was pregnant at the time of the Tribunal decision. However, only the appellant and his wife were the subject of the application before the Tribunal. Only the first appellant made claims to be a refugee and will be referred to as the "appellant". 3 The appellant's claims were as follows. He and his wife had lived on the appellant's father's coffee farm in Colombia. The appellant had worked on the farm for ten years prior to leaving Colombia. The appellant's parents and sister lived in Pereira, not far from the farm. In 1990, the appellant joined the Liberal Party, and was involved in supporting a local politician and assisting with campaigns for a number of elections. He also joined a community action group of which he was president for 18 months. A group formed in his area which began demanding protection money. The appellant was a victim of this extortion. He initially paid the money for fear he would be harmed as other farmers who did not pay had been. Later, however, he did not pay. In August 1997, another group, the Ejercito Popular de Liberacion ("EPL") formed in the region. That group also harassed farmers and members of his community group demanding payment of a "war tax", and again, the appellant became a target. The appellant claimed that he feared being hurt or killed by an armed group such as the EPL if he returned. He had been informed of continuing threats against him and his wife since leaving Colombia. He claimed that the EPL would target him because he had not paid the illegal "war tax" they demanded from him and because they feared he would report them to the authorities. In response to the Tribunal suggesting he could live away from his farm, the appellant said he would still be targeted as he was involved in politics. 4 The appellant's application to the Tribunal authorised a migration agent, Ms Ramos, to act on his behalf and appointed her as authorised recipient. Written submissions were provided by Ms Ramos, who also appeared at the hearing. Further submissions, a letter from the appellants and some other documents were provided after the hearing. Both the appellant and his wife gave oral evidence before the Tribunal. 5 Included in the information provided by the appellant to the Tribunal was material about the human rights situation in Colombia. As the Tribunal noted, this included information that the Fuerez Armadas Revolucionarias de Colombia ("FARC") cooperates with small armed groups. The submissions made by the Ms Ramos, which the Tribunal recorded, also included statements that FARC was working with small guerrilla groups including the EPL, and that the appellant feared FARC groups which operated nationwide with the cooperation of the guerrillas. It accepted also that he had assisted a local politician, who was a former mayor of the municipality. It also accepted that the EPL had approached the appellant demanding money and had threatened him. 7 However, the Tribunal found that the EPL had threatened the appellant not because of his association with the Liberal Party but simply because it wanted him to pay them. The Tribunal's reasoning was as follows. Firstly, the appellant had joined the party in 1990. If the EPL had taken an adverse interest in him, it was implausible that it would wait until 1996 to threaten or seek to harm him. Secondly, the appellant had paid them on two occasions around the time of the threats, which tended to establish that the threats were associated with demands for money. Thirdly, there was no suggestion that the politician he had assisted, and who was a former mayor of the municipality and lived in the same area as the appellant, had ever been threatened or harmed. The Tribunal did not accept the appellant's explanation as to why this politician was not targeted, which was that he was an important electoral candidate and had protection. 8 The Tribunal referred to independent country information indicating that a small EPL group continued to operate in Colombia. It found that it was possible that the EPL could target the appellant if he returned to his farm in Colombia, and that he could face harm serious enough to amount to persecution. In view of the history of violence committed by armed groups in Columbia, the Tribunal was prepared to accept that the EPL could regard a refusal to pay a "war tax" as an expression of political opinion. It was therefore satisfied that that the appellant had a well-founded fear of persecution, if he returned to the farm and refused to pay, on the basis of the political opinion imputed to him by the EPL. 9 The Tribunal went on to consider whether the appellant could obtain protection by relocating within Colombia. The country information to which the Tribunal had earlier referred included information which the Tribunal had apparently sourced from the Immigration and Refugee Board of Canada dated 23 July 2003. This included information, firstly, from the Centre for International Policy to the effect that the EPL had only a few hundred members, and that internal relocation within Colombia was possible for individuals who were not well known because "guerrilla and paramilitary fronts" did not usually have great coordination. It noted, however, that recent arrivals to new areas were viewed with suspicion, so that "displacing oneself is not that easy". Secondly, it included information from the Canadian Embassy's Refugee Unit indicating that the lack of "national striking power" of "armed groups other than the FARC and the AUC" limited their ability to target individuals. There is no independent evidence suggesting that the group [the EPL] operates throughout Columbia. Furthermore, there is independent evidence before me, which I accept, indicating that a group such as the EPL would not have the resources to track down a person throughout Columbia". It was "inherently unlikely" that his location would be divulged to the EPL. The appellant had given evidence that a farm worker who visited the farm had been asked about his location. The Tribunal found that there was no reason that any one would let this farm worker know if the appellant returned, and there was no evidence that anyone else had been asked about his location. 11 The Tribunal concluded that it would be reasonable for the appellant to relocate. The applicant claimed that if he returned to Colombia he would effectively feel compelled to return to the farm and be a coffee grower. I do not accept the applicant's claim in this regard. If the applicant is prepared to live in Australia where he is unable to have contact with his farm, he could also live in Colombia without choosing to live or work on the farm. The applicant has lived in Australia for some eight years. The Tribunal said that the appellant had not suggested any financial, logistical or other barriers preventing him from settling in a city in Colombia or travelling to some other area without first going to the farm. The Tribunal indicated that the appellant would be able to be active in the Liberal Party if he chose to in another part of Colombia. It indicated that the evidence before it did not support a conclusion that involvement with the Liberal Party as such would give rise to a well founded fear of persecution for a Convention reason. 13 The Tribunal also considered the appellant's wife's health problems. It found that the evidence did not suggest these complications would make it unreasonable for them to return and to live in a city. It was also reasonable to assume that medical and educational facilities might also be better in a city than in a rural area. Her pregnancy and health problems might give rise to humanitarian considerations, but could not be taken into account by the Tribunal in making its decision. The evidence also did not establish that their status as parents made it unreasonable for them to relocate. The Tribunal failed to carry out its review in a bona fide manner, including by declining to have regard to evidence offered by the appellant in relation to the general situation in Colombia, and by dismissing the link between the appellant and his farm on an improper basis. 16 In relation to the first ground, his Honour was not persuaded that the Tribunal failed to take into account all relevant material. His Honour listed the matters that the Tribunal had taken into account in deciding that it was reasonable to relocate within Colombia. The Federal Magistrate considered the appellant's argument that an administrative decision maker must take into account the best interests of any child connected with the application as a primary consideration and that the Tribunal had failed to take into account the best interests of the appellant's son or unborn child in considering the reasonableness of relocation. His Honour noted that the United Nations Convention on the Rights of the Child 1989 did not form part of the domestic law of Australia. It followed that the Tribunal was not required to take account of the best interests of the appellant's son or the unborn child when making the decision. 17 In relation to the second ground, the Federal Magistrate did not accept that the decision was based on an irrational assumption or was irrational or illogical and viewed the ground as an attempt at merits review. The conclusion that the EPL would not be informed of the appellant's new location had been open on the evidence. 18 In relation to the third ground, his Honour said that the Tribunal had been entitled to draw the conclusions that it did in finding that medical care and educational facilities would be better in a large city than in a rural area. It had been no more than a "common sense" finding, in relation to which specific evidence was not necessary. His Honour also noted, in relation to the procedural fairness issue raised by the fourth ground, that the common law natural justice hearing rule was excluded, the application having been commenced after s 422B of the Migration Act 1958 (Cth) came into operation. 19 In relation to the fifth ground, his Honour found that the Tribunal had taken into account the relevant factors and correctly applied the test in Randhawa v Minister for Immigration, Local Government and Ethnic Affairs (1994) 52 FCR 437 (" Randhawa "). 20 In addressing the final ground, the Federal Magistrate found that the Tribunal had considered the materials presented to it by the appellant. His Honour regarded the appellant's claim that his feeling about the farm had been ignored as an attempt to challenge the factual findings, and found that the Tribunal had considered this aspect of the evidence. His Honour dismissed the application. His Honour erred in finding that the Tribunal did consider the situation in Colombia as only one extract of country information it relied on related to internal relocation. The Tribunal failed, or failed adequately to determine whether an appropriate level of protection existed in any other part of Colombia. The Minister's had also filed written submissions in relation to the proposed amended notice of appeal. However the hearing was adjourned to allow the appellant to file and serve a proposed further amended notice of appeal raising a further ground and any evidence in support, and for both parties to provide submissions. Counsel for the appellant indicated that the further ground concerned the Tribunal's failure to access a document published by the United Nations High Commission on Refugees dated September 2002. Counsel for the Minister indicated that an amendment to raise the new ground would be opposed. Counsel for the appellant also made oral submissions on the Randhawa ground. 24 After the first hearing, the appellant served on the Tribunal a notice to admit facts. The notice required the Tribunal to admit, for the purpose of these proceedings, that on 4 December 2005, being the day before the Tribunal decision was made, the Tribunal held a document entitled "'International protection considerations regarding Columbian asylum seekers and refugees" from the UNHCR, Geneva, September 2002 and later revised in September 2005. The appellant also served on the Tribunal a notice to produce dated 6 March 2007, requiring the Tribunal to produce a catalogue of all the material held by the Tribunal relating to Colombia. 25 The Tribunal responded in a letter dated 20 March 2007 from its solicitors. It stated that the notice to produce was defective because it required production before the day of the final hearing, contrary to O 33 Rule 12 of the Federal Court Rules . It stated also that, in any event, the catalogue sought was not relevant to any issue in dispute, and that the Tribunal did not hold any such document. It enclosed a notice to dispute facts, by which the Tribunal disputed that it held the held the document identified in the notice to admit facts. A document entitled "International protection considerations regarding Colombian asylum-seekers and refugees", UNHCR, Geneva, March 2005 ("the 2005 document"). 26 The appellant served on the respondents a second notice to admit. It required them to admit that either or both of the 2002 document and the 2005 document were "centrally relevant" to the Tribunal's decision, and that the Tribunal proceeded to make its decision without making any attempt to obtain and to take into account the two documents before making the decision. The appellant also served a second notice to produce, requiring production of "all documents comprising the index of country information" available to the Tribunal at the time of the Tribunal's decision, with the word "documents" having the same meaning as defined in the Evidence Act 1995 (Cth). 27 The Tribunal (by its solicitors) responded by letter indicating that the Minister did not concede that the appellant had any entitlement to adduce fresh evidence on appeal by means of issuing a notice. Further, the Minister denied that any of the matters referred to in the second notice to admit facts were "facts" in the sense required by O 18 r 2 of the Federal Court Rules . It stated that in any event, the Tribunal disputed the facts. Attached was a second notice disputing facts to this effect. The Minister also objected to the production of documents requested in the second notice to produce, on the bases set out in the letter. 28 When the hearing resumed on 17 May 2007, counsel for the appellant sought to file in Court a further amended notice of appeal. The further amended notice of appeal was served on 16 April 2007. The appellant and the Minister had filed written submissions in relation to the proposed amended notice of appeal prior to the hearing. The Minister opposed leave to file the further amended notice of appeal for reasons outlined orally and in written submissions. 29 The proposed further amended notice of appeal contained two grounds. The first was the Randhawa ground. The second ground was that the decision of the Tribunal was void for jurisdictional error by reason of unreasonableness and constructive failure to exercise jurisdiction. This ground was not raised before the Federal Magistrates Court. The claim in substance is that the Tribunal fell into jurisdictional error by failing to have regard to particular country information relevant to the question of the reasonableness of relocation in Colombia. That information was the 2002 document and the 2005 document. The appellants contended that those documents were "readily available" to the presiding member of the Tribunal and were "centrally relevant" to the decision to be made. The Tribunal's failure to obtain and have regard to the documents was said to have had the result that the Tribunal exercised its power in an unreasonable manner and constructively failed to exercise its jurisdiction according to law. 30 In opposing the grant of leave to file the further amended notice of appeal, the Minister relied on the lack of a reasonable prospect of success of the ground, the lack of an acceptable explanation as to why it had not been raised below, and prejudice if the amendment was allowed. 31 The 2002 document and the 2005 document were annexed to an affidavit of the appellant's solicitor, Michaela Byers, sworn 16 April 2007. The Minister did not oppose the affidavit and annexures being admitted into evidence for the purpose of determining the application for leave to amend. However, if leave was granted, the Minister opposed the admission of the affidavit into evidence on the ground that the appellant has failed to satisfy the requirements for adducing further evidence on appeal. In particular, it was submitted that no explanation had been provided as to why the fresh evidence could not, with reasonable diligence, have been adduced at first instance. 32 At the hearing, the Minister indicated that if leave to amend were granted and leave was given to the appellant to read the affidavit of Ms Byers, the Minister might wish to adduce evidence in response as to the number of potentially relevant documents held by the Tribunal and the processes within the Tribunal, by way of notice to admit facts or if necessary, by way of affidavit evidence. I raised with counsel for the appellant two propositions arising from the description by the Minister's counsel of the evidence that might be adduced by the Minister. The first was that the Tribunal had a vast amount of material available in relation to any particular country. The second was that there are in the order of 11,000 pieces of information in relation to Colombia available to the Tribunal. That figure was based on instructions received by the Minister's solicitors. Counsel for the appellant accepted both those propositions. Given that concession, counsel for the Minister indicated that there was no issue about having to adduce further evidence. The hearing then proceeded on the assumption that leave to amend was granted and the affidavit of Ms Byers was admitted though on the basis that, whether leave to amend should be granted, and whether leave should be given to adduce that evidence, would be dealt with in the final judgment. The parties made oral submissions in relation to both grounds contained in the proposed further amended notice of appeal. The 2005 document contained "revised eligibility guidelines", which, as stated in its introduction, were introduced because "[t]he wide range of profiles of Columbian asylum seekers and the rapidity with which armed conflict is involving pose difficulties, for determination of Columbian asylum claims". One of the issues addressed in the document is the capacity for irregular armed groups to track down victims of extortion who relocate within Colombia. It included information that most "agents of persecution" have the capacity to collect detailed information on victims and to track people throughout Colombia, and that once person has became a victim of extortion, the possibility of them obtaining protection was limited. 34 The document also referred to a report by an adjunct Professor at Georgetown University. According to the report, "guerrilla and paramilitary groups" often had sophisticated technology and could track people throughout Colombia, including those who relocated to big cities such as Bogota. There had been cases where people had left Colombia for months or years and had been killed when they returned. 35 Under a heading "Internal flight or relocation alternative", the document discusses the Refugees Convention and states that "if internal flight or relocation is to be considered in the context of refugee status determination, a particular area must be identified and the claimant provided with an adequate opportunity to respond". In addition, it is important to bear in mind the risk inherent in travelling from one area to the other as well as the fact that Columbia has large numbers of IDPs living in deplorable conditions in urban and rural areas. Decision-makers are therefore generally advised not to apply the notion of internal relocation alternative". It is difficult to understand why, in the ordinary course, the Tribunal would not have recourse to recent UNHCR reports, if available, as an almost essential part of its decision-making. The UNHCR is an international organisation of high repute dealing with issues concerning refugees in a variety of contexts. 37 The appellants relied on the comments of Wilcox J in Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 170. Wilcox J determined that in refusing to grant permanent residency to the applicant, the Minister had failed to take into account relevant considerations, which was a sufficient ground for the decision to be set aside. His Honour considered whether the decision was "so unreasonable that no reasonable person could make it". It would follow that the court, on judicial review, should receive evidence as to the existence and nature of that information". His Honour also noted that it was not strictly necessary for the point to be decided. It will need to be apparent that relevant material was readily available to the decision-maker, but ignored". In Prasad , Wilcox J spoke of circumstances where it was obvious that material was readily available which was centrally relevant. But his Honour's observations concerned a challenge to a decision by reference to s 5(1)(e) and s 5(2)(g) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), namely on the basis that the decision involved the improper exercise of a power because the decision was so unreasonable that no reasonable person could have so exercised the power. Importing the observations of Wilcox J (quoted at [37] above) into a case such as the present, it would be necessary to determine to whom it was obvious that material was readily available. Is that an assessment made after the event by reference to facts proved in the judicial review proceedings (facts such as the Tribunal had the 2003 and 2005) but without proof that the Tribunal member knew of the documents? Or does it additionally require proof that the Tribunal member was aware that the documents were held by the Tribunal or at least knew that it was likely that such documents were held by the Tribunal? The answer is suggested by Wilcox J who referred, before the quoted passage, to circumstances where the decision maker unreasonably fails to ascertain relevant facts which he or she knew to be readily available to him or her (at 169.9). In the present case one would have thought it would be necessary to demonstrate that the Tribunal member knew of the documents existence or, perhaps, ought to have known that it was likely the documents existed and were readily available. The evidence in this case would not support a finding to that effect even inferentially. In my opinion, the point sought to be raised by the appellant about the 2002 and 2005 documents has insufficient prospects of success to permit it to be raised in this appeal. Consequently I refuse the appellant leave to amend the notice of appeal to add this ground. 41 I turn now to consider the Randhawa ground. While it received only limited attention by counsel for the parties, particular (b) to that ground appears to me to be of some importance. In Randhawa, the Full Court considered the appropriate test to be applied regarding the question of whether an applicant can be reasonably expected to relocate to another area in their country of nationality. In the context of refugee law, the practical realities facing a person who claims to be a refugee must be carefully considered . A.R .7. Professor Hathaway, op. cit. In situations where, for example, financial, logistical, or other barriers prevent the claimant from reaching internal safety; where the quality of internal protection fails to meet basic norms of civil, political, and socio-economic human rights; or where internal safety is otherwise illusory or unpredictable, state accountability for the harm is established and refugee status is appropriately recognised. In the present case the applicant raised several issues, all of which were dealt with by the decision-maker. Yet the difficulties faced by an applicant in demonstrating that there is no other area to which they can reasonably be expected to relocate are often formidable. There are at least two main sources of difficulty. Firstly, the issue of relocation is almost always raised by the Tribunal, not the applicant, and raised at the hearing. The significance of this is particularly acute in cases where the applicant is not represented before the Tribunal, although that is not the present case. Secondly, the issue is necessarily speculative. This second issue raises the importance of the Tribunal properly evaluating what the asylum seeker says about relocating. This issue requires consideration of not only whether a safe haven exists in another part of the country. Proper consideration must also be given to the issue of relocation as a practical matter, by considering whether it would be reasonable to expect the person to relocate in view of all the "practical realities" facing that person. 43 In this matter, central to the appellant's case was that he would return to the farm and, in the result, be in the same position he had been in when he suffered persecution. That the appellant would feel compelled to return to the farm is clear from the evidence he gave at the Tribunal hearing. I would have to growing coffee and being involved with the political life, because because that what I like, that's what I learned to do; and I'm not going to... let a few bandits dictate what I can or cannot do. And that's that... if you said to me that if you returned to Colombia and lived somewhere away from region, that the chance for you to face persecution there would be remote. So if you are in Australia and you can't go back to the farm, you could be in Bogota and not go back to the farm. Okay. So, your father is actually the owner of the farm? So, does your father still own the farm? So works the farm? So no workers there, nothing there? So when you say someone goes to... who's that someone, a worker, your father, somebody else? So, what kind of farm was it? What was growing there? So is coffee still being grown or not? So no one's living there but... Is the farm still producing income for the coffee? So there is no actual harvesting on the farm, is there? So before you left Colombia, you were managing the farm. Is that right? I was at the farm. The farm was still owned by the appellant's father and producing coffee and some sporadic harvesting still took place. His father was paying a farm worker to keep an eye on the farm. If the appellant returned to Colombia, he would feel compelled to return to the farm because it belonged to his family and farm work was the only kind of work he had done in Colombia. His family's income was also partly derived from the farm. 50 In its reasons, the Tribunal recounted that the applicant had claimed that if he returned Colombia he would effectively feel compelled to return to the farm and be a coffee grower. That is a clear and unambiguous import of the evidence set out earlier. In response to this, the Tribunal said, in the reasons, "I do not accept the applicant's claim in this regard". In support of this conclusion, the Tribunal pointed out that the applicant had been prepared to live in Australia without contact with his farm and he could likewise live in Colombia without contact. It then pointed to work he had done in Australia (construction and cleaning) and that his wife had worked as a trade beauty therapist. 51 However what the Tribunal has done, in my opinion, is to provide bare logical alternatives to what the appellant indicated he would do without testing whether the logical alternatives, in the face of the appellant's asserted wish to return to the farm, were reasonable. The question of whether an asylum seeker, who claims of having been persecuted have been accepted, will be compelled to act in a particular way because of family obligations, is not answered by pointing to conduct plainly arising from his earlier persecution. That is, it was not open to the Tribunal to reject the appellant's claim that he would feel compelled to return to the family farm if he were to return to Colombia, by pointing to the fact that he abandoned the farm by fleeing to Australia. His fleeing to Australia was to escape persecution. The Tribunal did not give any real consideration to the specific impediment raised by the appellant, namely that he would feel compelled to return to work on the family farm. 52 On one view, the Tribunal's conclusion that it "did not accept the [appellant's] claim in this regard" was no more than a finding of fact. That was the approach of the Federal Magistrate. But in substance, it was significantly more. It was not a finding about past events but a conclusion that it would be reasonable to expect the appellant to relocate within Colombia without given any real consideration to the specific issue he had raised. An assessment of whether it was reasonable in the circumstances to expect the appellant to relocate could not be made by merely pointing to the fact that the appellant had not been on the farm for some years because he is in Australia and had not been doing farm work whilst in Australia. The test propounded by Black CJ in Randhawa requires that the evaluation be proper, realistic and fair and all the circumstances be taken into account. In my opinion, the Tribunal misunderstood the content of the principle propounded in Randhawa , did not apply it and thereby fell into jurisdictional error. 53 The appeal should be allowed with costs, the Tribunal's decision set aside and the matter remitted to the Tribunal. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | appeal from decision of federal magistrate dismissing application for review of decision of refugee review tribunal challenge to tribunal's findings regarding relocation whether tribunal erred in failing to have regard to documents on internal protection produced by united nations high commissioner for refugees whether tribunal erred in finding it was reasonable for the appellant to relocate within colombia migration |
The effect of the Review Board's classification was to ban the sale of the publications. The reviews undertaken by the Review Board were initiated by an application by the second respondent ('the Attorney-General' or 'the Attorney') following the initial classification of the two publications as 'Unrestricted' by the Classification Board ('the Board'). The applicant has applied to this Court, under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'), for judicial review of the Review Board's decisions to classify each publication 'RC'. The applicant seeks declarations that the Review Board's decisions in respect of both publications are invalid and of no effect. It also seeks orders setting aside the decisions and requiring the Review Board to reconsider the applications for review according to law. It is common ground that the application raises the question of whether the Review Board's decisions to classify these publications 'RC' were made in accordance with the relevant statutory provisions. The applicant's entitlement to the relief sought turns upon the proper construction of provisions of the Classification (Publications, Films and Computer Games) Act 1995 (Cth) ('the Act') and the National Classification Code ('the Code') and the Guidelines for the Classification of Publications 2005 ('the Classification Guidelines'), which are each made under the Act. The grounds upon which the applicant claims relief depend, in essence, upon what it contends is the Review Board's erroneous application of those provisions of the Act and the Code which pertain to the making of classification decisions. In particular, the applicant takes issue with the Review Board's decision to classify the publications 'RC' on the basis of its finding that both publications 'promote, incite or instruct in matters of crime or violence'. The Act establishes a general scheme for the uniform classification, throughout Australia, of all publications, films and computer games that are intended to be offered for sale, and prescribes by whom classification decisions are made. The States and Territories, in turn, have enacted legislation that provides the means of enforcing those classification decisions. The Board is responsible for classifying publications, films and computer games upon application (s 10). Constituted pursuant to s 45 of the Act, the Board comprises the Director, the Deputy Director, Senior Classifiers and other members (s 46). In appointing members to the Board, s 48(2) of the Act stipulates that 'regard is to be had to the desirability of ensuring that the membership ... is broadly representative of the Australian community'. Other than that requirement, the Act places no restrictions upon appointment to the Board. Similarly, the Act adopts a flexible approach to the procedure to be adopted by the Board in making classification decisions; s 56 provides that the procedure of the Board is 'as determined by the Director'. The Review Board is constituted by s 72 of the Act. It consists of a Convenor, a Deputy Convenor, and at least three, but not more than eight, other members (s 73). The Review Board's function is to review classification decisions made by the Board, upon application of one of the persons specified in s 42(1) --- including the Attorney-General as the Minister responsible for administering the Act (s 42(1)(a)). Section 74 of the Act contains the same requirement for appointment to the Review Board as appears in the equivalent provision regarding appointment to the Board, namely that regard must be had to 'the desirability of ensuring that the membership ... is broadly representative of the Australian community'. As is the case with the Board, the Act imposes no other restrictions on appointment. Although the purpose of the Review Board is to 'review' decisions made by the Board, s 44 of the Act requires that the review be conducted in the same way as the Board deals with an application for classification of a publication, film or computer game or for approval of an advertisement. Although the Convenor is responsible for ensuring that the business of the Review Board is conducted in an orderly and efficient way, and may give directions as to the arrangements of the Review Board's business (s 77), in conducting that business the Review Board does not have any powers or functions which are additional to those which the Board possessed when making the decision that is the subject of its review. Section 9 of the Act requires the Board --- and hence the Review Board --- to classify publications, films and computer games 'in accordance with the Code and the classification guidelines'. The 'Code' to which s 9 refers is the Code as originally set out in the Schedule to the Act and amended from time to time in accordance with s 6 of the Act. The Classification Guidelines are determined by the Attorney-General (with the agreement of each participating Minister under the State and Territory co-operation arrangement) to assist the Board in applying the criteria in the Code (s 12). The remarks of the Board in relation to both publications are set out below. The subject matter of the 70 page tract concerns an examination of the Islamic concept of "Jihad" largely as it related to the conflict in Afghanistan in 1987. It was designed as a call to arms against that invasion which was condemned by much of the Western world, including Australia, UK and USA. Its main aim, however, is to clarify, through the use [of] classical sources of Islam, the concept and manner in which jihad --- or Islamic holy war --- should be prosecuted. Other than applying for review of the decisions, the Attorney did not take an active role in the review process, making no written or oral submissions. The Review Board permitted the applicant in these proceedings to make both oral and written submissions in relation to the Review Board's review of the publications. However it was reprinted in 1996 and August 2001 with the addition of the publisher's foreword, details on Abdullah Azzam [the author] and (possibly) Part Three: Clarifications about the issue of Jihad today (although this is unclear). In the publication before the Review Board, following the conclusion is part three, a glossary and quotations from Salahuddin Ayyubi (Saladin). The Review Board noted that the author of the book, Sheikh Abdullah Azzam, was often referred to as the 'Godfather of Jihad', whose motto, quoted in the book, was 'Jihad and rifle alone. No negotiations, No conferences and No dialogue'. The Review Board was satisfied that the objective purpose of Join the Caravan was to promote and incite actions of precisely this type. In the summary of its decision on Join the Caravan , the Review Board stated that the book's cumulative impact drew the reader to the conclusion 'that Jihad is an obligation of Muslims', and took its reader 'down a narrow path with the conclusion being that it is obligatory to go out and commit the crime of terrorism, particularly suicide bombing and other operations where death to the perpetrator is the likely outcome'. Accordingly, the Review Board classified the publication 'RC'. The original translation was undertaken in 1996 by the Mujahadeen in Bosnia "with a view to encouraging the English speaking Muslims to come to the assistance of their fellow Muslims there. It justifies the concept of "Jihad" in the context of fighting the USSR as per the author's words and with the addition of the publisher's comments "to all similar situations facing the Muslims" today (as at September 2002). The Review Board placed particular emphasis on pp 64 and 65 of the book, and the concluding paragraph on p 93. It also calls upon Muslims to become involved in this type of operation to overcome the "disbelievers". "Fighting for Islam" is held in the highest esteem as described in the quote on page xvi: "Standing for an hour in the ranks of battle waged for the Sake of Allah is better than standing in prayer for sixty years". The Review Board also referred to s 101.1 of the Criminal Code , taking the view that the objective purpose of Defence of the Muslim Lands was to promote and incite actions of the type proscribed by that section and the definition of 'terrorist act'. That each decision involved an error of law --- four such errors were identified. 2. That each decision was an improper exercise of the power conferred on the Review Board by s 44 of the Act by failing to take into account a relevant consideration in the exercise of that power --- three such considerations were identified. 3. There was no evidence or other material to justify the making of each decision. 4. Each decision was not authorised by the Act in pursuance of which it was purported to be made. The Film and Literature Board of Review ('the NZ Board') determined that a book called The Seventh Acolyte and various photographs were objectionable within the meaning of s 3 of the FVPC Act. There was an appeal to a single judge and a subsequent appeal to the Court of Appeal. The Court of Appeal upheld the appeal on the basis that the NZ Board's decision contained no discussion and no reasons as to why the publication 'promoted' the sexual exploitation of children (Judgment [26] and [28]). The concepts denote an effect which advocates or encourages the prohibited activity, to borrow the words of Rowles J of the British Columbia Court of Appeal in an allied context in R v Sharpe (1999) 136 CCC 3d 97 judgment given on 30 June 1999 at para 184. Description and depiction (being the words used in s3(3)(a) of the Act) of a prohibited activity do not of themselves necessarily amount to promotion of or support for that activity. There must be something about the way the prohibited activity is described, depicted or otherwise dealt with, which can fairly be said to have the effect of promoting or supporting that activity. It is not apparent from the board's decision how the nine stories, which described sexual activity between men and boys under the age of 16, had the effect of promoting or supporting the exploitation of children or young persons for sexual purposes in the sense of advocating or encouraging that exploitation. 1 , the publication was sent back to the NZ Board for reconsideration in accordance with the Court of Appeal's judgment. Moonen No. 2 was an appeal against the NZ Board's reconsideration. The NZ Board again found the book and some (but not all) of the photographs objectionable. In accordance with the meaning attributed to the words 'promote or support' by the Court of Appeal in Moonen No. 1, the NZ Board found the material objectionable because: (a) in relation to the books, the stories would have had the effect of encouraging those who might consider engaging in such activities ([17]); (b) the photographs, depicting children as sexual objects, had the effect of encouraging the exploitation of children as if it were a normal and acceptable activity ([18]). The Court of Appeal dismissed the appeal, finding that the NZ Board and the single judge of the High Court had correctly stated and applied the law laid down in Moonen No. The exact shade of meaning required in a particular case is thus, in our view, a matter for the expert classifying body to assess. However, a publication should not be seen as tending to promote or support a specified activity unless there is a real or material or substantial risk, as assessed by the expert classifying body, that it will do so (see, in another context, the definitions of "likely" set out in R v Piri [1987] 1 NZLR 66 at p 79 and R v Meynell [2004] 1 NZLR 507 at p 517. In support of its submission that a publication does not incite in matters of crime or violence unless the publication had an effect of the kind in (ii) of [23] above, the applicant referred to what was said by the New South Wales Administrative Decisions Tribunal ('the Tribunal') in a case under the Anti-Discrimination Act 1977 (NSW): Western Aboriginal Legal Service Limited v Jones [2000] NSWADT 102. One of the issues that arose in the case was the meaning of 'incite' in s 20C of the Anti-Discrimination Act . The Tribunal accepted that the proper approach was to look at the Macquarie Dictionary definition of 'incite' and to give the word its ordinary and natural meaning. Brutus v Cousens [1972] UKHL 6 ; [1973] AC 854 is often cited as authority for the proposition that ordinary words, when used in a statute, should be given their ordinary and natural meaning. We don't believe that the word "incite" is used in section 20C(1) with any special legal meaning or with a non-legal technical meaning. Thus, the approach taken by the Tribunal in Harou-Sourdon to look at the dictionary meaning of the word seems correct. Unfortunately that dictionary meaning does not resolve the problem before us because part of the definition --- "to urge on" --- seems to suggest that intending to produce a result in the audience is a necessary part of inciting, whereas the second part of the definition --- "stimulate or prompt to action" --- appears to look to the effect upon the audience rather than to the intention of the person who incites. It is the capacity of the public act performed by a person which is significant, rather than the intent of the person who performed that act. Further, it is the likely effect rather than the actual effect of the public act which is significant . In some instances evidence of actual effect may be of relevance when considering remedies. The applicant sought to bolster its argument that the phrase 'promotes or incites' requires regard to be had to the effect of the publication by referring the Court to more general principles relating to the construction of statutes which seek to impair or abrogate a fundamental right such as freedom of expression. Thus, if the author of the books had the purpose of promoting or inciting crime or violence yet the books did not or were not likely to have that effect, no overriding public purpose would be served by banning the sale of the books. This is particularly so where the ideas contained in the books are said to be at the frontline of the 'battle of ideas' to which the Federal Government refers in its 2004 White Paper entitled 'Transnational Terrorism: the Threat to Australia' . To ban the books deprives Australians of the opportunity of reading the material and making up their minds as to the extent of the threat from terrorism and the ideas at conflict in the so-called 'battle'. This approach to the interpretation of the Code, the applicant submitted, is on all fours with the approaches adopted, particularly in the joint judgment of Gummow and Hayne JJ, but also in the judgment of Kirby J, in Coleman v Power . Coleman v Power concerned s 7(1)(d) of the Vagrants, Gaming and Other Offences Act 1931 (Qld). The appellant argued that the section breached the implied freedom of political communication (to use a shorthand expression). In order to determine whether the section breached the implied freedom, it was necessary to first construe the section. In construing the legislation, Gummow and Hayne JJ, in their joint judgment, made a number of points which, according to the applicant, impact upon the exercise of statutory interpretation required in the present case. The offence which it creates restricts freedom of speech. That freedom is not, and never has been, absolute. But in confining the limits of the freedom, a legislature must mark the boundary it sets with clarity. Fundamental common law rights are not to be eroded or curtailed save by clear words. The United States decisions about so-called "fighting words" find no direct application here. The United States references to "narrowly limited" definitions of speech which can be proscribed find echoes in the application of well-established principles of statutory construction to the Vagrants Act. Once it is recognised that fundamental rights are not to be cut down save by clear words, it follows that the curtailment of free speech by legislation directed to proscribing particular kinds of utterances in public will often be read as "narrowly limited". The preferred construction should, therefore, be one which is reasonably and appropriately adapted to serve the legitimate public need for order and security ([195] --- [197]). According to the applicant, these four points are directly applicable when one comes to interpret the words 'promote or incite' in the present case. They support an interpretation of the words which looks not only at the words and the purpose of the author, but of the effect or likely effect of the words. While the Board and the Review Board are required to give effect to this principle when making classification decisions, the insertion, in the opening phrase, of the qualification 'as far as possible' recognises that there may be occasions when other community concerns take priority over the general freedom of adults to 'read, hear and see what they want'. Paragraphs (b), (c) and (d) are concerns of this nature. Not every publication, film or computer game will raise any conflict between these principles; where the content of a publication, film or computer game produces such a conflict, it is the task of the Board, and the Review Board, to evaluate where the balance between these competing principles is best struck. The Code contains a table for each category of material that is subject to classification under the Act and the Code. The table sets out each classification category and a corresponding description of the types of material that will fall within their purview. The decision of the Review Board that was the subject of Brown relied upon the same paragraph. Although primarily concerned with the meaning of 'instruct', the Attorney submitted that the approach of the Court in Brown to the construction of that word is instructive for the interpretation in this case of the words 'promote' and 'incite'. According to the Shorter Oxford English Dictionary , to promote is to further the growth, development, progress or establishment of (anything); to further advance, encourage. To incite, is to urge or spur on; to stir up, instigate, stimulate. To instruct, is relevantly to furnish with knowledge or information; to teach or educate. Reflecting the theme of promotion or incitement the provision of information on matters of crime will constitute instruction if it appears from the content and context of the article, objectively assessed, as purposive, the relevant purpose being to encourage and equip people with the information to commit crimes. So construed, this provision of the Code in my opinion seeks by reasonable and appropriate means to protect the rule of law which is of the essence of democratic society with representative and responsible government. Still less is the actual intent of the author or publisher relevant. The [test] is an objective one. The content of the publication is, after all, the focus of the classification process. A construction of para (c) of Item 1 of the publications table in the Code that requires separate consideration of the effect, likely or actual, of a publication shifts the focus from the content of the publication to a speculative consideration of whether, notwithstanding that its purpose, objectively determined, is to promote or incite crime or violence, the publication has that actual or likely effect. According to the Attorney's submission, the Court's approach in Brown is also consistent with the absence of an express requirement in para (c) that the Board or Review Board examine the effect of a publication. The terms of para (c) can be contrasted with para (a), which requires the publications to deal with the matters described in the paragraph 'in such a way that they offend against the standards of morality, decency and propriety generally accepted by reasonable adults to the extent that they should not be classified'. Similarly, para (b) requires the publication to describe or depict a person who is, or appears to be, a child under 18 'in a way that is likely to cause offence to a reasonable adult'. In that situation, assessing the content in accordance with the standards and sensibilities of reasonable adults will strike an appropriate balance between the general principle that adults should be able to read, hear and see what they want, and the competing community concerns about such matters as drug misuse or addiction, crime, cruelty or violence. By contrast, the Attorney continued, the concern addressed in para (c) is not a matter of general community sensibilities, but relates rather to community safety. The absence of an express requirement to consider the effect of a publication that 'promotes, incites or instructs in matters of crime or violence' can to some degree be explained by the possibility that a publication that has such a purpose, objectively determined, will provoke the commission of the very matter of crime or violence promoted or incited, or in respect of which the reader is instructed. The potential for a publication satisfying the description in para (c) to have such an 'effect' --- indeed serious consequences --- is built in to the description of the activities outlawed by the paragraph. It may be, the Attorney submitted, that when faced with a publication that could fall within para (c), the Board or Review Board will consider the potential effects of the publication; contrary to the submissions of the applicant, the Review Board in fact did so in this case. However, it need not do so. Rather than leave any possibility to chance, the legislature has adopted the course of requiring that a publication that promotes, incites or instructs in matters of crime or violence be refused classification. The authorities relied upon by the applicant in support of the meaning of the words 'promote' and 'incite' do not lead to a contrary conclusion. The Attorney submitted that the cases cited by the applicant in respect of the meaning of the word 'promote' are all decisions of the New Zealand Court of Appeal in respect of the construction of the FVPC Act . The phrase in that Act which was at issue in these cases was 'promotes or supports, or tends to promote or support', which appears in s 3(2). As Tipping J noted in Moonen (No. 1) (at [16]), the Court's construction of those words had to accommodate the provisions of the New Zealand Bill of Rights. It is inevitable in a censorship context that some limit will be placed on freedom of expression, but the combined effect of ss 5 and 6 of the Bill of Rights results in a need to put on the words "promotes or supports" such available meaning as impinges as little as possible on freedom of expression. McGrath and Glazebrook JJ noted that the use of the words 'tends to' was 'designed to provide a sliding scale so as to ensure that it was not necessary for the classifying authority to come to the view that the publication's effect was definitely to promote or support the specified activities' (at [100]). In construing those words, their Honours were mindful of the 'Moonen (No. 1) principles' as to adopting a meaning 'which impinges the least on freedom of expression' (at [102] --- [103]). The Attorney submitted that in Western Aboriginal Legal Service Limited v Jones , the Tribunal considered the meaning of the word 'incite' in a different statutory context to that at issue in this case. Section 20C(1) of the Anti-Discrimination Act declares it 'unlawful for a person, by a public act, to incite hatred towards, serious contempt for, or severe ridicule of, a person or group of persons on the ground of the race of the person or members of the group'. The primary issue for the Tribunal was whether the word 'incite' incorporated an intent element. As the applicant acknowledges in [79] of its written submissions, having considered that the 'ordinary meaning' of 'incite' was unclear, the Tribunal had regard to extrinsic materials in order to properly define it in the particular context of s 20C(1) , including the Second Reading Speech and a report by the New South Wales Law Reform Commission on its review of the Act (at [86] --- [87], [89]). The Attorney submitted that in classifying Join the Caravan and Defence of Muslim Lands 'RC', the Review Board considered them as a whole. In accordance with the construction of the paragraph settled upon by the Full Court in Brown, the Review Board found that the objective purpose of both publications was to promote and incite in matters of crime or violence. In particular, the Review Board took the view that the purpose of the publications was to incite actions of the type proscribed in s 101.1 of the Criminal Code . Although the main text of the publications was written before the enactment by the Commonwealth of the terrorism provisions, the Review Board considered that their republication, together with additional material explaining the relevance of the text in modern times, gave the books 'a contemporary relevance and context'. Finally, the Attorney submitted that even if his construction of para (c) of Item 1 of the publications table in the Code were not accepted, and consideration of the effect of a publication was in fact required before a publication could be properly described as promoting or inciting crime or violence, the Review Board clearly undertook such consideration in this case. It noted, for example, that the publisher of Join the Caravan described the book as 'one of the principal inspirations for thousands of Muslims from all over the world to go and fight in Afghanistan'. It considered the book to be 'specific and explicit in its support for and encouragement of fighting against non-believers', and was 'an impassioned plea to Muslims to fight for Allah and engage in acts of violence, specifically in Afghanistan but also elsewhere'. The book Defence of Muslim Lands contained passages which described martyrdom operations and an analysis supporting such operations as legal. The Review Board considered that both publications had the potential to appeal 'to some disenfranchised segments of the community', and were 'designed to encourage people to take up arms and commit specific crimes against non-believers, in the cause of Islam'. encourage. '; and in the case of the word 'incite' to the meaning: 'to urge or spur on; to stir up, instigate, stimulate'. It was submitted that the definitions of the words themselves contain a requirement to look to the effect or likely effect of the action, in this case publications of the books. I reject this submission. There is nothing in the definition of either word which requires one to look to the effect or likely effect of the relevant action. More fundamentally, the terms of para (c) of Item 1 of the Code dealing with those publications which are to be classified 'RC' cannot be construed by reference to para (c) alone, but are to be construed by reference to the context ( CIC Insurance Limited v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ) of the similar mandatory 'RC' classifications, namely, those in paras (a) and (b) as well. The terms of all three paragraphs are set out in [54] above. I do not agree. The approach to interpretation identified by the maxim noscitur a sociis (the meaning of a word is affected by its companions) is only to be used when the meaning of word is ambiguous or unclear. See Commissioner of Taxation v Whitehouse [1961] HCA 10 ; (1961) 104 CLR 25 at 31 per Dixon CJ, Fullagar and Kitto JJ and R v Morton (1986) 42 SASR 571 at 575. I do not think "instruct" has either of those qualities. Thus par (a) deals with publications which, for example, describe matters of drug misuse "in such a way that they offend ...". Paragraph (b) deals with publications which describe or depict a minor in a way that is "likely to cause offence" to a reasonable adult. Paragraph (c), by contrast, does not require that the publication have any effect or likely effect on the reader. The absence of such a requirement, when it has been included in pars (a) and (b), is a clear indication that it is not to apply to publications falling within par (c). In the applicant's submission, the term 'violence' in the Code means violence in Australia only. When Commonwealth legislation describes a matter in general words, according to the applicant it is presumed that the meaning of the words is confined to Australia (per Dixon J in Wanganui-Rangitiki Electric Power Board v Australian Mutual Provident Society [1934] HCA 3 ; (1934) 50 CLR 581 at 601. See also Pearce D and Geddes R, Statutory Interpretation in Australia (Butterworths, 2006) at [5.8]). According to the applicant, there is nothing in the Act or Code which indicates a contrary intention for the purposes of the common law or statutory presumption. The purpose of the Act and Code is to protect the Australian community from the effects of certain publications. That purpose is consistent with the application of the presumption. It applied a test whereby it did not matter whether the violence was connected to Australia. The Review Board found that the publications 'may appeal to some disenfranchised segments of the community' and that 'the book was designed to encourage such people to take up arms and commit specific crimes against non-believers'. In making these findings the Attorney submitted that the Review Board clearly addressed itself to the audience, in Australia, to which the instructions and exhortations in the publications might appeal. An exhortation of violence expressed in general terms falls within the 'RC' classification; it does not need to be directed specifically to violence in Australia. Hence, an exhortation to take up arms against non-believers can constitute the promotion or incitement of violence within Australia, by reason of the existence of such 'non-believers' in Australia. In any event, according to the Attorney, the Review Board's references to violence were not an essential element of its reasoning. In a 'note' to its decision, the Review Board refers to s 101.1 of the Criminal Code , which expressly picks up s 15.4 and thus extends the geographical operation of the provision beyond the Australian territory (thereby providing the 'contrary intention' referred to in subs 21(1)(b) of the Acts Interpretation Act ). Fighting for the Taliban in Afghanistan against the Government of that country, as well as being an act of violence, is also a crime under the Criminal Code . If a book, proposed for publication in Australia, was found to incite Australians to go and fight for the Taliban in Afghanistan, the Review Board would be entitled to find that the publication, in the language of the Code, 'incited ... in matters of crime'. Australians fighting for the Taliban in Afghanistan would constitute a 'terrorist act', within the meaning of s 100.1 of the Criminal Code , and thus an offence under s 101.1. 80 According to the Attorney, the presence of 'or', rather than 'and', in the phrase 'matters of crime or violence' means that it was not necessary for the Review Board to decide whether a publication of this type also incited 'in matters of ... violence'. Its finding based on crime was sufficient to sustain its decision. I cannot agree. The Review Board's findings that the publications 'may appeal to some disenfranchised segments of the community' and that 'the book was designed to encourage such people to take up arms and commit specific crimes against non-believers' are addressed to the audience, in Australia, to which the instructions and exhortations in the publications might appeal. I agree with the Attorney's submission that an exhortation to take up arms against non-believers can constitute the promotion or incitement of violence within Australia, by reason of the existence of such 'non-believers' in Australia. In any event, even if a publication does not promote, incite or instruct in matters of violence, it may still be classified 'RC' under para (c) of Item 1 of the publications table in the Code if it promotes, incites or instructs in matters of crime. The Attorney correctly notes that para (c) reads 'crime or violence' not 'crime and violence'. In its review of each publication, the Review Board noted that s 101.1 of the Criminal Code makes it a crime under Australian law to engage in a 'terrorist act', whether the 'terrorist act' is engaged in within Australia or outside Australia. The Review Board found that the purpose of each publication 'was to promote and incite actions of precisely this type', being 'terrorist acts'. This conclusion is of itself sufficient to ground a 'RC' classification, regardless of the Review Board's finding as to promotion, incitement or instruction in matters of violence. For these reasons, this alleged error cannot be sustained. Thus, in order to find that the books incited or promoted the crime of engaging in a terrorist act, the Review Board was required to consider whether each book incited or promoted the performance of each element of that crime as defined. It follows, in the applicant's submission, that incitement or promotion of the crime of engaging in a terrorist act involves: inciting or promoting action having one of the effects listed in subs (2) of the definition of terrorist act, which will not be action that falls within subs (3); in circumstances or in a manner where such action will be attended by the motivation prescribed by para (b); and in circumstances or in a manner where such action will occur with the intention prescribed by para (c). According to the applicant, the Review Board's findings and reasoning arguably address promotion or incitement of two elements of the offence of committing a terrorist act, namely, the causing of harm (the question under subs (2) of the definition of 'terrorist act') and the requirement that the publications have the intention of advancing a political, religious or ideological cause (the question under para (b) of that definition). The reasoning may also be said to deal with whether the causing of harm would be attended by the intention defined in para (b). However, in the applicant's submission, at no point in its reasoning did the Review Board consider the following elements: (a) whether the actions advocated by the book were advocated to occur with the intention of coercing, or influencing by intimidation, the Government of the Commonwealth or a State or Territory or foreign country or of part of a State, Territory or foreign country; or intimidating the public or a section of the public (the issue under para (c) of the definition of 'terrorist act'); or (b) whether the actions advocated by the book may fall within subs (3) of the definition and therefore be excluded from the scope of the offence. The Board applied a wrapped up test of what is 'terrorism' and a 'terrorist act'. It proceeded on the basis that it was sufficient if the publication incited or promoted the causing of serious harm with the intention of advancing a political, religious or ideological cause. Consequently, in the applicant's submission, the Board applied the wrong test of what is required to incite or promote the crime of 'engaging in a terrorist act'. In order to be refused classification, a publication need only promote or incite 'in matters of crime or violence'. It does not need to promote or incite all of the elements of a crime. A requirement of that nature would impose an unduly onerous burden on the members of the Review Board. The provisions governing eligibility for membership of the Review Board do not suggest Parliament had intended that it would have to undertake technical assessments of the kind suggested by the applicant. Further, and in any event, contrary to the assertion of the applicant referred to in [90] above, the Attorney submitted that the Review Board clearly took the view that the actions described in the books would, if carried out, be intended to advance a religious, if not political or ideological, cause (subs 100.1(1)(b)). It also found that the actions advocated by the books were intended to intimidate the public or a section of the public (subs 100.1(1)(c)), and would, if carried out, cause 'serious harm to a person, serious damage to property, death' or the endangerment of a person's life (subs 100.1(2)). It expressly found that 'the objective purpose' of both books 'was to promote and incite actions of precisely this type'. In circumstances where the activities promoted in the book were intended to cause the harm to which the Review Board referred, there could be no question of them falling within subs 100.1(3). According to the Attorney, construing the absence of a reference to that subsection in the Review Board's reasons as an error of law would be to fall into the error cautioned against by French J in Brown (at 240) , of judicialising the administrative decision-making processes of the Review Board 'by imposing rigorous standards of detailed explanation'. In its reasons in relation to each book it referred to the fact that it had regard to s 101.1 of the Criminal Code which provides that 'a person commits an offence if the person engages in a terrorist act'; it set out the elements of the definition of 'terrorist act' in s 100.1 --- in particular those in paras 101.1(1)(b) and (c) and 101.1(2)(a), (b), (c) and (d). It did not refer to subs 101.1(3) --- action which is excluded from being a 'terrorist act' --- no doubt because, in its words, it '... was satisfied that the objective purposes of Join the Caravan/Defence of the Muslim Lands was to promote and incite actions of precisely this type', that is, of the type going to make up the elements of the offence. The fact that the Review Board's conclusion was expressed holistically rather than by reference to each element provides no greater foundation for an allegation of error of law than does the absence of a reference to subs 100.1(3) in the Review Board's reasons. There is, as the Attorney submitted, a danger of the kind warned against by French J in Brown (at 240G), namely, of judicialising the administrative decision-making processes of the Review Board 'by imposing rigorous standards of detailed explanation'. This alleged error also cannot be sustained. The applicant submitted that the Review Board was obliged to address two parts of the statutory regime. The first is prescribed by s 11 of the Act which required the Review Board to take into account four matters: see [8] above. The second part was the obligation on the Review Board imposed by s 9 of the Act to make that decision 'in accordance with' the Code and the Classification Guidelines. There are two relevant provisions of the Code. Clause 1 is extracted at [53] above. Clause 2 provides that publications which 'promote, incite or instruct in matters of crime or violence' are to be classified 'RC'. The applicant submitted that, consistent with the High Court's approach in Transport Publishing Co Pty Ltd v The Literature Board of Review [1956] HCA 73 ; (1956) 99 CLR 111, the Review Board was obliged, in deciding whether either book promotes, incites or instructs in matters of crime or violence under the Code, to take into account the four matters prescribed in s 11 of the Act: see [8] above. A failure to take into account any of the matters prescribed by s 11 would be a failure to take into account a mandatory consideration constituting reviewable error. In addition, the applicant submitted that the application of a construction of 'promotes, incites or instructs in matters of crime or violence' which did not permit each of those s 11 factors to bear on the conclusion of whether the book promotes, incites or instructs in matters of crime or violence would constitute the application of a wrong legal test which would be a reviewable error. In this case the approach to interpretation outlined above is also required because the Code and the Classification Guidelines are delegated legislation made under the Act by the Attorney with the concurrence of State and Territory ministers (ss 6 and 12). If, and to the extent that, the Code or the Classification Guidelines would otherwise be interpreted as permitting or requiring the making of a classification decision without taking into account each of the matters specified in s 11, they would be inconsistent with a mandatory provision of the statute under which they are made. According to the applicant, they should be interpreted as having a meaning consistent with s 11. The Review Board did not consider that question except by reading the books (and the other material referred to in [40]) and concluding that the books 'did not have any discernible educational ... merit' (emphasis added). The applicant submitted that a finding that the books have no educational merit is absent from the Review Board's reasons. In the context of the findings about the nature of each book, reproduced at [11] and [17] above, the applicant submitted that the consideration of the educational merit (if any) of the publications required a consideration of the contribution, if any, made or potentially made by either book to the field of Islamic studies at least within established educational institutions in Australia. (2) As part of the course material in a course on Jihadist literature: the effect of the decisions under review is said to make it hard to understand why Azzam is 'so out of synch with the long history of jihad without reading what he says'. Had the Review Board undertaken such an inquiry, the applicant continued, its conclusion may well have been different. The reading of the books in the contexts of which Dr Pennell speaks, far from inciting or promoting violence, contributes to the 'battle of ideas' against the ideas contained in the books. In Transport Publishing the High Court considered a similar criterion of the persons, classes of persons, and age groups to or amongst whom that literature is or is intended or likely to be distributed. In any event, consistent with Transport Publishing , consideration of the subs 11(d) criterion required, in the applicant's submission, consideration of evidence extraneous to the publications themselves. He was advised in my presence that most of these titles were taken off the shelf after the publication of the inflammatory article by one of the Sydney tabloids last year. The manager of the bookshop advised that they wish to avoid controversy and whilst the contents of these books were in his view misrepresented by the media, the proprietors felt that self-censorship was the course of action that better served social harmony and cohesion in the present atmosphere that seems very emotive when it comes to issues related to in Islam. According to the applicant, it says nothing of the statutory question posed by s 11(d). In the applicant's submission, the Court needs to consider whether the Review Board's conclusions may have been different had it inquired into the question of the persons or class of persons to or amongst whom each book is published or is intended or likely to be published. The applicant's answer is that it may have been --- for two reasons. First, consistent with Dr Pennell's publication, the Review Board may have concluded that the books would have been published to students of Dr Pennell and others (such as Mr Bulbalo and Dr Fealy (Bulbalo A and Fealy Dr G, Joining the Caravan: the Middle East, Islamism and Indonesia (Lowy Institute Paper, 2005))) engaged in academic study of Islamism and that in that context there was no likelihood of inciting or promoting any form of violence. Second, a determination of the persons or class of persons to or amongst whom each book is published or is intended or likely to be published would have permitted and required a more focused and nuanced consideration of the ultimate issue. According to the applicant, the conclusion that the books incite and promote in matters of crime and violence, like the question in Transport Publishing , falls into two parts. In that case the majority considered the tendency of the literature to deprave or corrupt. those amongst whom the literature is distributed] important distinctions must be observed. For the question necessarily has two aspects or falls into two parts. With reference to the second of these it may be said at once that ordinary human nature, that of people at large, is not a subject of proof by evidence, whether supposedly expert or not. This may be because they are abnormal in mentality or abnormal in behaviour as a result of circumstances peculiar to their history or situation. In doing so, the argument continued, it may or may not be the case that the Review Board would be entitled or required to consider evidence based on study or special knowledge about people with those characteristics. For example, if the books are published, or are intended or likely to be published, only to Dr Pennell's students, Dr Pennell would presumably be able to inform the Review Board of the characteristics of those students, which would enable an assessment of the effect or likely effect of that publication on those students. Alternatively, if the books are published, or are intended or likely to be published, to a class of persons being potential terrorist recruits, presumably the Attorney will be in a position to provide information to the Review Board on the characteristics of that class. In both examples, the Review Board could not, in the applicant's submission, lawfully come to its ultimate conclusion without considering the characteristics of members of such particular classes of people. In making its decision to classify the publications 'RC', the Review Board considered the educational merits of the publications, and the persons or class of persons to or amongst whom they were intended or likely to be published. The Review Board's consideration of these matters effectively nullifies the applicant's submission that the Review Board's approach to para (c) of Item 1 in the publications table in the Code precluded consideration of the so-called 's 11 factors' and accordingly constituted the application of a wrong legal test (see [108] and [110] above). The Attorney submitted that if this were the required consideration, any publication, film or computer game could be characterised as having educational merit so long as it could conceivably make a contribution to some field of study in an established educational institution, however that term is defined. By way of example, the Attorney submitted that a publication containing child pornography would, on the applicant's characterisation of subs 11(b), have educational merit provided it could make a contribution to a field of study, such as psychology, medicine or criminology. The applicant submitted that this Court needs to consider whether the Review Board's conclusions may have been different had it inquired into the whole question of educational merit. According to the Attorney, that submission overstates the Court's role in reviewing administrative decisions generally, and decisions of the Review Board in particular. In doing so, the applicant seeks to impose on the Review Board, and the Board, a duty to inquire which does not appear either expressly or by implication on the terms of the Act. As Wilcox J noted in Prasad v Minister for Immigration & Ethnic Affairs (1985) 6 FCR 155 at 169 --- 170, the circumstances in which an administrative decision will be invalid for failure to inquire are 'strictly limited'. His Honour considered that it was only in cases where it was 'obvious that material is readily available which is centrally relevant to the decision to be made' where proceeding to a decision without attempting to obtain that information may properly be described as unreasonable in the Wednesbury sense ( Associated Provincial Picture House v Wednesbury Corporation [1947] EWCA Civ 1 ; [1948] 1 KB 223 at 169 --- 170). The task of the Board and the Review Board, according to the Attorney, is to classify material in respect of which applications for classification are made. The Act, and the Code and the Classification Guidelines made under that Act, guide the Board and the Review Board in their assessment of the content of material submitted to them by specifying particular considerations that are to be taken into account, particular principles to which they should have regard, and the requirements of particular classification categories. The confined nature of the classification process is consistent with the directive, in s 9 of the Act, that 'Publications, films and computer games are to be classified in accordance with the Code and the classification guidelines'. The Review Board does not have a duty to undertake an inquiry as to what material may exist --- in established educational institutions or elsewhere --- which may shed some light, no matter how insubstantial, on the educational merit of a particular publication, film or computer game. The Attorney's submission is that the question of whether a publication has educational merit is a question of fact for the determination of the Board or Review Board. All that subs 11(b) requires is that the Review Board consider the question. In this case, the Review Board determined that the publications had no discernible educational merit. That conclusion was open to it in respect of both publications. The applicant's characterisation of the adjective 'discernible' as going no further than saying that by reading each book the members of the Review Board did not discern any educational or literary merit, takes the Review Board far enough for the purposes of satisfying subs 11(b). This Court, the Attorney submitted, should only interfere with that conclusion if it was not reasonably open on the material before it: see Brown at 258G per Sundberg J. Contrary to the applicant's submission that the Review Board did not take this consideration into account, the Attorney submitted that the Review Board found that both books 'may appeal to some disenfranchised segments of the community'. In the Review Board's opinion, the books were likely to find a market amongst this class of persons. Its expression of that opinion is indicative of consideration of the persons or class of persons to or amongst whom the books were intended or likely to be published. The applicant's assertion that the Review Board's comment is no more than 'a statement of the Board's view of the nature of the publication' is a semantic quibble of the type against which the High Court counselled in Wu Shan Liang v Minister for Immigration & Ethnic Affairs [1996] HCA 6 ; (1996) 185 CLR 259. The applicant submitted, by reference to the High Court in Transport Publishing , that the Review Board should have had evidence before it, other than the publications themselves, to enable it to consider the criterion in subs 11(d) (see [121] --- [122] above). According to the Attorney, that submission rests upon an oversimplification of the legislative context in which the High Court made the comment, in Transport Publishing, that evidence was necessary on the question of 'the persons amongst whom the literature is distributed'. The Attorney pointed out that, in Transport Publishing , the Literature Review Board of Queensland had prohibited the distribution of certain publications on the basis that they were, in the opinion of the Board, 'objectionable', as that term was defined in the Objectionable Literature Act 1954 (Qld) . Pursuant to that Act, an appeal from that decision lay to the Supreme Court; for the purposes of that appeal, the decision was to be treated as if it were an order made by judges. Further, s 11 of the Objectionable Literature Act provided that the Court reviewing the decision 'shall determine as an issue in the appeal the matter of whether or not the literature in question ... is objectionable under and within the meaning of this Act and, in respect of that determination, shall not be bound by the opinion of the Board'. As the Court noted, the effect of this provision was that 'the cardinal question of fact ... upon which the order of the board must depend' was 'placed wholly within the determination of the court' (at 114). The need for the court to be satisfied by evidence is one thing; according to the Attorney, it is another thing altogether to subject an administrative tribunal to the same requirement. In any event, the Court in Transport Publishing stated that however much assistance could be sought in extrinsic evidence, it could be no substitute for 'the judgment of the court on the literature itself' (at 116). The Attorney submitted that the applicant advanced the same submission as it did in respect of the consideration required by subs 11(b), namely that the Court needs to consider whether the Review Board may have reached a different conclusion 'had it inquired into the question of the persons or class of persons to or amongst whom each book is published or is intended or likely to be published'. The Attorney relied upon his response to this argument above. The terms of subs 11(d) do not require any such inquiry to be made. Contrary to the assertion of the applicant in [129] above, the Review Board did not 'find' that neither of the two publications would appeal to members of the Australian community generally. The applicant's assertion, according to the Attorney, rests upon an unfounded assumption that because the Review Board considered that the publication may appeal to particular segments of the community, it would not appeal to the broader community. Even if the applicant could properly argue that one could extrapolate, from the Review Board's actual finding as to particular sections of the community, a negative finding as to the community generally, such a finding would only further support the Review Board having complied with the requirement in subs 11(d) that it consider the likely audience of the publications. Clearly it did. The Review Board found that each book 'did not have any discernible educational or literary merit' (subs 11(b) of the Act) and that each book 'may appeal to some disenfranchised segment of the community'. That latter finding necessarily involves consideration of the persons or class of persons to or amongst whom the books were intended or likely to be published (subs 11(1)(d) of the Act). The applicant's real complaint seems to be that the Review Board did not make some wider enquiry, outside a reading of the books themselves, on the question of educational merit and that it erred in law in not doing so; and that the persons or class of persons to or amongst whom each book is published or intended or likely to be published, is a matter required to be proved by evidence extraneous to the publications themselves ( Transport Publishing at 118 --- 119 per Dixon CJ, Kitto and Taylor JJ) and that the Review Board erred in law in not seeking or considering such evidence. I cannot agree with these complaints. First, there was no obligation on the Review Board to make some wider or roving enquiry as to the educational or literary merit of each book, other than perhaps to have regard to 'material [that] is readily available ... [and] centrally relevant to the decision to be made' where proceeding to a decision without attempting to obtain that information may properly be described as unreasonable in the Wednesbury sense: Prasad at 169 --- 170 per Wilcox J. That is not this case. There was no attack on the Review Board's finding that neither publication exhibited any discernible literary or educational merit on the basis that such a finding was not reasonably open. Clearly it was. Second, I agree with the Attorney's submission that the applicant's complaint on the s 11(d) criterion --- lack of evidence extraneous to the publications themselves --- rests upon an oversimplification of the legislative context in which the High Court made the comment in Transport Publishing , that evidence was necessary on the question of 'the persons amongst whom the literature is distributed'. In my view, it was open to the Review Board to come to a conclusion on the subs 11(d) criterion without recourse to such extraneous evidence, and it made no error of law in not seeking or considering such evidence. It follows, in my view, that the applicant cannot succeed on this ground. If, contrary to the applicant's submissions, the Review Board did take into account the educational merit of the books, it did so without considering evidence upon which it could reasonably have been satisfied on that question, the applicant submitted. The only evidence the Review Board considered was the content of the books themselves. That could not inform an assessment of educational merit. Rather the assessment it informed was accurately stated by the Review Board: it was an assessment of discernible educational merit. If, contrary to the applicant's submissions, the Review Board did take into account the persons or class of persons to or amongst whom each book is published or is intended or likely to be published, it did so without considering evidence upon which it could reasonably have been satisfied on that question, the applicant submitted. Nothing considered by the Review Board would have enabled it to form a view on that question. The contents of the books, written in a foreign language, initially directed to a foreign audience, translated (it was found) in Bosnia, and published outside Australia cannot inform an assessment of the distribution or likely or intended distribution of the books in Australia 25 years after they were written and four years after they were last published. That conclusion is all the clearer once it is recognised that the publisher expressly disclaims any rights in relation to distribution or copying (Join the Caravan page 2 and Defence of the Muslim Lands page iv). The applicant submitted that the letter from the Mufti of the Islamic Church in Australia, excerpted at [124] above, was not considered by the Review Board in making either decision, based on its Statements of Reasons, and that no other material relevant to the matter in subs 11(d) was considered. In summary, the Attorney submitted that there was no need for the Review Board to go beyond the publications themselves in order to comply with its statutory function to classify those publications in accordance with the Act, the Code and the Classification Guidelines. It had no duty to make further inquiries as to the potential existence of extraneous materials which might in some way have informed its decision. According to the Attorney, the applicant's reliance upon the 'no evidence' ground in the ADJR Act requires an applicant either to identify a jurisdictional fact, in respect of which there is no evidence, or a non-jurisdictional fact upon which the decision was based, establish that there was no evidence of that fact and prove that the fact does not exist. The applicant has not done either of these things in its submissions under this ground. Rather, its case under this heading amounts to no more than a re-packaging of other grounds. The Review Board had no obligation to do either. The conclusions it came to on the subs 11(b) and (d) criteria were reasonably open on the material before it, namely, the publications themselves. Any ground based on 'no evidence' cannot therefore succeed. It constitutes a burden on the freedom of communication that is not reasonably appropriate and adapted to serve a legitimate end in a manner compatible with the constitutional system of representative government. The applicant referred to Lange v Australian Broadcasting Corporation [1997] HCA 25 ; (1997) 189 CLR 520 at 567, 568, where the High Court set out a two-stage test for determining whether a law infringes the constitutional implication. (2) If so, is the law reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the system of government prescribed by the Constitution ? More particularly, to the extent that the freedom of communication is an implication drawn from ss 7 , 24 , 64 and 128 of the Constitution , the implication extends only insofar as it is necessary to give effect to those sections (at 567). What Lange requires is that there be a link between the discussion of some matter and the institutions of representative and responsible government that the court has identified in the text. One of these institutions is the free election of members for the House of Representatives and the Senate. The applicant noted that there is a document in evidence that contains an extensive list of legislative measures introduced to deal with the threat of terrorism. The extent of the response is the subject of significant debate and differences of opinion. See, for example, Golder B and Williams G, "Balancing National Security and Human Rights: Assessing the Legal Response of Common Law Nations to the Threat of Terrorism" (2006) 8 Journal of Comparative Policy Analysis 43 --- 62, and, in the political sphere, see the Senate Hansard on 5 December 2005. The applicant submitted that the two books in the present case are very different from the Rabelais article under consideration in Brown (albeit that in that case French J found it to be arguable that in some respects the article would fall 'within a broad understanding of political discussion' (at 238E)). In the applicant's submission, Join the Caravan and Defence of the Muslim Lands go to the heart of one of the most profound issues facing the Australian electorate, namely, the nature of the terrorist threat and the degree to which that threat calls for measures which impact upon previously accepted rights and liberties. See Nationwide News v Wills at 77 per Deane and Toohey JJ. It submitted, correctly in my view, that the ultimate question on this aspect of the case is whether the relevant law does no more than is reasonably necessary to achieve the protection of the competing public interest invoked to justify the burden on the communication. It submitted that what is involved at this stage of the inquiry is a weighing of the detriment imposed by a law which burdens political communication against the benefit of a governmental regulation imposed for the benefit of public safety. The applicant further submitted that, at the outset of any balancing exercise, it is necessary to note that a more compelling justification is required in the case of a law which restricts ideas or information as opposed to a law which restricts the mode of communication of those ideas. In the first class of case, only a compelling justification will warrant the imposition of a burden on free communication by way of restriction and the restriction must be no more than is reasonably necessary to achieve the protection of the competing public interest which is invoked to justify the burden on communication. Generally speaking, it will be extremely difficult to justify restrictions imposed on free communication which operate by reference to the character of the ideas or information. In that publication the authors analyse 'some of the main vectors through which Islamist ideas have been transmitted to Indonesia' to propose detailed approaches for Australia's engagement with Indonesia 'to respond to the Islamist phenomenon in all its dimensions, from the spread of ideas that underpin terrorism, to the role of Islamist parties in processes of democratisation. ' The applicant submitted that there are few issues of greater importance to Australia and the Australian public than the response to Islamism in Indonesia. Australian policy formation and the knowledge of Australian voters are enhanced through the publication of informed and considered commentary on those issues (such as that undertaken by the Government in its White Paper and by Mr Bulbalo and Dr Fealy). According to the applicant, the decisions subject to review would deny to Australian resident analysts the capacity to obtain either book and thereby deny to all those outside of government the capacity to undertake and publish such an analysis informed by an understanding of the contents of the books. Absent any consideration as to the effect of these books on the Australian population or some section of the Australian population, according to the applicant there is no such compelling justification. Determining whether the law effectively burdens communication about government or political matters. 2. Identifying the object of the law and determining whether it is incompatible with the system of government prescribed by the Constitution . 3. Determining whether the manner in which the law achieves that object is incompatible with the system of government prescribed by the Constitution , in that the law is not reasonably appropriate and adapted to its end. To the contrary, the concept is confined by those provisions of the Commonwealth Constitution which require that federal elections and referenda be free and that federal electors have access to information relevant to their choice and which prescribe the federal system of responsible government --- principally, ss 7 , 24 , 64 and 128 : see Lange at 560 --- 561; see also at 567, 571, 575. According to the Attorney, as Lange made clear, the constitutional requirement of freedom of communication 'can validly extend only so far as is necessary to give effect to these sections' (at 567): see also Coleman v Power , McHugh J at [89], Kirby J at [228], Callinan J at [291] --- [292] and [294] and Heydon J at [320], [331] and [335]. The Attorney submitted that it is of the essence of the Lange test that before a law will be held invalid, it must ' effectively burden' (at 567) (emphasis added) the freedom of communication about federal government and political matters by actually tending to impair the effective operation of the constitutional system of representative and responsible government ( Coleman v Power per McHugh J at [91]). As McHugh J went on to say in Coleman v Power , '[i]n all but exceptional cases, a law will not burden such communications unless, by its operation or practical effect, it directly and not remotely restricts or limits the content of those communications or the time, place, manner or conditions of their occurrence' (at [91]). The Attorney submitted that the present Code does not so burden the freedom of communication about government or political matters. In the present case, even if one has regard to the related State laws, which give practical significance to the process of classification that takes place under the Commonwealth legislation, the Attorney submitted that no burden is placed on the freedom of communications about government or political matters. The classification scheme affects publications that promote, incite or instruct in matters of violence or crime. Communications of this nature do not fall within the constitutional freedom. The reason is simple. Such conduct is not part of the system of representative and responsible government or of the political and democratic process. No negotiations, No conferences and No dialogue'. As the motto suggests, the publications do not engage in political communications but advocate the abandonment of political change through speech and non-violent processes. Rather, resort to violence to effect change is advocated. According to the Attorney, in no way can material of this kind be characterised as advancing or facilitating Australia's system of representative government. It is not to the point, argued the Attorney, that the subject matter of the publications --- broadly, acts of terrorism by Islamic fundamentalists --- might in some way pertain to law reform questions in Australia. In APLA Ltd v Legal Services Commissioner (NSW) [2005] HCA 44 ; (2005) 224 CLR 322, the High Court rejected the plaintiffs' attempts to obtain the protection of the constitutional freedom for their professional advertisements by relating them to tort law reform. They restrict the marketing of professional services. They are communications for the purpose of the Lange doctrine. So also are communications that inform the public about government policies affecting the capacity and opportunity of individuals to enforce their legal rights. I did not understand the State and federal governments to dispute that cl 139(1) cannot validly apply to communications of these types. But so far as the communications relied on in this case are concerned, only that part of the advertisement referring to "Premier Bob Carr and Senator Helen Coonan" concerns political or governmental matters within the meaning of Lange . The rest of that advertisement concerns matters that fall outside the protection of Lange . That part of the advertisement which concerns political matter is not so intertwined with non-protected matter that it cannot be severed from it. Save in extraordinary circumstances, the rights and remedies in respect of which a personal injury legal service might be engaged will be rights and remedies existing under the law as it stood at the time an injury was sustained. A communication about any of these subjects is not a communication about government or political matters. The impugned regulations are of the former type, not the latter. They control an activity --- lawyers' advertising. They are directed at communications about events (actual or hypothetical) and about rights and remedies. They are not directed at communications about whether the happening of events should be regulated differently or whether available rights and remedies should be changed. These are reasons enough to conclude that the impugned regulations do not inhibit the freedom of communication about government or political matters. The law is not directed at communications about the nature or extent of anti-terrorism laws, which is a subject untouched by the law in issue. No part of that political communication involves promoting violence or crime; at least not one that falls within the protection implied to give effect to the provisions in the Constitution that serve to protect and promote the democratic institutions established therein. The particular calls to arms contained therein are, at best, only remotely connected to that political debate. In summary, the Attorney submitted that to the extent that the applicant relies upon the freedom of political communications to protect the publications the subject of these proceedings from the Act and the Code on the basis that the content of those publications are political speech, it must be rejected. The freedom does not extend to speech advocating violence or crime to effect changes in laws, policies or government. To the extent that the applicant's reliance is premised upon the publications being in some way relevant to the issue of anti-terrorism laws, any restriction effected by the law on political communications is remote and not direct. In the Attorney's submission, there appears to be no dispute that the primary object of the challenged law is to protect the Australian community from violence and crime. Needless to say, the object of the law is not incompatible with the system of government prescribed by the Constitution . Indeed, public safety is one of the most critical responsibilities of any government. See also Levy v State of Victoria [1997] HCA 31 ; (1997) 189 CLR 579 at 598 per Brennan CJ, 608 per Dawson J, 614 --- 615 per Toohey and Gummow JJ, 618 --- 620 per Gaudron J, 627 --- 628 per McHugh J, 647 --- 648 per Kirby J; Coleman v Power at [31] per Gleeson CJ, [l00] per McHugh J, [292] per Callinan J, [328] per Heydon J; cf. at [235] per Kirby J; Mulholland v Australian Electoral Commission [2004] HCA 41 ; (2004) 220 CLR 181 at [32] --- [33] per Gleeson CJ, [248] --- [249] and [256] --- [267] per Kirby J, [360] per Heydon J. For the corresponding position under the Canadian Charter of Rights and Freedoms, see R v Sharpe [2001] 1 SCR 45 at [96] per McLachlin CJ, Iacobucci, Major, Binnie, Arbour and LeBel JJ: 'It suffices if the means adopted fall within a range of reasonable solutions to the problem confronted'. The Attorney submitted that the circumstances which bear upon the reasonableness of the Parliament's choice of means will vary from case to case. But they will usually include the nature and importance of the legislative object and the purpose, operation and effect of the particular law, including the degree to which the law burdens the discussion of government or political matters. Where the law is directed at or involves a substantial curtailment of discussion of federal government or political matters, 'reconciliation with the constitutional implication will be more difficult': Cunliffe v The Commonwealth at 339 per Deane J. As to the distinction between laws that have the purpose of restricting discussion of government or political matters and those that merely affect it incidentally, see generally Levy v State of Victoria at 611 and 614 per Toohey and Gummow JJ, at 618 --- 619 per Gaudron J, at 645 per Kirby J. See also Coleman v Power at [326] per Heydon J; cf. at [30] --- [31] and [33] per Gleeson CJ; Mulholland v Australian Electoral Commission at [40] per Gleeson CJ. Here, the law challenged is not directed to communications about government or political matters. Depending on those matters, the extent of availability of alternative means to achieve the legislative object may also be relevant. The Act, and the Code formulated thereunder, acknowledges the primacy of the principle that adults should be able to read, see and hear what they want. At the same time, however, the Act seeks to protect the safety of the community generally, and vulnerable segments of the community in particular. It does so by ensuring that certain publications, films and computer games are refused classification, thereby prohibiting their sale and distribution pursuant to the complementary State and Territory legislation. The legislature in drafting the Act, and participating State and Territory Ministers in drafting the Code, have confined the circumstances in which a publication will be classified 'RC' within a narrow compass. Publications can only be classified 'RC' if they fall within one of the three descriptions in Item 1 of the publications table in the Code. In considering whether that classification is appropriate, the Review Board must take into account the four considerations in s 11 of the Act, in addition to the general principles with which the Code commences. The Attorney submitted that the challenged provision of the Code is reasonably appropriate and adapted to serve the legitimate end of protecting the community from potentially serious acts of crime and violence. By confining the 'RC' category to publications dealing with subject matters within a limited compass, the Code serves that legitimate end in a manner which is compatible with the system of government prescribed by the Constitution . Each member of the Full Court in Brown made findings to this effect: French J at 238G --- 239A; Heerey J at 246G and Sundberg J at 258D. Only in those circumstances does the applicant submit that this part of the Code constitutes a burden on the freedom of communication about government or political matters that is not reasonably appropriate and adapted to serve a legitimate end in a manner compatible with the constitutional system of representative government. The applicant did not accept that Brown upheld the constitutional validity of the provision challenged in these proceedings. According to the applicant, Brown considered the validity of the criterion for classification 'to instruct in matters of crime or violence'. The Full Court was not concerned with the constitutional validity of the criterion 'to promote or incite in matters of crime or violence'. This Court is not, therefore, bound by the decision in Brown to reject the submission that the provision is beyond constitutional power. According to the applicant, the passage from Heerey J in Brown set out at [180] above has to be read in relation to the facts of Brown. There was not, and could not have been, any suggestion that the Rabelais article was relevant to the political process, for the reasons given by Heerey J at 246C. The applicant submitted that a publication which advocates crime or violence may or may not be a communication about government or political matters. While advocacy of violence may not be part of a system of responsible representative government, an understanding of such advocacy (including for example the motives of those advocating violence and the likelihood of such violence occurring) may well be part of the political process. It gave an example from a different historical context. In September 1951, there was a referendum held in Australia by which the government of the day sought to ban the Communist Party. They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions. Let the ruling classes tremble at a communist revolution. The proletarians have nothing to lose but their chains. They have a world to win. The Attorney points to a suggested irony in the invoking of freedom of political communication to support these publications (see [181] above). According to the applicant, it is true that there is an irony in these proceedings, but it is not the one identified by the Attorney; there is a far greater irony at work here. In the White Paper, the Australian Government urges Australians to take up a battle of ideas against, amongst others, the ideas published in these two books. In his application to the Review Board and in his written submissions to this Court, the Attorney, a member of the Australian Government, sought and now defends the suppression of those very ideas. Suppression not because of the effect or likely effect of those ideas in promoting or inciting crime or violence, but simply because of their purpose. See also the passage from McHugh J in Coleman v Power at [91] (quoted at [179] above). (b) The practical effects of the law in the present case include preventing Australian voters from reading the contents of the books. To that extent the law restricts Australian voters from knowing what are the ideas contained in the books and what those ideas convey about the nature of the terrorist threat. (c) The Attorney's conclusion in the first two sentences of [185] above latches on to what the law is directed to and ignores its practical effect. The terms and reasons for the call to arms are at the epicentre of political debate about responses to terrorism. Even if one accepts that there could not be any suggestion that the Rabelais article in Brown was relevant to the political process, what was said by Heerey J at 246E (quoted at [180] above) was equally apposite to the present case. Indeed, despite the best efforts of Senior Counsel for the applicant to make the two publications in the present case relevant to that political process, it is important not to lose sight of what that political process is --- the effective operation of the constitutional system of representative and responsible government. Communications that promote, incite (or instruct) in matters of violence or crime do not fall within its architecture or framework; they therefore cannot burden or impair it. In my opinion, the applicant's constitutional argument falls at the first hurdle; the Code, in particular the 'RC' classification of 'Publications' and specifically para (c) of Item 1, confining its construction to one of purpose and intent of the publication rather than its effect or likely effect, is not constitutionally invalid on the ground that it effectively burdens communication about government or political matters. On any view, it is not necessary that I consider the second limb of the Lange test or, on the Attorney's view of Coleman v Power (see [187] above), the second and third elements of that limb. Had it been necessary, I would have found the object of the relevant provisions of the Code to be compatible with the system of government prescribed by the Constitution and that the manner in which those provisions achieve that object are compatible with the system of government prescribed by the Constitution ; in other words, the relevant provisions of the Code were reasonably appropriate and adapted to that end. It follows, in my view, that the applicant's application on this ground also fails. The application must therefore be dismissed. In the event that I came to this conclusion, I was requested by the applicant, a request which was not opposed by the Attorney, to defer making any order as to costs. I agreed to do this. I will stand the matter over to allow the parties time to agree on appropriate orders or, in default of agreement, to list the matter for further submissions on this issue. The orders I have made reflect this arrangement. | censorship classification of publications publication refused classification publications which promote, incite or instruct in matters of crime or violence construction of national classification code whether 'promote' or 'incite' defined by reference to effect whether violence promoted must be in australia only consideration of educational merit persons or class of persons to or amongst whom book is published judicial review construction of statutes review of classification review board decision relevant and irrelevant considerations error of law no evidence decision not authorised by legislation in pursuance of which it purportedly made obligation of decision-maker to conduct roving inquiry implied freedom of political communication whether commonwealth law invalid whether censorship law appropriate and adapted to serve legitimate end in manner compatible with system of government prescribed by constitution whether regulation effectively burdens communication about government or political matters compelling justification distinction between law which controls an activity and law which restricts communication about whether that activity should be controlled media and communications administrative law constitutional law |
They also seek leave to proceed against the company which is now in liquidation. The company was covered by a Professional Indemnity Insurance Policy during the relevant period and gave notice to its insurers of the claims against it. The insurers have declined to provide indemnity relying upon an exclusion clause in the policy. The liquidator of the company is not prepared to contest the insurers' refusal to indemnify. The applicant investors now seek to join the insurers as respondents and to seek a declaration that they are liable to indemnify the company. That joinder is opposed largely on the basis that a declaration obtained by the applicant investors against the insurers would not legally prevent the insurers from contesting any claim for indemnity by the liquidator following a judgment against the company. For the reasons that follow, I propose to allow the insurers to be joined. As a consequence, I will also order in the related application in WAD 307 of 2006 that the applicants have leave to proceed against the company. On 27 October 2006 former investors in a scheme said to have been managed by KMF commenced proceedings against the three former directors, KMF itself and the liquidator of KMF (subsequently discontinued as against the liquidator). Three days later, an application was filed in this Court seeking the leave of the Court under s 471B of the Corporations Act 2001 (Cth) (the Act) to begin and proceed with the action against KMF. Altogether there are eleven applicants, some of whom are corporations and some of whom are natural persons. 3 In a substituted statement of claim, filed 20 February 2007, it is alleged that from 22 December 1999 KMF was the responsible entity for the Clifton Partners Finance Mortgage Scheme (the Scheme), a registered management scheme under ch 5C of the former Corporations Law. The Scheme involved making loans secured by mortgages over property and otherwise on terms and conditions specified by KMF from time to time. It is alleged that KMF appointed Knightsbridge Pty Ltd, which was formerly Clifton Partners Pty Ltd, as the custodian of the assets of the Scheme within the meaning of a Constitution and Compliance Plan lodged by KMF with the Australian Securities and Investments Commission (ASIC) under Ch 5C. Knightsbridge Pty Ltd was to act as KMF's agent in the management of the Scheme, the origination of loans and in ensuring compliance with the terms of any prospectus issued by KMF. It was also required to comply with the lawful directions of KMF and ensure compliance with the requirements of the Corporations Law. Knightsbridge is still referred to in the pleading as Clifton Partners and will be so described in these reasons. 4 According to the substituted statement of claim, KMF had various duties. It was required to exercise the care and diligence of a reasonable person in KMF's position. It had to act in the best interests of members of the Scheme and to comply with the Compliance Plan. Duties of the directors were also pleaded. These are duties of care and diligence, to act in the best interests of the members of the Scheme and to take reasonable steps to ensure compliance with the Corporations Law and the Compliance Plan. Section 601FD of the Corporations Law is pleaded. The applicants also say that the directors had a common law duty of care to potential investors in the Scheme to ensure that they did not suffer economic loss. 5 The first to fifth applicants say that on 14 February 2000 they were owed sums amounting to $650,000, forming part of an overall sum of $850,000 advanced to Fieldmont Holdings Pty Ltd (Fieldmont). The remaining lender is not an applicant. The applicants say the original loan was to have been repaid on or about 30 November 2000 and secured by a second registered mortgage over land owned by Fieldmont. They say that Clifton Partners recommended in February 2000 that they roll the existing loan over into an increased loan of $1.1 million secured by a new second mortgage over the land in their favour and in favour of new investors providing the additional advance. This letter is said to have been an offer for subscription of securities of a corporation and, alternatively, an invitation to subscribe for securities within the meaning of s 1018 of the Corporations Law. KMF is said to have failed to lodge a prospectus in relation to the securities and to have contravened s 1018. 6 Various representations are said to have been conveyed by Clifton Partners in its letter of 14 February 2000 to the first to fifth applicants. The representations are said to have related to the value of the land to be secured, the amount secured under the first registered mortgage, the Loan to Valuation ratio, the amount that would continue to be owed under the first registered mortgage and the absence of any reason to believe that it would be greater than $2.2 million. They are said to have been false and the basis of that falsity is pleaded. 7 Clifton Partners also allegedly failed to inform the applicants that at the date of the offer, Fieldmont intended to increase the amount owing under the first registered mortgage to $2.7 million effective from the end of February 2000. Clifton Partners is said to have known that Fieldmont was, or had been, in default of its obligation to pay interest pursuant to a loan from the National Australia Bank. It allegedly failed to inform the applicants of those matters. The first to fifth applicants say that Clifton Partners engaged in conduct which was misleading or deceptive, contrary to s 995(2) of the Corporations Law and that they are entitled to recover loss or damage caused by that conduct. The remaining applicants plead misleading or deceptive conduct in respect of successive prospectuses issued on 11 February 2000, 13 March 2000, 11 May 2000 and 15 May 2000. 8 The substituted statement of claim also alleges breaches by the directors of duties imposed on them by s 601FD of the Corporations Law. These relate to failure to provide or cause KMF to provide adequate training to staff members of Clifton Partners to ensure that they understood the requirements of the Corporations Law and the Compliance Plan. They are also said to have failed to monitor or review or cause KMF to monitor or review Clifton Partners' compliance systems. They failed to check or failed to cause KMF to check compliance by Clifton Partners with the Corporations Law and the Compliance Plan. They allegedly authorised Clifton Partners to originate loans and make offers for subscriptions or invitations to subscribe for interests in the Scheme without reference to them and to have signed various prospectuses without reference to them. Other breaches of s 601FD are alleged, including particular breaches of that section by Mr Beekink, the first respondent. Each of the directors is also said to have been negligent in breach of his common law duties of care. 9 The first to fifth applicants say that each of the original investors, including themselves, discharged their existing second registered mortgage over the land and agreed to take an interest in the new registered mortgage securing $1.1 million. They say they did so in reliance upon the representations conveyed by the Clifton Partners' letter of 14 February 2000 and as a result of the breaches of the directors' duties. They say that by reason of those matters, they were not repaid their respective outstanding advances towards the original loan. They claim compensation under various provisions of the Corporations Law as it was in force prior to 1 March 2000 and, alternatively, under the corresponding provisions of the Act, they also claim damages and interest. 10 On 30 March 2007, I dismissed a motion filed by the first to third respondents seeking to strike out the substituted statement of claim in relation to causes of action pleaded by the first to fifth applicants. 11 On 16 April 2007, the applicants filed a motion seeking the joinder of KMF's insurers, Employers Reinsurance Corporation and Suncorp Metway Insurance Ltd (the Insurers). They also filed a minute of a proposed amended application and proposed amended substituted statement of claim naming the Insurers as sixth and seventh respondents respectively. The joinder is opposed by the Insurers. Written submissions were filed in relation to the motion and in the related application (in WAD 307/2006) for leave to proceed against KMF. Counsel for the applicants accepted that there was no point in seeking leave to proceed against KMF in the event that the joinder motion was dismissed and accepted that if that were the case the application for leave to proceed should be dismissed. Oral argument on the motion for joinder of the Insurers proceeded on 28 August 2007. 13 On 21 November 2006, Dwyer Durack the solicitors for the applicants wrote to the solicitors for KMF's liquidator and asked for copies of documents indicating that KMF was insured. On 12 December 2006 the solicitors for KMF, Christensen Vaughan, wrote back advising that the liquidator had located records. It appeared that KMF held a professional indemnity policy which expired on 17 December 2000. Notice of a potential claim in respect of Fieldmont was given to the underwriter on 17 and 18 December 2000. The solicitors advised that there was no indication that indemnity was granted as a result of that notification. The liquidator had informed the underwriter of the existence of the current proceedings and requested the underwriter's advice as to indemnity. The solicitors indicated that the liquidator lacked funds to contest any denial of indemnity by the underwriter. 14 The liquidator, Giovanni Carrello, had been appointed administrator of KMF on 20 February 2001 and was appointed administrator of a Deed of Company Arrangement on 15 June 2001. Following the termination of that deed he became liquidator of KMF on 8 October 2002. He said, in an affidavit sworn on 16 January 2007, that there were no funds available in the liquidation of KMF to meet the costs of the application for leave to proceed or these substantive proceedings or to pay any award of damages which might eventually be made in favour of the applicants. He exhibited copies of statements of receipts and payments which he had lodged with ASIC in relation to KMF. He added that KMF has no assets. Its business was essentially the management of registered and unregistered managed investment schemes. 15 On 13 December 2006 Mr Carrello had received a copy of an email from the Claims Manager of the underwriter, Dexta Corporation Pty Ltd (Dexta). The Claims Manager said that she was aware that Dexta had received several years before numerous papers in relation to Knightsbridge managed funds. She was not aware whether any of them could support a notification of claim or circumstance under the 1999-2000 policy in relation to the current proceedings. 16 Mr Carrello said KMF lacked funds to contest any denial of indemnity on the part of Dexta. The insurers were identified as the proposed sixth and seventh respondents. We will contact you further as soon as possible in that regard. You should continue to act as a prudent uninsured unless advised to the contrary. They relied upon an exclusion clause in the policy relating to any claim made against the insured directly or indirectly arising out of the non-repayment of any loan which was originated or managed by the insured. They rejected submissions which had been made on behalf of the liquidator that the exclusion clause did not apply. It seems from the letter written by the Insurers' solicitors that the liquidator's solicitors had contended that the Insurers' interpretation of the exclusion clause deprived the policy of any effect. 18 The Insurers' solicitors also referred to cl 3.3(c) of the policy which contained an exclusion in respect of dishonest or reckless acts directly or indirectly arising from any actual or alleged conduct with a reckless disregard for the consequences thereof. They said that Mr Beekink of KMF had authorised Clifton Partners to sign documents that KMF had not reviewed and permitted documents to be sent to investors without them ever having been read by the insured. If the insured had acted in a similar manner in respect of the loan the subject of the claim the exclusion contained in cl 3.3(c) of the policy would apply. Further investigations would need to be made. The offer of indemnity was rejected. I note that the offer did not extend to the liquidator's costs of bringing such an action. The additional pleading is contained in [152] to [157] inclusive of the proposed amended substituted statement of claim. The applicants would allege that by a policy of insurance in writing dated 18 February 2000 the Insurers by their agent, Dexta, agreed, in consideration of the payment of the premium of $12,500 per annum, to provide indemnity to KMF subject to the terms of the policy. 21 The proposed pleading would then set out relevant express terms of the policy. The applicants would say that the Insurers agreed to indemnify KMF up to a limit of $5 million in respect of claims first made against KMF during the period of insurance defined to mean "4pm on 17 December 1999 to 4pm on 17 December 2001" and notified to the Insurers during that period. The nature of the claims insured were claims "... arising from KMF's civil liability for breach of professional duty arising from any act, error or omission wherever or whenever committed or allegedly committed by KMF in the conduct of its business of responsible entity". Clause 1.1 of the policy was cited. 22 The applicants also allege that the insurance policy covered KMF's legal liability for any act, error or omission committed by KMF in the conduct of its business of responsible entity by reason of any unintentional breach of the Trade Practices Act 1974 (Cth) (the TPA), the Fair Trading Act 1987 (NSW), the Fair Trading Act 1985 (Victoria) or similar legislation enacted by any State or Territory of Australia (cl 1.2.3). Reference was also made to the notice requirements of the policy. The applicants' claims the subject of these proceedings are deemed, by virtue of clause 5.2 of the Policy, to be a Claim, or alternatively Claims, within the meaning of the Policy, made during the period of insurance. The Applicants' claims herein arose from KMF's civil liability for breach of professional duty arising from acts, errors or omissions committed by KMF in the conduct of its business of responsible entity within the meaning of clause 1.1 of the Policy. 156. Further and in the alternative, the Applicants' claims herein arose from KMF's legal liability for acts, errors or omissions committed by KMF in the conduct of its business of responsible entity, being unintentional, misleading or deceptive conduct contrary to s 728(1)(a) and 995(2) of the former Corporations Law as pleaded in paragraphs 44, 45, 61(a), 76, 95 and 111 herein, such provisions being legislation enacted by any State or Territory of Australia similar to the Trade Practices Act , the Fair Trading Act 1987 (NSW) or the Fair Trading Act 1985 (Victoria) within the meaning of clause 1.2.3 of the Policy. 157. In the premises, the Sixth and Seventh Respondents are liable to indemnify KMF against the "Claim Costs" (as defined in the Policy) with respect to the claims of the Applicants, up to the limit of $5 million. It is entitled "Miscellaneous Professional Indemnity Insurance Policy". The insured is identified in a schedule to the policy as "Australian Managed Funds Limited". It is now known as KMF. Its professional business is described as "Responsible entity". The period of insurance is "From 4pm 17 th December 1999 To 4pm 17 December 2001". The limit of liability is $5 million. Employers Reinsurance carries 35% of the risk and Suncorp Metway carries 65%. The first relates to defamation (cl 1.2.1). The second relates to unintentional infringement of intellectual property rights (cl 1.2.2). Our aggregate liability for all Claims under this clause shall not exceed the Limit of Liability. Clause 3.3 is relevant. It includes any judgment or settlement amount, interest on that amount, and the claimant's costs. These included personal injury and property damage exclusions. 4(2) An applicant may apply for leave under rule 2 or sub-rule 3(2) either before or after the filing of his originating process and may apply without serving notice of the motion on any person on whom the application has not been served. (2) If the liability of the insurer to the company is less than the liability of the company to the third party, subsection (1) does not limit the rights of the third party in respect of the balance. (3) This section has effect notwithstanding any agreement to the contrary. 21(2) A suit is not open to objection on the ground that a declaratory order only is sought. 22. The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided. 23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate. It may be assumed that, subject to the grant of leave to proceed against the company, their causes of action would have a reasonable prospect of success. But KMF has no money. It may be assumed that it has a legal right to claim against the Insurers. That right may or may not be of any value as the Insurers may have a good defence to it. But it is only through a successful claim against the Insurers that KMF would be able to meet any judgment against it in favour of the applicants. KMF's liquidator has no interest in pursuing any claim against the Insurers even if indemnified against an adverse costs order by the applicants. Nor does he have the funds to defend the action against KMF if leave to bring such an action were to be granted. 35 It is not disputed that the applicants, if they obtained a judgment against KMF, could not recover directly against the Insurers under s 51 of the Insurance Contracts Act . Counsel for the Insurers accepts that this Court has power to join her clients for the purposes of the relief sought against them by the applicants. Her opposition to the joinder was on discretionary grounds. It is helpful to review some of the relevant case law. 36 The applicants assert no legal right or any cause of action against the Insurers. But the want of a legal right or a cause of action is not a bar to the grant of declaratory relief. It is, nevertheless, necessary that declaratory relief be sought in respect of a real question that is not abstract or hypothetical. It must be directed to the determination of a legal controversy. Moreover the party seeking the relief must have a real interest in raising it: Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 139 ALR 663 per Lockhart J (Spender and Cooper JJ concurring) and authorities there cited. 37 The Full Court of the Supreme Court of South Australia took that general approach to a factual situation similar to the present in JN Taylor Holdings Ltd (In Liquidation) v Alan Bond (1993) 59 SASR 432. Plaintiff companies in liquidation sued three of their former directors alleging breaches of duty. The directors were insured in respect of any wrongful act committed in their capacity as directors. One of them was bankrupt and the other two had left the country. The trustee in bankruptcy had agreed to assign to the plaintiff companies the bankrupt defendant's right to indemnity under the policy subject to the consent of the insurer. The insurer denied liability to indemnify the directors. The plaintiffs sought leave to join the insurer as an additional defendant seeking a declaration that the insurer was obliged to indemnify the directors in respect of any judgment in favour of the plaintiff companies arising out of any wrongful act within the terms of the policy. On appeal the Full Court ordered the joinder of the insurers. Special leave to appeal against the decision was refused by the High Court. 38 Before referring to the judgment it should be noted that s 117 of the Bankruptcy Act 1966 (Cth) had some relevance to it. It is similar in its operation to s 562 of the Act. (2) Subsection (1) does not limit the rights of the third party in respect of any balance due to him after the payment referred to in that subsection has been made. (3) This section applies notwithstanding any agreement to the contrary, whether entered into before or after the commencement of this Act. In order to obtain satisfaction in that way, it might be necessary for the plaintiffs to make the non-bankrupt directors bankrupt and, having provided a proper indemnity for costs to the trustee in bankruptcy, to institute and prosecute in the trustee's name an action against the insurer. That the jurisdiction to grant declaratory relief is very wide and judicial pronouncements appearing to restrict the circumstances in which such relief will be granted relate to the sound exercise of discretion rather than to jurisdiction. 2. It is not necessary that the plaintiff have a cause of action against the defendant. 3. There is no jurisdictional limit against the grant of declaratory relief. The Court's power to grant such relief "is only limited by its own discretion". 4. There may be circumstances which so contraindicate the exercise of the discretion in favour of the grant of declaratory relief that they would lead almost inevitably to the exercise of the discretion against the making of a declaration. 5. A declaration will not be made except in matters "which have a real legal context, and to the determination of which the Court's procedure is apt", citing Johnco Nominees Pty Ltd v Albury-Wodonga (NSW) Corporation [1977] 1 NSWLR 43 at 61 (Hutley JA). 6. There must be some person who has a true interest in opposing the declaration. The question must not be purely theoretical. 7. If the determination of the question could not affect the plaintiff's legal rights or commercial or personal interests now or in the future the declaration would almost certainly be refused: citing Gardner v Dairy Industry Authority (1977) 52 ALJR 180 at 188 (Mason J). The principles so enunciated are, with respect, not contentious. Moreover, armed with a declaration of the insurer's liability to indemnify the directors, the plaintiffs will be far better placed to secure the consent of the trustee in bankruptcy, or alternatively authority to sue in the trustee's name. It is true that the issue of the insurer's liability will cease to be a live issue if the plaintiffs fail in their action against the defendants, but, to my mind, their interest in obtaining a declaration of the insurer's liability concurrently with that of the liability of the defendants, is undeniable. 42 Referring to discretionary considerations, King CJ noted that the trial of the action against the directors seemed likely to be very lengthy, very complex and very costly. The joinder of the insurer would make it a co-defendant with the defendant directors. The question which he then posed was whether res judicata would operate as between the co-defendants. He concluded that an actual lis in the sense of proceedings between the defendants concerned was not a requisite of res judicata and cited the judgment of Jacobs J in Re Multi-tech Services Pty Ltd (In liq); Heard v Commonwealth Trading Bank of Australasia (1982) 30 SASR 218. He recognised that that was an important factor in the exercise of the discretion. However, it could not prevail against other compelling considerations. If the insurer were to plead defences based on want of notification of claims or avoidance of the policy under s 237 of the Companies (South Australia) Code by reason of payment of the premiums by the plaintiffs or a related corporation, such defences could be determined, if appropriate, as preliminary issues. If determined in favour of the insurer, the insurer's involvement in a long and expensive trial would be avoided. 43 His Honour said that, in the exercise of its discretion, the Court must be guided by the overriding principle that a multiplicity of proceedings was to be avoided. He referred in that respect to s 27 of the Supreme Court Act which is in substance reflected in s 22 of the Federal Court Act. He was particularly concerned about the need to avoid the prospect of a second long and complex trial. In that case a building society in liquidation sued its former auditors for breaches of retainer and duty of care. The insurers were conducting the defence. However upon inquiry from the plaintiff, they neither admitted nor denied liability to indemnify the auditors. They declined to commit themselves about the interpretation of the policies so far as they provided for maximum amounts of cover. The plaintiff sought leave to join them as defendants and to seek declarations against them as to the application of their policies. The Court of Appeal allowed an appeal against an order at first instance granting leave to join them. The Court held there was no basis for the joinder under the Supreme Court Rules . The issues raised against the insurers were additional to those between the building society and the auditors. They depended upon discrete facts. The Court also rejected the proposed joinder on discretionary considerations. 45 Ormiston JA, with whom Tadgell JA agreed, identified as a discretionary consideration the fact that joint representation could not be expected to continue for the insured and the insurers who would have conflicting interests at least with respect to the resolution of the claims for declaratory relief. That would give rise to great inconvenience and would cause the defendants considerable added expense in circumstances where the plaintiff building society was in liquidation and unable to bear the costs of two sets of representation throughout what was undoubtedly going to be a long and complex trial. It would also have the effect of denying the insurers their rights under the policies to take over and defend the claim in circumstances where control of the defence of the claim might be of the greatest practical importance. 46 Phillips JA identified as a discretionary consideration the fact that the insurance questions were hypothetical until the liability of the insured was determined. The insurers had not plainly denied liability and might never do so. He also regarded as very important the consideration that the plaintiff was not a party to the insurance contracts and in seeking to have determined the extent of the liability of the insurers to the auditors was seeking to initiate the determination of questions in which it had no direct legal interest although it might have some present commercial concern. Any right under s 117 of the Bankruptcy Act was doubly contingent. In those circumstances the Court had to be particularly careful to see that the joinder of the insurers was appropriate before permitting it and thereby embroiling them against their wishes and at the instance of a stranger to the policies in expensive litigation over those policies. 47 His Honour said that there was an absence of any current and identifiable dispute between insurer and insured. That stemmed not only from the absence of any plain denial of liability but also from the absence of any clearly articulated claim by the insured. That makes it all the harder to conclude that the questions underlying the declarations now sought by the plaintiff do warrant determination, and that it is either just or convenient that those questions be determined in this proceeding between Pyramid and the auditors. I should state that I do not think that the mere fact that the disputant is the liquidator of a possible creditor of the insured can prevent that liquidator from raising the issue and seeking declaratory relief. I say that largely because that question has been raised and resolved in the JN Taylor case, from which leave to appeal to the High Court was refused. If the matter were not free from authority I confess I would have had the gravest doubt whether it was ordinarily appropriate to permit an outsider to seek from the court declaratory relief as to the meaning and effect of a contract between two parties who had not themselves raised any issue as to its meaning and effect and at least one of whom objected to the court's interfering in its private affairs. He referred to the rejection by King CJ of the view expressed at first instance that the plaintiffs did not have an interest sufficient to maintain the action for declaratory relief unless and until they succeeded in the action against the defendants. King CJ had characterised that as too narrow a view of the interest of the plaintiffs required to render the issue real rather than theoretical. What is wanted in the plaintiff is a sufficient interest to render its claim to declaratory relief "real rather than theoretical" and if that be the test I think that it is probably satisfied. The critical point there was not only that indemnity had not been declined but there had been an acceptance of liability. In that case a firm of chartered accountants, formerly auditors to the State Bank of South Australia, were sued by a number of parties including a subsidiary of the Bank for $1 billion. The claims were based on breaches of duty on the part of the auditors. The trial of the action was estimated to last in excess of a year. Estimated costs of proceeding to trial, $13 million, would exceed the known assets of the auditors' partners. The plaintiffs had obtained orders from the trial judge requiring the auditors' insurer to discover and produce all applicable policies of professional indemnity insurance. The auditors were also ordered to discover and produce confidential correspondence between them and their insurer relating to notification of the claim and indemnification generally. The insurer appealed the production orders to the Full Court. They contended that they were dealing with the claim as if it attracted indemnity in a relevant policy year and had not declined the indemnity. 51 In allowing the appeal the Full Court held that the action did not bring into issue any question concerning the insurance arrangements as the insurers had not declined indemnity. There was no arguable case for joinder. Accordingly, documents evidencing the insurance arrangements were unrelated to any matter in question on the pleadings and were not a proper subject for discovery. The JN Taylor Holdings 59 SASR 432 decision was distinguished on that basis. Cox J, who dissented in the result, agreed with Perry J that no arguable case for joining the defendant's insurer had been advanced. He referred to the insurer's denial of liability on the basis that the conduct of the defendant directors was such as to disentitle them to indemnity. The same conduct would need to be scrutinised to determine whether the plaintiffs' claim against the directors should succeed (at 37). That will not often be the case. More commonly, I would have thought any denial of liability on the part of the insurer will not involve the need to address questions of fact which are common to the questions arising in the context of the resolution of the claim against the insurer. 53 The Queensland Court of Appeal in Interchase Corporation Ltd (in liq) v FAI General Insurance Co Ltd [1998] 2 Qd R 301 by majority, declined to follow JN Taylor Holdings 59 SASR 432 . In that case Interchase Corporation commenced proceedings against valuers in connection with the development of a retail and commercial complex in Brisbane. It claimed to have lost about $60 million through a negligent valuation of the complex. FAI was the professional indemnity insurer of the valuers. FAI conducted the defence of the litigation for some time then declined indemnity. The valuers did not object to that decision and did not foreshadow any possibility of contesting it. Interchase then sought to join FAI as an additional defendant to obtain a declaration that it was liable to indemnify the valuers in respect of their liability to Interchase. A judge acceded to that application and an appeal from that decision was allowed by majority. The majority held in substance that convenience alone could not justify joinder of an additional defendant under the Rules of the Supreme Court. There was no controversy between the valuers and the insurer and therefore their rights inter se would not be determined in the action. The joinder would serve no useful purpose. 54 Byrne J referred to the judgment of King CJ in JN Taylor Holdings 59 SASR 432 and particularly his finding that the insurer if joined as a defendant would be bound in subsequent proceedings by the defendant directors or their trustee in bankruptcy by a declaration of liability and findings of fact. King CJ, as noted earlier, relied upon the decision of Jacobs J in Re Multi-Tech Services 30 SASR 218. However, according to Byrne J, Jacobs J, in the earlier case had assumed rather than decided that the additional party would be bound and did not consider whether the determination of an existing controversy between co-defendants was essential to a binding adjudication. 55 McPherson JA, who agreed with Byrne J, suggested that the more expansive Rules of Court relating to joinder of parties in South Australia might explain the decision in JN Taylor Holdings 59 SASR 432. It is, however, difficult to see how it would effectively solve the problem discussed by Byrne J in his reasons on this appeal of the binding effect (or lack of it) of the declaration which the plaintiff now wishes to claim against FAI, which is a question that was not explored in JN Taylor Holdings v Bond. But I do not think it is sufficient, for the joinder to lack utility, that it is not binding between those parties at law if, in its practical effect, it is. He also agreed that neither doctrine would operate to bind FAI and the valuers inter se in respect of that question. His Honour went on however to refer to the wider concept of estoppel enunciated in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589, a case in which admittedly there was mutuality. However, abuse of process is a similar mechanism designed "to protect against 'the scandal of conflicting decisions'," which can achieve that protection where mutuality is absent as it is here. Davies JA thought it would therefore be an abuse of process to permit either to litigate that question in subsequent proceedings. It followed that the declarations sought would effectively determine the question of FAI's liability to the valuers as between those parties. 57 His Honour rejected the contention that the question was hypothetical. Despite the contingencies that Interchase might not succeed against the valuers or that the valuers and FAI might resolve their differences or that the valuers might never go bankrupt or into liquidation and that if they did their trustee or liquidator might not proceed against FAI, it was unnecessary to consider the likelihood of those contingencies. There was no exposition by Jacobs J of any principle that would support that proposition. It is not necessary for me to decide the general question here. In my opinion the approach taken in JN Taylor 59 SASR 432 is supportable on a wider basis without reliance on a res judicata or issue estoppel. That wider basis was enunciated by Davies JA. In this respect I refer also to my review of the authorities relating to the general concept of abuse of process by relitigation in Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 at [59] --- [69]. I consider, as did Davies JA, that there is utility in a declaration against an insurer in circumstances such as the present. That factor however, while important, does not exhaust the discretionary considerations, particular to this case, to which I should have regard. 59 There is a dispute between KMF and its insurers in this case. KMF notified a claim and the Insurers denied liability. They had not offered to conduct any defence on behalf of KMF. The liquidator of KMF is unwilling to proceed against them. Although s 562 confers no legal right on the applicants as against the Insurers, it creates a priority right in the proceeds of any successful claim against the Insurers which gives them a very real interest in having the Insurers' obligations to KMF determined. The basis upon which the Insurers have denied liability raises a discrete issue about the application of an exclusion clause in the policy. On the face of it that question may be susceptible of resolution within a short compass. The question is whether the nature of the claim which the applicants seek to bring against KMF brings the liability which they would assert within the scope of the exclusion clause. That is a matter which should be capable of determination largely upon the pleadings, agreed facts and documents. 60 The Insurers reserve as a fallback position the possibility that they may rely upon an exclusion clause relating to reckless conduct on the part of the directors. In that event it is likely that the factual issues they raise will overlap with some of the issues raised in the pleading against the directors. Presumably the Insurers, if they wish to raise that exclusion, would plead it by way of defence to the declaratory relief that is sought against them. The overlap of factual issues in that event would militate in favour of, rather than against, joinder. At the moment, however, that is hypothetical. The Court is left with an issue raised by the Insurers which, on the face of it, seems capable of relatively expeditious determination without involving the Insurers in all issues at trial. 61 The joinder of the Insurers is sought primarily under O 6 r 2. Their refusal of indemnity is presently based upon the nature of the claim brought against KMF. They contend that a relevant exclusion clause applies. The correctness of that position necessarily involves a question common with that arising in the substantive proceedings and that question is the nature of the case made against KMF. In the event that the Insurers invoke the exclusion clause based upon reckless conduct on the part of KMF's directors, then there are likely to be overlapping questions of fact. Joinder is within the power of the Court under O 6 r 2(a). 62 For the reasons which I have already given, this is a case in which, in my opinion, it is convenient and useful to direct the joinder of the Insurers as respondents and I will so order. Depending on the pleadings which are filed, it may be convenient to make further directions for determination of a preliminary issue in relation to the Insurers' refusal of indemnity. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | declaratory relief power to grant declaration factors affecting discretion to grant declaration power to grant declaration that respondent liable to a person other than applicant factors affecting discretion to order joinder applicants suing former directors and company in liquidation for breach of duty application to join company insurers as respondents to obtain declaration that insurers liable to indemnify directors unlikelihood of any judgment being satisfied by corporate respondent need to avoid multiplicity of proceedings practice and procedure joinder of parties |
The notice was issued upon the basis of a number of judgments obtained in the Local Court by Uther Webster & Evans, Solicitors, for outstanding legal fees. The amount of the judgments totalled approximately $46,000. 2 Mr Dekkan appeared in person on the application. The substance of his claim to set aside the bankruptcy notice was that he had a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debts in accordance with s 40(1)(g) of the Bankruptcy Act 1966 (Cth). 3 The effect of Mr Dekkan's claim is that the solicitors were negligent in the advice they gave him as to how he should seek to set aside an adverse judgment obtained against Mr Dekkan by a Mrs Picciau in the District Court. He also claimed that Ms Vivian Evans, a partner in the firm of solicitors, had failed, unreasonably, to assist him by giving evidence in an appeal from the District Court judgment. 4 In addition, Mr Dekkan alleged that the solicitors had made charged amounted to improper fees for the handling of a local court proceeding against Mrs Picciau, which involved a claim for an apprehended violence order. 5 Mr Dekkan made various claims of overcharging in relation to the handling of his affairs. He joined Ms Evans as a respondent to the present applications, as well as Ms Zoe Ramsay, who was the solicitor assisting Ms Evans in the conduct of Mr Dekkan's proceedings. 6 Although, as Lockhart J said in Re Brink; Ex parte Commercial Banking Co of Sydney Ltd [1980] FCA 78 ; (1980) 30 ALR 433 at 439, the Court is not required to undertake a preliminary trial of the counter-claim, set-off or cross demand, a substantial body of evidence was adduced at the hearing. 7 The evidence consisted of two affidavits of Mr Dekkan and an affidavit of each of Ms Evans and Ms Ramsay. Having regard to the background of the matter and the overall circumstances, I permitted Mr Dekkan to cross-examine Ms Evans and Ms Ramsay. 8 At the start of the hearing Mr Dekkan filed a notice of motion seeking to have the hearing adjourned due to his mental and physical condition which he said prevented him from adequately dealing with the matter. He went into the witness box and was cross-examined. 9 I dismissed the motion but the matters relied upon by Mr Dekkan on the motion are relevant to a consideration of the application to set aside the bankruptcy notice. This is because Mr Dekkan's medical problems contributed to the situation which resulted in the judgment against him in the District Court. 11 Mr Dekkan says in his affidavit of 27 March 2008 that the purpose of the meeting with Ms Evans was to lodge an appeal in the New South Wales Court of Appeal against Mrs Picciau. Whether or not this was the limit of the retainer at that time is not entirely clear. It appears from the evidence before me that it became apparent at the first meeting that Mr Dekkan wanted to obtain possession of the property, which was occupied by Mrs Picciau, but that he was prevented from doing so because of the judgment against him in the District Court. 12 The terms of the retainer seem to have been to advise, and take such other action as may be necessary, to set aside the judgment in the District Court. The judgment was for less than $100,000 and leave to appeal was therefore required. The judgment was obtained ex parte , in very unusual circumstances, as is explained in the judgment of the Court of Appeal referred to below. 13 Ms Ramsay was present at Uther Wesbster Evans's first meeting with Mr Dekkan. Ms Evans informed Mr Dekkan that Ms Ramsay's hourly rates were lower than hers and that she would therefore arrange for Ms Ramsay to work on the matter where appropriate to save some legal expenses. 14 An application for leave to appeal was filed in the Court of Appeal in February 2007. It is not clear from the evidence whether the application was filed by Ms Evans's firm or whether it had been filed by the previous firm acting for Mr Dekkan. 15 Uther Webster & Evans acted for Mr Dekkan until June 2007 when the retainer was terminated. Mr Dekkan asserts that Ms Evans terminated the retainer but Ms Evans's evidence was that Mr Dekkan terminated the firm's services. It is not necessary to decide who terminated the retainer. What is important is that the firm ceased to act in about June 2007 when it was replaced by another firm of solicitors. 16 During the period from February 2007 to June 2007 the retainer of Uther Webster & Evans was extended to cover various other aspects Mr Dekkan's business affairs which related, inter alia , to certain dealings with Mrs Picciau. 17 The retainer was also extended to cover the proceedings involving Mrs Picciau and the claim for an apprehended violence order. 19 When the hearing in the District Court commenced on 25 October 2006, Mr Dekkan was represented by a solicitor, Mr Joseph Johnson of Bruce Dennis & Co. At the commencement of the hearing Mr Johnson applied to vacate the hearing on the ground that Mr Dekkan was "in a psychiatric hospital". 20 Evidence was given by Mr Dekkan's psychiatrist, Dr Selwyn Smith, that Mr Dekkan was experiencing a major depressive episode. 21 The trial judge, Kearns DCJ, heard cross-examination of Dr Smith (by telephone) that Mr Dekkan was capable of giving instructions and attending Court. The hearing proceeded on 25 October 2006 without further incident but there was a dramatic turn of events on the following day. 22 The events of 26 October 2006 are recorded in the judgment of Basten JA at [15]ff. • Mr Dekkan informed the Court that Mr Johnson was not presenting the defence in a proper manner. • Mr Johnson made an application to withdraw from the proceedings. • The trial judge criticised Mr Johnson's lack of preparation for the hearing and expressed disquiet as to the manner in which he had run the case. • Mr Johnson informed the Court that he had advised Mr Dekkan that if he (Mr Johnson) withdrew, the case could continue ex parte and could proceed to judgment on the existing pleadings, ie without the benefit of the foreshadowed amendment. The trial judge accepted that there would be prejudice to Mr Dekkan if the case was not adjourned but he decided that this was outweighed by the prejudice to Mrs Picciau. He therefore refused to adjourn the case and proceeded to enter judgment for approximately $97,000 against Mr Dekkan. The firm of Lofitis Chegwidden, Solicitors & Barristers had taken over the matter from Ms Evans but it had ceased to act some time before the matter was heard in the Court of Appeal on 21 February 2008. 25 Basten JA described at [30]ff the medical evidence relating to Mr Dekkan's admission to St Vincent's Hospital on 26 October 2006. His Honour stated at [34] that when Mr Dekkan attended Court on that day, he (Mr Dekkan) formed the view that Mr Johnson was not adequately prepared to run the case and this was placing Mr Dekkan at severe risk of an adverse judgment. These matters brought on Mr Dekkan's physical and emotional distress. 27 The Court considered that this ground was not made out. Nevertheless, Basten JA stated that "significant issues were raised" which warranted careful consideration. Leave was granted but the appeal was dismissed. 28 The effect of his Honour's reasons was that the trial judge was mindful of the prejudice to Mr Dekkan but it was open to him to find that Mr Dekkan was fit to attend court. Basten JA observed at [51] that there was no doubt that Mr Dekkan was in an invidious position at the trial. He was unwell and his solicitor was unprepared. But, ordinarily, the failure of a lawyer to prepare for a hearing cannot be a ground of adjournment. 30 The request for Ms Evans's assistance came from Mr Dekkan's new solicitor, Mr Lofitis. He sought, in particular, an affidavit from Ms Evans denying a conversation that was apparently an issue in the Court of Appeal. 31 Mrs Evans's position was that her firm was owed a substantial amount for costs and, while she was not prepared to assist generally unless her costs were paid, she would give evidence if subpoenaed. 32 Her evidence was that she was not served with a subpoena. 33 The evidence before me includes a letter from Ms Ramsay to Mr Dekkan on 12 June 2007, apparently before Mr Lofitis commenced to act, declining to act for Mr Dekkan unless outstanding professional fees were paid. An offer from Mr Dekkan to pay $12,000 was said to be insufficient. The proceeding was apparently filed before Mr Dekkan retained the services of Uther Webster & Evans. 35 Ms Ramsay advised Mr Dekkan to retain the services of a barrister, Mr Katsinas, to represent Mr Dekkan in the Local Court. Mr Katsinas was to appear without Ms Ramsay instructing him as this would be cheaper for Mr Dekkan. 36 Mr Dekkan's complaint is that he was unsuccessful in the Local Court proceeding but that he still had to pay Mr Katsinas. In addition, he did not see why he also had to pay Uther Webster & Evans for their work in relation to the Bankstown Local Court matter. The losses are said to be $38,000 for loss of rent and $100,000 for inability to sell the property. 38 He also claims that Ms Evans is responsible for the loss in the Court of Appeal and the failure to reverse the damages order against him for $97,000. 39 On the morning of the hearing before me, Mr Dekkan filed a Statement of Claim in the Supreme Court of New South Wales against Uther Webster & Evans, as well as Ms Evans and Ms Ramsay. The statement of claim seeks damages of $228,000 comprised largely of the matters referred to above. I listed it for hearing on 24 June 2008. 41 On 18 June 2008, I received a faxed communication from Mr Dekkan addressed to the "Associate, Federal Court", seeking an adjournment of the hearing due to an accident that occurred on 27 May 2008. The facsimile was accompanied by a referral to Dr Selwyn Smith. The referral stated that Mr Dekkan was suffering from a depressive illness. He did not appear but I did receive a further fax from him on the morning of 19 June 2008 stating that he was in pain and suffering anxiety and depression. He sought my leave to be excused from attending. On 19 June 2008 I declined to vacate the hearing date of 24 June 2008. 44 On 20 and 23 June 2008 I received further facsimiles from Mr Dekkan requesting an adjournment. The communication of 20 June was accompanied by a certificate from Dr Smith stating that arrangements had been made to admit Mr Dekkan to hospital on 1 July 2008. 45 On 23 June 2008, a Registrar wrote to Mr Dekkan acknowledging, on my behalf, his faxes of 20 June and 23 June and stating that the hearing was to proceed the following day. 46 When the matter was called on for hearing, I granted leave to Mr Dekkan to file a motion for the hearing to be vacated. 47 After hearing evidence I was satisfied that Mr Dekkan was able to present his case before me and I declined to vacate the hearing. 48 There were two reasons for this. First, he appeared to be able to express himself with reasonable clarity and had no real difficulty in answering questions in cross-examination. 49 Second, the medical evidence before me was minimal, and did not address Mr Dekkan's capacity to conduct the proceedings. 50 My views were later reinforced by the fact that he conducted the argument on the hearing of the application which occupied the rest of the day. He did not appear to suffer any real disadvantage or difficulty, except for allowances to be made for his status as a self represented person. Also, he did from time to time show signs of agitation and frustration but I accommodated this by giving several short adjournments. 52 His Honour there observed that the authorities indicate that an applicant must satisfy the Court of three interrelated, and sometimes overlapping matters: first, that he or she has a " prima facie case", even if evidence is not adduced which would be admissible on a final hearing; second, that he or she has "a fair chance of success"; third, that the claim is "genuine" or " bona fide. 55 Whether the test be expressed as a prima facie case, or a fair chance of success, it is plain that the claim propounded by Mr Dekkan does not reach either threshold. There are four reasons for this. 56 First, the substance of Mr Dekkan's claim in relation to the appeal to the Court of Appeal was that Mrs Evans ought, instead, to have filed a motion in the District Court to set aside the judgment of Kearns DCJ. There was nothing to suggest that this was a more appropriate course than an appeal, or that any different result would have been produced. 57 This view is reinforced by the judgment of the Court of Appeal. Basten JA did not indicate that the matter should have been pursued in the District Court rather than on an appeal. Indeed, his Honour said that significant issues were raised on the grounds of appeal, albeit that the appeal was ultimately dismissed. 58 Second, it is true that Mr Katsinas was retained to appear for Mr Dekkan in the Bankstown Local Court but there is no basis for a claim in negligence against the solicitors for recommending this course of action. 59 It would be unusual for a solicitor to be negligent in recommending to a client that a barrister be retained to appear for the client in court proceedings. No want of care was demonstrated in the present case. 60 Mr Dekkan's real complaint on this question was that the barrister was unsuccessful and that he was charged, not only for the barrister's fees but also for the solicitors'. However, Mr Katsinas was not briefed on a "no win, no fee" basis, and there was nothing to suggest that the solicitors' fees were incurred improperly. 61 Third, Mr Dekkan's claim that Ms Evans failed to assist him after her retainer was terminated does not give rise to a "counter-claim, set-off or cross demand". The retainer was terminated, whether by Mr Dekkan or by Ms Evans (it is unnecessary to decide by whom) and Ms Evans was entitled to assert a lien over the file for her outstanding fees, and request that her expenses for preparing any affidavit be covered. 62 In any event, she did not refuse to assist Mr Dekkan. She was prepared to give evidence, subject to being served with a subpoena. 63 Moreover, I can see nothing in the evidence sought to be adduced from Ms Evans in the Court of Appeal to indicate that the result would have been different. Ms Evans's evidence did not affect any issue considered by Basten JA. 64 Fourth, a large measure of Mr Dekkan's concerns was directed at the amount of the charges made by the solicitors. This does not fall within s 40(1)(g) because it could have been, and apparently was, raised in the cost assessment proceedings which gave rise to the bankruptcy notice. 65 I should add that nothing in the Statement of Claim filed on the morning of the hearing alters the conclusion I have reached that Mr Dekkan has failed to satisfy me of the matters required by s 40(1)(g) of the Act. In reaching that view, I have taken into account the fact that Mr Dekkan was not legally represented. I have also considered his claim in light of the medical evidence before me, albeit limited, of his difficulties. 67 Mr Dekkan believes he has a genuine grievance about the amount of his legal expenses. I could observe, without the need for medical evidence, that this was causing him distress. Nevertheless, it did not prevent him from putting before me or presenting the material he relies upon. 68 Although I am satisfied that the ground stated in s 40(1)(g) is not enlivened, the authorities establish that in an appropriate case, on the hearing of a petition where substantial reasons are shown, the Court may exercise a discretion to go behind the judgment debt: Wren v Mahony [1972] HCA 5 ; (1972) 126 CLR 212 at 224-225; Makhoul v Barnes (1995) 60 FCR 572 at 580-582. 69 In Makhoul v Barnes at 582, Hill, Cooper and Branson JJ observed that where on an application to set aside a bankruptcy notice, a court has investigated the question of whether a real debt lies behind the judgment debt, it would rarely, if ever, do so again. 70 The thrust of my consideration of the matter has been to determine whether Mr Dekkan has a claim which satisfies s 40(1)(g). To the extent that the question of the quantum of the indebtedness may arise on the hearing of the petition, it will be a matter for the judge hearing that application to decide whether, and to what extent, to exercise a discretion to go behind the judgment debt. The application to set aside the bankruptcy notice be dismissed. 2. The applicant pay the costs of the respondents. However, Uther Webster & Evans acted for all the respondents. I do not see that an indemnity costs order in relation to Ms Ramsay's costs is appropriate, although it is true that she should not have been joined as a party. I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application to set aside a bankruptcy notice applicant claimed to have a set-off, counter-claim or cross demand against former solicitors for professional negligence no prima facie case or fair chance of success application dismissed bankruptcy |
In those decisions his Honour had refused applications, supported by both parties, to adjourn the trial of the substantive proceedings in both cases. The background to the applications before me is set out in detail in Lennox v Amcor Limited trading as Amcor Cartonboard [2009] FCA 959. Pursuant to s 25(1A) of the Federal Court of Australia Act 1976 (Cth). The appellate jurisdiction of the Court in relation to an appeal from a judgment, other than a migration judgment, of the Federal Magistrates Court is to be exercised by a Full Court unless the Chief Justice considers that it is appropriate for the appellate jurisdiction of the Court in relation to the appeal to be exercised by a single Judge. The Chief Justice has so directed in this case. In Court this afternoon the applicant filed the notices of appeal in respect of which leave had previously been granted, citing the following grounds of appeal: The learned Federal Magistrate erred in law by not according natural justice to the Applicant. In refusing the application made by the Applicant to vacate prior orders and adjourn the trial, the learned Federal Magistrate erred as a matter of law by failing to take into account: that the Court had been appraised of the parties' non-compliance with the pre-trial directions orders on or by 4 August 2009; the severe and prejudicial consequences of the refusal for the Applicant and for the Respondent; the effect of the refusal on the likely length and cost of the trial. The applicant has sought the following orders: That the decision to refuse the application be set aside. That the orders sought in the application filed in the Federal Magistrates Court on 19 August 2009 be made. That the decision to refuse the stay the trial pending the outcome of this appeal be set aside. That the costs of this appeal be costs in the Federal Magistrates Court proceeding BRG649/08. Such further or other orders as the court sees fit. The orders sought in the application filed in the Federal Magistrates Court on 19 August 2009 were as follows: By 14 September 2009 each party make discovery on oath in accordance with the categories described in Schedule hereto. Each party shall produce disclosed documents for inspection in accordance with Federal Court Rules by 4.00 pm on 21 September 2009. The trial of this proceeding will be conducted on the basis that the evidence-in-chief of each witness to be called by the parties will be given by affidavit. That the witnesses' affidavit be exchanged as follows: the Applicant file and serve the affidavit of any proposed witness by 19 October 2009; the Respondent file and serve the affidavit of any proposed witness by 4 November 2009; and the Applicant file and serve any affidavits in reply to the Respondent's affidavits by 13 November 2009. The parties are to exchange outlines of argument 7 days prior to the commencement of the hearing. The proceeding is listed for hearing for 3 days on .... at Brisbane. Either party may apply to the Court to amend these directions on three days notice to the other parties to the proceeding. The Respondent's personnel file for the Applicant. Documents relating to the Applicant taking sick leave on and after 27 May 2008 and the decision of the Respondent to end the payment of sick pay to the Applicant on about 18 June 2008, including emails, notes and memorandum between managers of the Respondent leading up to the decision. The Applicant's sick leave records for the period of his employment with the Respondent. Documents relating to the decision of the Respondent in September 2008 to refuse to recommence and/or backpay sick leave, including emails, notes and memorandum between managers of the Respondent leading up to the decision. Documents relating to the decision to terminate the Applicant's employment on 6 February 2009, including memoranda, emails and minutes or notes of meetings where the termination or possible termination was discussed. Documents related to the meeting on 6 February 2009 at which the Applicant was terminated, including speaking notes, memorandum or emails before or after the meeting and minutes and/or notes of the meeting. At the hearing before me Mr Merrell for the applicant made an application pursuant to s 27 of the Federal Court of Australia Act 1976 (Cth) for the affidavits of Benjamin Green, filed 25 August 2009, to be received as evidence in this appeal. I granted the application, notwithstanding that, as I indicated during submissions, because these affidavits were filed in respect of the application for leave to appeal in this matter I consider that the Court could have regard to them for the purposes of the appeal. The relevant judgment was given only yesterday. However the parties before me submit that the reasons for decision of the Federal Magistrate are accurately reflected in the material deposed by Mr Green in para 33 of his affidavits filed 25 August 2009. In summary, in dismissing the applicant's applications for vacation of orders made on 30 April 2009 and for the adjournment of the trial listed for commencement on 24 August 2009, his Honour found: His Honour ordered that the trial be listed to commence on 26 August 2009. Appeals against an exercise of discretion are governed by established principles: House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 504. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is reasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. However I accept the submission of Mr Merrell, supported by Mr O'Grady, that it is incumbent on the appellate court to carefully examine each case before it, and identify whether an error has been made in exercising the discretion. I quite agree the Court of Appeal ought to be very slow indeed to interfere with the discretion of the learned judge on such a question as an adjournment of a trial, and it very seldom does do so; but on the other hand, if it appears that the result of the order made below is to defeat the rights of the parties altogether, and to do that which the Court of Appeal is satisfied would be an injustice to one or other of the parties, then the court has power to review such an order, and it is, to my mind, its duty to do so. Indeed, where there is a proper basis for an application for an adjournment, and refusal would seriously prejudice the party seeking the adjournment and not prejudice the other party, there is authority that adjournment should ordinarily be granted: Jordan v Smart [1961] NSWR 735. Failure by parties to comply with directions of a Court is more than a source of irritation for the primary judge. It can result in serious inconvenience not only to the primary judge but also to the management of cases in the relevant Registry as other parties can be inconvenienced by the consequences of such failure to comply in the lead up to a substantive trial. In my view the Federal Magistrate was correct when he observed that compliance with directions is not optional. Indeed, notwithstanding that the parties appeared to make genuine efforts to contact the chambers of his Honour close to trial, they had left making such contact very late in the proceedings. Notwithstanding these observations however, in these proceedings I consider that his Honour erred in exercising his discretion to dismiss the applications for adjournment of the trial. I form this view because: Accordingly, in my view, notwithstanding that the Court should be slow to interfere in the exercise of discretion by a primary judge on an issue of practice and procedure, this is a case where such interference is warranted. For the reasons I have given, the exercise of discretion by his Honour miscarried. The appropriate order is to allow the appeal, although with a minor modification to the orders sought by the parties in relation to the date the trial should be listed in the Federal Magistrates Court. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | appeal from decision of federal magistrate refusing an application seeking an adjournment of trial consideration of the principles in house v the king [1936] hca 40 ; (1936) 55 clr 499 whether there was a denial of natural justice failure to hear parties' submissions parties unable to make submissions on prejudice both parties favoured the adjournment practice and procedure |
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