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2 Alternatively, the third respondent seeks to have the applicants' claim against him dismissed pursuant to O 20 r 2 of the Rules on the grounds that claim as made against the third respondent discloses no reasonable cause of action, alternatively that the proceedings against the third respondent are frivolous and vexatious. They sue in their own capacity and in their capacity as trustees of the PP & H Larsen Superannuation Fund, which is referred to in the statement of claim as 'the Fund'. 4 The applicants plead that at the material time the first and second respondents were licensed financial advisers associated with a company, Dultona Pty Ltd ('Dultona') which carried on business providing financial planning advice and services under the name of the Gilpear Group. Dultona was placed in liquidation on 24 April 2002. 5 The applicants allege that they sought financial advice from the first and second respondents. In or about January 1999, the second respondent was appointed by the applicants as their financial advisor, for the purpose of providing financial, superannuation and investment advice ( Financial Services Agreement ). It is also pleaded that in February 1999, the first respondent took over the duties and obligations under the Financial Services Agreement from the second respondent. 7 Further, the applicants plead that at the time of entering the Financial Services Agreement and, at all material times thereafter, the first and second respondents knew or ought to have known that the applicants were each aged over 60 years, were inexperienced in superannuation and investment matters, were seeking to retire within a period of approximately two years and, therefore, were persons who regarded planning for retirement as of the highest priority in making any investments, were conservative in outlook and, therefore, persons who were unwilling to take significant risks, and, in the case of the second named applicant, was unwell. On 7 February 1999, and pursuant to advice provided by the first and second respondents under the Financial Services Agreement, the applicants established the Fund, being a self-managed superannuation fund. 10 The applicants also plead that between February and April 1999 they provided $386 000 to the first respondent to be invested for and on behalf of the Fund. The applicants allege that during the period of April 1999 to June 2001, the first respondent made investments which were inappropriate to their investment attributes and that in so doing these respondents acted in breach of the Financial Services Agreement. It is also alleged that these respondents acted negligently and in breach of fiduciary duty. It is then alleged in par 27 that the first and second respondents were 'persons involved in Dultona's contraventions pleaded in paragraph 25 within the meaning of section 12GF of the 1989 ASIC Act and section 12DA of the 2001 ASIC Act'. 13 The applicants claim damages. The applicants allege that had they been properly advised they would have invested with an alternative fund suitable to their needs. At all material times the third respondent was a legal practitioner who held himself out to be competent to take instructions and carry on legal practice in the area of superannuation law. At all material times the third respondent had an arrangement or agreement with Dultona, pursuant to which the employees or agents of Dultona, including the first and second respondents, would refer clients of Dultona to the third respondent for the provision of legal services necessary for the putting into effect of the financial advice provided by Dultona, its agents or employees ( Legal Services Agreement). In or about February 1999, and pursuant to the terms of the Legal Services Agreement, the third respondent was engaged by the first or second respondent, as agent for the applicants, in respect to the drafting of the necessary documents and attending to the legal requirements for the establishment of the Fund ( Retainer ). The terms of the Retainer include a term implied by law that the third respondent would act at all times with reasonable skill, care and diligence. In breach of the implied term pleaded in paragraph 31, the third respondent, in carrying out the Retainer, failed to exercise reasonable skill, care and diligence. Further and in the alternative, in undertaking the Retainer, the third respondent owed a duty to the applicants to act at all times with reasonable skill, care and diligence. Negligently, and in breach of the duty pleaded in paragraph 33, the third respondent failed to act with reasonable skill, care and diligence in carrying out the Retainer. Further and in the alternative, by reason of the Retainer, the applicants were in a fiduciary relationship with the third respondent as a result of which the third respondent owed a duty to the applicants to not act in his own or another person's interests in conflict with the interests of the applicants. In breach of the duty pleaded in paragraph 35, the third respondent, in conducting the work required by the Retainer, placed the interests of himself or the interests of Dultona, above the interests of the applicants. Further and in the alternative, by reason of the matters pleaded at paragraphs 2, 5, 6 and 22, Dultona engaged in conduct which was misleading and deceptive or likely to mislead or deceive, contrary to section 52 of the Trade Practices Act . By reason of the Legal Services Agreement and the Retainer, the third respondent was knowingly concerned in or a party to the misleading or deceptive conduct pleaded in paragraph 37. In the affidavit the third respondent deposed that in the early to mid 1990s, he began advising on the structure of superannuation investments and preparing superannuation deeds, amendments to superannuation deeds and related documents for clients of the Gilpear Group, depending upon Gilpear Group's express instructions to him. The third respondent deposed that the Gilpear Group never instructed him to advise whether a self managed superannuation fund was a suitable vehicle for a particular client and that he never gave that advice to the Gilpear Group or its clients. He said that he always regard that as the Gilpear Group's area of expertise. If the documents are in order, please arrange for the bound copies of the deed to be signed (or sealed). In particular, they include electing for the fund to become a "regulated superannuation fund" under the Superannuation Industry (Supervision) Act (which must be done immediately ). I confirm that you will arrange for these aspects to be dealt with separately. Also, the fund's investment strategy must be formulated and implemented immediately, in accordance with regulation 4.09. 19 Counsel for the third respondent said that the third respondent accepted that, notwithstanding that his instructions came from the Gilpear Group, the applicants were his clients. However, counsel submitted that there was no need to obtain instructions from the clients directly because there was no doubt about the scope of the retainer, which has been accurately pleaded by the applicants. Counsel also submitted that, on the basis of the terms of the retainer pleaded in par 30 of the statement of claim, there was no arguable obligation on the third respondent to provide the advice pleaded at pars 32.3, 32.4 and 32.5 of the statement of claim. There was, therefore, said counsel, no arguable case that should go to trial. The third respondent also relied upon the memorandum dated 11 January 1999 from the Gilpear Group as demonstrating that the terms of the retainer were clear and were not such as to impose obligations of advice on the third respondent in the terms pleaded by the applicants in pars 32.3, 32.4 and 32.5 of the statement of claim. Counsel also referred to the fact that the third respondent had only charged $310 for the provision of his services and that that was a relevant factor in determining the extent of the third respondent's obligation under the retainer. The third respondent also submitted that it was relevant that the instructions were obtained from a professional financial adviser and this also limited the extent of the obligation on the third respondent to give advice to the applicants. The third respondent submitted that he had discharged his duty by drafting the documents and forwarding them under cover of his letter to Dultona. 20 Counsel for the third respondent submitted that the duties which were owed by a solicitor were ascertained by reference to the scope of the retainer. 22 It was also submitted that if there was a duty on the third respondent, it was no more extensive than a duty to ask the applicants whether they wanted to instruct him to give the sort of advice described in the impugned paragraphs of the statement of claim ( McNamara v Commonwealth Trading Bank (1984) 37 SASR 232 at 241). 23 Further, counsel for the third respondent submitted that, even if it was arguable that the third respondent was under the obligation to provide advice of the nature alleged, the statement of claim should still be struck out because the causation plea was defective. This is because there was no plea that had the applicants received the advice pleaded in pars 32.3, 32.4 and 32.5 of the statement of claim from the third respondent, the applicants would not have established the self managed superannuation fund. Further, counsel submitted that a self managed fund did not preclude the applicants from using it as a vehicle to invest in a 'retail' superannuation fund. 24 The third respondent also submitted that the claim in par 38 of the statement of claim brought under the Trade Practices Act 1974 (Cth) ('the TP Act') should be struck out on the basis that there was not a proper pleading of facts in support of the allegation that the third respondent was 'knowingly concerned in or a party to' the misleading or deceptive conduct of Dultona. 25 Counsel for the applicants submitted that it was necessary for the third respondent to demonstrate that the allegations made against the third respondent were so untenable that the matter should not be sent to trial. Counsel submitted that it was arguable that the implied duty on a solicitor to take reasonable care in the drafting of the documents for, and attending to, the establishment of a self managed superannuation fund would include a duty to take instructions from the clients. Counsel submitted that once that proposition was accepted, it could not be said that there was no arguable case that the duties pleaded in pars 32.3, 32.4 and 32.5 were also incidental to the implied duty to take reasonable care in carrying out the terms of the retainer. This was because had the instructions been taken from the applicants, in the circumstances of this case it was at least arguable that the advice duties would have arisen out of the taking of the instructions. 26 Counsel for the applicants distinguished the cases relied upon by the third respondent for the proposition that it was not part of the solicitor's duty to provide financial advice, investment advice and commercial advice unless expressly retained to do so. Counsel submitted that none of the cases relied upon by the third respondent related to the situation of a solicitor holding himself out as a specialist superannuation lawyer being instructed to establish a self managed superannuation fund for individual inexperienced clients, by financial advisers, who may have a financial interest in the establishment of the self managed fund. Counsel submitted that each case should be considered in the context of its own facts, and the extent of the retainer and the scope of the incidental duty to take reasonable care was a matter for trial. 27 The submissions of counsel for the applicants are to be accepted. The scope of any retainer and the scope of the implied duty to carry out the retainer with reasonable care, depends upon the facts peculiar to the relationship between the solicitor and the client in each case. The expression "my solicitor" is as meaningless as the expression "my tailor" or "my bookmaker" in establishing any general duty apart from that arising out of a particular matter in which his services are retained. In my view, it cannot be said that the applicants' proposition is so untenable as to result in their application being summarily terminated. In my view, it is arguable that there was a duty on the third respondent to obtain instructions directly from the applicants, as an incident of the implied duty to carry out his retainer with reasonable care and skill. Further, in my view, it is also arguable that, in the circumstances of this case, had that duty been carried out, the advice duties pleaded at pars 32.3, 32.4 and 32.5 could also have arisen ( Dalleagles v Australian Securities Commission (1991) 4 WAR 325 at 332-333; Hawkins v Clayton [1988] HCA 15 ; (1988) 164 CLR 539 at 574). It follows that I do not accept that the claim against the third respondent should be struck out on the grounds that no reasonable cause of action is disclosed, or that the claim is frivolous or vexatious. 29 As to the question of the pleading of causation, I accept that the causation plea in par 39 of the statement of claim is in general terms and does not allege that, had the third respondent provided the advice which it is alleged he ought have, the applicants would not have undertaken a self managed fund and would have made alternative superannuation arrangements. However, the applicants have given particulars of loss and damage in respect of the claim made against the first and second respondents. Those particulars do contain a statement to the effect that had the applicants been given proper advice they would have invested with an alternative fund suitable to their needs. Thus, although such a plea is not made specifically as part of the pleading of the claim against the third respondent, it is apparent that this is not because such a plea would not be able to be made. In the circumstances, I would not strike out the claim against the third respondent on the grounds that there is no reasonable cause of action because of the lack of causation between the alleged loss and the alleged breach. The absence of the specific plea by the applicants in relation to causation against the third respondent can be remedied either by amendment or the provision of particulars. 30 The third respondent also submitted that had he given the advice, the applicants would have rejected it, but that is a matter of fact for trial. Likewise, the third respondent's observation that it would have been possible for the applicants to have used the self managed superannuation fund structure to invest in 'retail' superannuation funds, is also a matter of fact to be explored at trial. 31 I now deal with the complaint by the third respondent in relation to the pleading that the third respondent was 'knowingly concerned or a party to' the misleading or deceptive conduct of Dultona. In par 38 of the statement of claim the applicants allege that it is the misleading or deceptive conduct of Dultona that is pleaded at par 37 in which the third respondent was knowingly concerned, and to which he was a party. 32 In par 37 of the statement of claim the applicants identify the matters pleaded at pars 2, 5, 6 and 22 of the statement of claim as comprising the conduct of Dultona which allegedly breaches s 52 of the TP Act. The gravamen of that conduct is pleaded at par 22 of the statement of claim. It is, that Dultona made certain representations to the applicants as to the future. No other paragraphs of the statement of claim are relied upon as comprising the offending conduct. 33 The matters relied upon in par 38 for the allegation that the third respondent was knowingly concerned in, or a party to, Dultona's breaches of the TP Act, are that the third respondent had an arrangement with Dultona whereby Dultona referred clients to the third respondent 'for the provision of legal services necessary for the putting into effect of the financial advice provided by Dultona' and the retainer pleaded at par 30 of the statement of claim. In the case of representations as to existing facts, this is because it is not necessary to show that the respondent corporation knew of the misleading nature of the statement in question, but knowing involvement predicates such knowledge on the part of the relevant natural person. The matter is even more complex in the case of representations as to future matters. A representation on behalf of a corporation will constitute a contravention if the corporation fails to show reasonable grounds for it. However a natural person respondent bears no onus of proof. There is no pleading in par 37 of there being any absence of reasonable grounds for Dultona making the representations as to the future. 36 There is no plea in par 38 that the third respondent knew of the future representations and, also, importantly there is no plea that the third respondent knew that there were no reasonable grounds for the making of those representations. The absence of pleas to that effect are fatal to any attempt to plead a claim against the third respondent based on an allegation that the third respondent was knowingly concerned in, or a party to, the misleading or deceptive conduct of Dultona ( Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 670). 37 It follows that par 37 and par 38 of the statement of claim will be struck out as disclosing no reasonable cause of action, but I will give the applicants leave to amend the statement of claim. The third respondent's motion will otherwise be dismissed. I will hear the parties on the question of costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | striking out statement of claim no reasonable cause of action solicitor accepting instructions from financial adviser to establish a self managed superannuation fund solicitor not taking instructions directly from clients scope of solicitors retainer future representations pleading that a person was knowingly concerned in, or party to, misleading or deceptive conduct comprising future representations practice and procedure |
Area A essentially included the lands within the urban areas of Darwin and Area B essentially included the lands in areas surrounding Darwin. Following that order, those parts of the various native title applications relating to the lands in Area A were consolidated into one set of proceedings: NTD6033 of 2001. This native title application and a number of similar applications where Mr Quall was the authorised applicant on behalf of a native title claim group ('the Quall applicants') became part of the consolidated proceedings, along with a number of native title applications where Mr Risk was the authorised applicant on behalf of a different native title claim group ('the Risk applicants'). 2 In Risk v Northern Territory of Australia [2006] FCA 404 (' Risk' ) Mansfield J dismissed the consolidated proceedings. That dismissal affected this native title application and 18 other native title applications insofar as they related to areas of land within Area A. However, those parts of this native title application and one other Quall native title application (NTD6026 of 1998) relating to areas of land in Area B were not dismissed. 3 The Northern Territory was the main respondent to the 19 native title applications in Risk and remains so in relation to this native title application. It has now applied to strike out this native title application. To avoid confusion with the primary native title application, in these reasons, I will refer to the Northern Territory's application as the, or this, "strike out application" and the primary native title application as the, or this, "native title application". 4 The Northern Territory relies on three grounds for this strike out application. First, it claims that all of the critical issues in this native title application were determined in Risk and therefore an issue estoppel arises to prevent those same issues being raised again for determination in this native title application. Secondly, it claims that in such circumstances, it is an abuse of process to raise the same issues again for determination in this native title application. Finally, it claims that in such circumstances, this native title application has no reasonable prospects of success. The Northern Territory's strike out application therefore requires an identification of the critical issues that were determined in Risk , the critical issues that are raised for determination in this native title application and a comparison between the two sets of issues to determine whether the issue estoppel arises, or whether the abuse of process exists, or whether the issues raised for determination have no reasonable prospects of success. I will consider these matters hereunder beginning with a consideration of the procedural history of this native title application. This native title application was originally lodged with the National Native Title Tribunal by Mr Kevin Lance ("Tibby") Quall on 21 October 1996. At that time, the printed application form was completed so as to state that it was being made by the applicant, Mr Quall, and others, as claimants on behalf of the Dangalaba clan. Apart from annexing a three page statement of the native title rights and interests claimed, it contained no detail of what the Dangalaba clan was. It described the lands that were the subject of the native title application, or the claim area, as: "all vacant Crown (sic land) within the "Hundred of Ayers", "Shire of Litchfield. " Also all mangrove habitat, the waters and tributaries of "Hancock Reach" and "Middle Arm" lying within the "Hundred of Ayers" excluding freehold. " The lands in question are located south-east of Darwin and south of Palmerston in the Northern Territory. I interpolate that in 1994, before this native title application was lodged, the Northern Territory Government compulsorily acquired an area of land immediately to the north of the claim area for the purposes of constructing the East Arm Port, which subsequently became the new port facility for Darwin. Some details of this acquisition process are recorded in Quall v Risk [2001] FCA 378 ( 'Quall' ) at [16]-[17]. On 3 May 2000, it was substantially amended following leave given by O'Loughlin J. No doubt these amendments were prompted by the 1998 amendments to the NT Act. The amended form of this native title application was a much more elaborate document. Mr Quall was named as the authorised applicant, again on behalf of the members of the Dangalaba clan. In Part A, Section 2, Mr Quall's authorisation as the applicant was stated to have been given at a meeting that was held at 6 Hack Court, Malak, Northern Territory on 4 August 1999. The attachment also describes the native claim group's Ancestors and the Descendents of those persons who are the predecessors of those who had an association with the subject area. (b) Traditional laws and customs Danggalaba Traditional Laws and Customs are still continuing up until the present, as there is the existence of Sacred Sites in the subject area. Traditional Laws and Customs are observed by the claimants through their spiritual and ceremonial affiliation which shows clearly their association with the area. (c) Continuing to hold native title Ownership is described in accordance with the on-going traditional rights and interests in the subject area. The native title claim group continues to hold native title with Traditional Laws and Customs taught by our Elders who have passed on, and by those who are present. The transmission of knowledge is so important to the Rights of the claimants that they establish ownership and have to mean our legal rights are recognised. Our Traditional Laws and Customs have been continued throughout time by the Danggalaba Ancestors exclusively and is continued by the Descendents who are members of the native title claim group and members of the Danggalaba clan. The following description of the history and structure, native title rights and interests, spiritual affiliation, association with the area, and activities undertaken, has been prepared in relation to the Danggalaba clan. 2. The information covers the land and waters subject to this application. The members of the native title claim group are all members of the Danggalaba clan, however, the applicant acknowledges that the information contained in Attachment S applies to a broader group than the native title claim group. 3. The native title claim group is therefore not claiming association with the area in accordance with traditional laws and customs, nor native title rights and interests to the exclusion of other members of the Danggalaba clan who are not members of this native title claim group. It was during the Kenbi Land Claim that all aboriginal claimants were borne out by the context of the evidence that all claimants were Larrakia, those who are claimants within the whole traditional boundary are within the Larrakia language. It is at this point that our group did not agree and that we did not adopt Professor Peter Sutton's new tribe and fought very hard for many years to be recognised separately and to be represented legally. Finally Justice Gray ordered that we were to be separated from the Larrakia group and that is the way it remains legally today and that is why we are arguing for the same reason. 37 ('the Kenbi Land Claim') that is mentioned in the paragraphs immediately above. The Kenbi Land Claim was made under the ALR Act. The land claimed in it is located on the Cox Peninsula which lies across the harbour from the city of Darwin and includes land surrounding the West and Middle Arms of Port Darwin: see Risk at [22]. The land within the city of Darwin could not be claimed under the ALR Act because "unalienated Crown land" is the only land claimable under that Act and land within a town is expressly excluded from the definition of that expression in the ALR Act: see s 3. Even before that, in the first report of the Royal Commission which led to the introduction of the Land Rights Act, Mr Justice Woodward referred to the dispossession of the Larrakia people and their desire to acquire title to land in and around Darwin for community living purposes. A claim was made to the Interim Land Commissioner in 1975 for part of the Cox Peninsula. When the Land Rights Act came into operation, the part of the Cox Peninsula now known as the Belyuen community became Aboriginal land. The long history of the land claim is largely the result of litigation associated with it. Before it was lodged, the Northern Territory Government promulgated regulations which had the effect of rendering the Cox Peninsula unclaimable, by classifying it as land in a town. The High Court of Australia held that the first Commissioner, Mr Justice Toohey, was obliged to decide whether these regulations were invalid. The fourth Commissioner, Justice Olney, held that the regulations were invalid, because they were made for the purpose of preventing a claim to the Cox Peninsula under the Land Rights Act, not for the purpose of town planning. That decision was upheld by the Federal Court of Australia and the High Court refused special leave to appeal. In the meantime, there were legal proceedings involving the second Commissioner, Mr Justice Kearney, the High Court and the Federal Court, on the question whether the Northern Territory Government was obliged to disclose certain documents in its possession, relating to the validity of the regulations. The third Commissioner, Mr Justice Maurice, was also disqualified from hearing the claim by the Federal Court on the ground of reasonable apprehension of bias, as a result of some remarks he made during the hearing of another land claim. In 1989 and 1990, Justice Olney conducted a lengthy inquiry into the land claim. His Honour produced a report, in which he concluded that there were no traditional Aboriginal owners of the land claimed. That finding was set aside by the Federal Court and the matter came to me, the fifth Commissioner. The claim has undergone changes over the years as to the manner in which it has been put. Even during my inquiry, between 1995 and 1999, a group of people who were not claimants at the outset asked me to treat them as claimants, and some people who were part of one claimant group asked that they be treated as a separate claimant group. These changes required the preparation and dissemination of material and the hearing of evidence not contemplated when the inquiry began. By the end of my inquiry, four groups of claimants were attempting to establish that their members are traditional Aboriginal owners of the land claimed. For convenience, these groups are called the Tommy Lyons group, the Larrakia group, the Belyuen group and the Danggalaba group. 13 To put these statements in context, the Larrakia group referred to above, is the same group in the Risk applicants: see [429] at Risk. The Northern Land Council represented the Risk applicants in both Risk and in the Kenbi Land Claim proceedings. Some of the people identified as the Danggalaba group members in the Kenbi Land Claim were among the Quall applicants in Risk : see Risk at [429]. The group is bound together by its linguistic affiliation. Although I have doubts as to whether it is properly described as 'local', I am bound by authority to hold that the Larrakia group is a local descent group. The Danggalaba group consists of an indeterminate number of people said to be descended from a member of the Danggalaba clan. Those who contend for the existence of this group sought to be represented separately from other members of the Larrakia group and to make a claim to the exclusion of all other groups. They contended, but did not establish, that an error had been made in the genealogies of the Larrakia group and that a man shown on those genealogies as the son of a key ancestor had been the husband of that ancestor, and the adoptive father of her children. The Danggalaba group is not a group. Not all of the putative members of the Danggalaba group accept the principle of a descent on which the group is said to be based. Some do not accept that they are members of such a group. The Danggalaba group is not a local descent group. 14 However, it must be emphasised that the ALR Act sets out substantially different criteria for a successful land claim to that set out in the NT Act for a successful native title application. The differences between the two pieces of legislation in these respects are mentioned by Mansfield J in Risk at [437] and are aptly summarised in Griffiths v Northern Territory of Australia (2006) 165 FCR 300 at [71] --- [74] per Weinberg J. It follows that these findings of Gray J in the Kenbi Report cannot be transposed to either this native title application, or the Risk native title applications. Nonetheless, they did provide some forewarning of the difficulties Mr Quall might face in the future in attempting to assert the claims of the Danggalaba Clan. It will be sufficient, for the moment, to say that, through Mr Risk, the Larrakia people have made several claims for determinations of native title over land and waters in the Darwin area. It is also sufficient to say that Mr Quall has also made many like claims on behalf of the Danggalaba Clan. However, whereas the Larrakia claims are over relatively larges areas, Mr Quall's claims have been over smaller areas. The model of the Danggalaba Clan shows the genealogical and ancestral descent. The genealogy of the upper level is attached. This evidence is relevant to the Kenbi Land Claim. 16. Previous anthropological research on the Larrakia was conducted by Based (sic Basedow) Spencer, Warner, Elkin, Bandit McCarthy, Walsh, Rose Sutton and Graham. All confirm that the subject area is undisputed Larrakia country and not claimed by other groups. Early ethnographers (Spencer, Elkin, Berndt and McCarthy, cited in Brandl, Walsh 1979: 15) confirmed the Larrakia historically were comprised of exogamous clans each having its own "totem" or "dreaming", were inherited from the father (see Brandl, Haritos and Walsh 1979; 15-16, 154-155). 17. It was, and still is the same patrilineal group, we are still the same spiritual dreaming, nothing has changed. The above statement is true although we are not history, we are still alive and kicking. The clan remains intact. The native title claimant group traced their descent from the Dungalaba ancestors, who are not designated in the Northern Land Council anthropological genealogy they recommend the Larrakia prepared for the Kenbi Land Claim. Their reference K.G. 12-19 is the Deeja Bilawuk Batcho families. The Native Title Claim Group not only has matrilineal connection but have during the Kenbi Land Claim clearly stated patrilineal descent. For this reason we do not belong to the Larrakia sub-group/family. And for this reason Tommy Lyons Imabulk K.G. 3 is also a separate group identified during the Kenbi Land Claim having apical ancestral connection of the upper level, being patrilineal. The survival of the clan is apparent to the model and kinship of the Dungalaba Clan. Several clans once existed a long time ago, but not that long ago that Aboriginal people cannot remember their descent from such ancestors. It was during the Second World War that many Larrakia people were displaced and died from sickness having been sent to foreign country around Australia. It is through the upheaval, misfortunes and dislocations that preceded, that the Dungalaba Clan, the traditional people for this country, now exists to carry on the tradition and customs for this country which is called Darwin. Darwin and Cox Peninsula is within the area occupied by Aboriginal people speaking the language known as Larrakia. 18. The traditional land area of the boundary is Cox Peninsula and islands to the Finniss River, along the river going north of Darwin River to 47 miles to the Marrakii Crossing along Adelaide River to Gunn Point including the Vernon Islands along the coast to Cape Hotham. ... Native Title Claim Groups, Danggalaba Model 21. The Tomy Lyons (dec) Group Frank Belyeun Secretary (dec) Boby Secretary (dec) Topsy Secretary and families (dec Olga Singh (dec) Linda Danks (dec) and families Prince of Wales Jason Singh Raylene Singh Zoe Singh Kathy Mimyama Batcho Families Pat Lawrie (dec Sam Gunduk (dec) Dolly Gurrinyee (dec) Victor Williams (dec) and families Lindy Quall (dec) and families Yula Williams and families Lucy May and families Mary Raymond and families Rona Ally and families 22. We are not a language group, incorporated company group, association inc, we are a Clan group, a traditional tribe. Once when our ancestors were abundant and thriving, there existed the traditional Aboriginal society made up of clan groups who lived in the Darwin area and greater Darwin Rural area. ... 26. The Danggalaba clan are people who have links and have always kept together and respected each other. It is a major factor in maintaining our attachment to the land, sites and spiritual dreaming. The clan is the landowners, the lawmakers and custodians of the Danggalaba heritage and culture. Because other clans no longer exist we are considered the "bosses" for this country. A language group cannot take over our clan. We are "bosses", the traditional owners because we have heritage and culture. We inherited the knowledge to show that we exist. The Danggalaba clan succeeds traditional ownership because of the fact that no other clan exists. The knowledge of sacred significance has been passed on to us by way of ceremonial Aboriginal traditions. By Aboriginal way, the knowledge proves family ownership of land. It is important to bear in mind that these assertions were made in Attachment S in this native title application some seven months before Gray J delivered the Kenbi Report where the existence of the Danggalaba Clan as a separate local descent group was rejected, albeit under the ALR Act: see [13] above. The Danggalaba Clan was the sole surviving clan of the Larrakia people (see paragraphs 17 and 26). b. The Danggalaba Clan comprised the traditional Aboriginal people for Larrakia country (see paragraph 16) which was described as including Darwin itself and the greater Darwin area extending to Cox Peninsula and the islands to the West, Finniss River to Marrakai Crossing in the south and Adelaide River to Cape Hotham in the west (see paragraphs 17 and 18). c. The Danggalaba was a patrilineal descent group (see paragraph 17). e. However, the Danggalaba clan claim group did not make its claims to the exclusion of other members of the Danggalaba clan who were not members of this claim group. In this respect, the heading to paragraph 21 "Native Title Claim Groups" is probably intended to indicate the other members of the Danggalaba clan beyond the eight listed in Schedule A. Those attachments contained detailed descriptions of the longitude and latitude references for the land the subject of this native title application, but did not alter the substance of it. Those areas of land are immediately to the north of the lands claimed in this native title application and are within the Area A part of this native title application that was subsequently dismissed in Risk . The trial of these native title applications was to commence in Darwin on Monday 19 March 2001. 20 When that trial began on 19 March 2001, Mr Risk applied to have the hearing of his two native title applications adjourned and, at the same time, he applied to have Mr Quall's native title application struck out. Mr Risk's strike out application was supported by the Northern Territory, among others. It was put on three bases: that Mr Quall had failed to comply with various orders of the Court; that the native title application did not comply with s 61(4) of the NT Act, relating to the identification of the native title claim group; and that the native title application had no reasonable prospects of success. 21 O'Loughlin J heard Mr Risk's application and decided he had no alternative but to dismiss Mr Quall's native title application: see Quall at [77]. In coming to that conclusion, O'Loughlin J dealt at length with Mr Quall's inability to describe the native title claim group he claimed to represent in that application, ie the Danggalaba clan - the same Danggalaba clan as Mr Quall claimed to represent in this native title application. The Larrakia people, represented by Mr Risk, are prepared to include Mr Quall and the Danggalaba clan as part of their native title claim group. That, however, is not acceptable to Mr Quall; he maintains that the Danggalaba clan, to the exclusion of those who are represented by Mr Risk, alone has the native title rights over the land and waters that are the subject of the two sets of proceedings. He claims that those whom he represents wish to be separately represented as they are of the view that their interests do not correspond with those of the Larrakia people. It will be noted that this is the same position as Mr Quall expressed in Attachment S in this native title application, as set out above at [16] and [17]. 23 O'Loughlin J noted that Mr Quall asserted he was making his native title application: "... on behalf of the Danggalaba clan, a group that he identified as being 'traditionally of the Kulumbiringin Larrakia tribe' ....": Quall at [34]. It will be noted that this description of the native title claim group is the same as that described in the May 2000 amended form of this native title application (see [6] and, particularly [9], above). His Honour then turned to consider who it was that Mr Quall represented, ie who the native title claim group was ( Quall at [36]-[59]). First, he noted that in the original native title application filed with the Native Title Tribunal on 29 September 1998, Mr Quall claimed the application was made "... on behalf of the applicant and others as claimants", described as "the Danggalaba clan": Quall at [36]. No other details were provided of the Danggalaba clan. This is similar to the original form of this native title application (see [5] above). 24 Secondly, O'Loughlin J noted that in the first of three amendments made between September and November 1999, Mr Quall described the capacity in which he claimed to make the application as "claimants of the native title group" identified as eight people, who had authorised him to make the application on behalf of the group at a meeting held at 6 Hack Court, Malak. Whilst O'Loughlin J has not recorded the date of this meeting, because the address is identical, I infer that it was the same meeting at which Mr Quall was authorised to make the May 2000 amended form of this native title application (see [6] above). Further, whilst the eight people are not named by O'Loughlin J, I infer that they, too, are the same eight people who comprised the native title group described in Schedule A of the May 2000 amended form of this native title application (see [6] above). The Applicant group is a group of Aboriginal people who are known as Danggalaba who have genealogical and ancestral connections (through actual and putative descent from) as an indigenous community since time immemorial. ' ... 10. The Danggalaba are descendants of ancestors of Danggalaba Aboriginal people who survived the frontier of colonialism of Northern Australia. The Ancestors of the claimant group, Danggalaba are: TIMBAT, BLANCHIE, PAT LAWRIE GUDADJIK, GUNDOOK (SAM), GURRINYEE (DOLLY), BILLAWUK (DEEJA). Of greater significance however, is the fact that it is not identical to the group description that is contained in other documents that were in the same bundle of documents. I turn then to identify the more significant of those documents. ... Native Title Claimants, Danggalaba Model ... The membership of the Danggalaba Clan have a principal dreaming UNGA the Crocodile DANGGALABA gunimidjinda, saltwater specie. As I have said, the information in his proposed amended application is at odds with his points of claim, with his accompanying affidavit, with his original family of eight and with the information in his bundle of documents called "Factual basis for the Native Title Rights and interests claim". That deficiency can only be regarded as fatal: and, after two and a half years, I have no confidence that the deficiency can be remedied. Furthermore, there is the further problem that Mr Quall has not advanced any material that would suggest that he has the authority of the members of his alleged group to make an application on their behalf. 30 That, of course, brought an end to Mr Quall's native title application numbered NTD6044 of 1998. However, Mr Quall had numerous other native title applications on foot at the time, including this native title application. Whilst the decision in Quall did not directly affect this native title application, given the close similarity between the two native title applications and, particularly the descriptions Mr Quall gave of the native title claim group in Quall and those in this native title application, that decision did serve as yet a further forewarning of the difficulties Mr Quall could face in the future in attempting to assert the native title claims of the Danggalaba Clan --- this time in the context of the NT Act. There were three different groups of native title applicants affected by that consolidation order. They are identified in Risk (at [2]) as the Larrakia applicants, ie the first applicants in Risk , the Quall applicants, ie the second applicants in Risk and the Roman applicants, ie the third applicants in Risk . The Risk applicants are obviously the same group as the Risk applicants that have already been referred to above. The Roman applicants subsequently obtained leave to discontinue their application (see Risk at [13]). 32 The Quall applicants had lodged eleven native title applications in all. Mr Quall was named as the authorised applicant in each: see Risk at [2]. The eleven native title applications included this native title application, eight other similar applications and two other different ones: numbered NTD6018 and NTD6019 of 1998. As counsel for the Northern Territory pointed out in submissions before me, the latter two native title applications were in the same form as this native title application was after the May 2000 amendments: (see [6]-[10] and [16]-[17] above). Specifically, the latter two applications were said to be made on behalf of the Danggalaba Clan comprising eight people with the surname Quall. The other nine Quall applications were affected by further amendments, details of which are set out immediately below: see [33]-[37]. This distinction between the two sets of Quall applications is mentioned in Risk at [10]. Those amendments made some significant changes to the name of the native title claim group, the membership thereof and the basis upon which each native title application was being pursued. However, it is notable that the areas of land covered by this native title application remained the same, but they were described as Kulumbiringin land instead of Larrakia country (compare [16(16)], [16(18)] and [17b. ] above with [36-3] below). The following paragraphs provide a summary of those amendments. 34 First, the name of the native title claim group was changed in Part A, Section 2 from the members of the Danggalaba clan to the Kulumbiringin. Secondly, schedule A was changed to claim that the native title claim group was comprised of Yula Williams and seven other people with the surname Williams, Mary Raymond and seven other people with the surname Raymond, Rona Alley and five other people with the surname Alley and Ron Quall and four other people with the surname Quall, including Mr Tibby Quall. By comparison with the membership described in schedule A in the May 2000 amended form of this native title application (see [6] above), eight Williams, eight Raymonds, six Allys and Denise Quall were added and four people with the surname Quall were excluded, ie Kevin, Natasha, Sarah and Linda. However, with one exception I will mention in a moment, the membership of this claim group was essentially the same as that described in clause 21 of Attachment S in the May 2000 amended form of this native title application (see [16(21)] above). This suggests that the membership of the native title claim group was expanded to include all the members of the Danggalaba clan (see [17e. ] above). The notable exception is that the Tommy Lyons group has been omitted. The same omission has occurred in the recast form of Attachment S (see [36-4] below). 35 Thirdly, some changes were made to Schedule F. The first part of it remained the same, including the section headed (a) association with the area. However, section (b), which was headed "traditional laws and customs", was changed to replace the Danggalaba clan with the Kulumbiringin. The same change was made throughout section (c) which was headed "continuing to hold native title". We are a clan group that still exists since time immemorial. The rights and interests we share is the knowledge that has been passed on from ancestors of the past to the present decedents, who are today in claiming our heritage. The rights and interests come from traditional laws and customs by way of on-going ceremonies that have been done exclusively by Kulumbiringin men and women in the Darwin area and adjacent land, the Cox Peninsula. We are connected by the Kulumbiringin dreaming tracks that come from creation time. Nothing has changed. It is only by way of the Kulumbiringin ancestors that the knowledge is with us today. We have our customary rights and interests passed on from ancestors who have maintained the customs and more through ceremonies and customs affiliated to our families. Some parts were omitted entirely; other parts were retained, but placed under different headings with slightly different wording; and some parts were added. The introductory clauses including the statement as to the non-exclusive nature of the native title claim group were omitted (see at [9(3)] and [17e. ] above). This appears to be correlated to the expansion of the native title claim group to include all the members of the Danggalaba claim (see [34] above). 2. We have not given permission to the Northern Land Council to add our names to the Larrakeyah Language group claimants list. We have not been consulted for authorisation to add our names. The records show that they were Larrakeyah people and that they were employed as such [during the mid 1900s]. Our families were not taken away under the "half caste" policy because they were not considered as "half caste" and that they remained in Darwin all the time and worked as labourers, cooks, cleaners, housemaids, and many other employment duties for the Government establishments and private enterprises. Our families carried on the traditional customs and laws and that they were the ones that maintained the ceremonies. To this day we would not recognise any of those persons who call themselves the Larrakeyah language group to have ever been to partake of any Larrakeyah ceremony of the past, let alone maintain such responsibilities. Our family participated in the ceremonies until it stopped at the Larrakeyah Barracks and moved to Cox Peninsular called Darramarrangamanidg. It was during the Kenbi land claim evidence showed that most larrakeyah language group learnt evidence from reading the material from books. There is no other way, according to tradition laws and customs. Unlike, to actually belong to such a group as a language group. To say that everyone belongs to a language group is nonsense. The aboriginal law does not allow that sort of a group. Aboriginal descent and law and customs are determining the future. It is something that's there before you were born. You inherit it. It's the law and customs that distinguishes your presence and its not going away. To belong to tradition is to remain within your culture. A language group means that all as a group having the same language denotes land owners. Quite the opposite to moieties. The moiety system designates a division because of aboriginal law and customs. Aboriginal law and customs does not come from a language group or make a language group. 3. The paragraphs describing the identity of the Danggalaba Clan vis-à-vis the Larrakia/Kulumbiringin tribe (paragraphs 4 and 14 of the original Attachment S --- see at [10] above), the Danggalaba Model and Heritage (paragraphs 15-17 inclusive of the original Attachment S --- see at [16] above) and the Danggalaba membership (paragraphs 21-22 inclusive of the original Attachment S --- see at [16] above), have all been omitted. We define our group as a kinship group, a Community group (collective family) and a local group. The group acknowledges and practices the traditional and customary cultural law because of its eternal connection to Aboriginal Land in the Darwin region, and subject areas, what we call Kulumbiringin land. Kulumbiringin is the original name of Aboriginal people who have lived here from time immemorial and still do at present. It is the traditional name. It is our language. We consider that 'Larrakeyah' is a word that has been used in historical times to describe the Aboriginal people of the Darwin region. Nonetheless, this term will be used in this report where it has been used in referenced sources. Our ancestors and our families have been named as being Larrakeyah, Kulumbiringin, Binimidginda and Gummajerrumba; (Basedow 1906). Clan names that have survived are Danggalaba and Marri. The name that has been used the most to describe the aboriginal people who have a long history of Darwin has been the name Larrakeyah. ... T Secretary (deceased) A Elder, a Tribal leader, and a legitimate witness of land claims of Darwin and the Kenbi land claim distinguishes the word Larrakeyah as a non Aboriginal word and insists that the real word describing Aboriginal people of Darwin is Kulumbiringin. It is only traditional Aboriginal name, for this land and its people who originated here. It is not a name that was invented. To follow one's decent traditionally supposes that the roots from the past must follow on to the present like ecology, a species survives if it keeps its link to the past strong and unbroken. We, the native title claimant group members who have survived today, can show that we were connected to this land and that we have maintained this connection, which enables us to make the present application. We claim our rightful ownership of this country and therefore have to exclude others who are not of the Kulumbiringin native title claimant group. We can produce numerous proofs of an ongoing connection to the land and to our traditional Ancestors. The families who constitute the native title claimant group are a local group in every sense of the term. We are indigenous to this country and we carry on a tradition of customs and law. The native title claimant group as a cultural group has a physical, cultural, spiritual affiliation to the land. This group has a connection of spiritual and religious totems which are significantly attached to them and the land. In Aboriginal law, family groups hold a place of importance and hold customary roles, and responsibilities to practice and to withhold. The significance of such totems defines the relationship between people and land. The many sacred sites are our responsibility. We are custodians. They are joined spiritually to us, it is our religion. To not recognise our spiritual attachment to the land is an insult to aboriginal culture and the aboriginal race of Australia. Aboriginal law is one law which is designed for the purpose of connecting groups of people to the ongoing of aboriginal culture, it is recognised since the Mabo case. 4. Their children include: Linda Quall (deceased) Mary Raymond, Rona Alley and Yula Williams. Yula's children, Linda's children, Mary's children and Rona's children are also descendants who constitute the native title claimant group. Membership to this native title claimant group implies to be a descendant of Yula Williams, Linda Quall (deceased), Mary Raymond and Rona Alley. Members of the group can trace their descent to the Kulumbiringin apical ancestors either through the male and female line, a requirement for Aboriginal law. Persons who are not Kulumbiringin by descent do not have a Kulumbiringin affiliation. The native title claimant group affiliation and connection to the land through law and customs hold a spiritual and religious attachment by Aboriginal law. 37 From the time of the October 2001 amendments, throughout the hearing of the consolidated proceedings in Risk and, indeed, to the present time, this native title application has remained in the same form. In particular, it was and is said to be made on behalf of the Kulumbiringin native title claim group as described in the foregoing paragraphs. As seen above, he filed 11 native title determination applications under the NT Act. The native title claim group is referred to in DG6018/1998 and DG6019/1998 as 'members of the Danggalaba Clan', comprising eight people, including Mr Quall, Ronald Keith Quall, Diana Deeja Quall, Phillip Rupert Quall, Kevin Andrew Quall, Natasha Anne Quall, Sarah Audrey Quall and Linda Muriel Quall. In other applications, the native title claim group is referred to as the 'Kulumbiringin', comprising the descendents of Kulumbiringin ancestors 'according to Aboriginal law and custom', including four elders and their family groups. The four elders include Yula Williams, Mary Raymond, Rona Alley and Ron Quall. As noted, all of the individuals named in the Quall applications are listed as Larrakia people in the list of Larrakia people on whose behalf the Larrakia applications are made. Mr Quall, the named applicant for the second applicant group, submitted that the Larrakia people ought not be awarded native title over the claim area, as the group is simply a language group. He submitted that the members of the Larrakia applicant groups have lost their culture, and that it is the Danggalaba clan (or the Kulumbiringin clan) who have continued to observe and acknowledge traditional laws and customs and to maintain their connection to the relevant land and waters. In particular, as the quotations we have given suggest, the tenor of what is said about laws and customs seems group specific (ie "our laws" and "Aboriginal laws and customs of other groups"). [176] ... The applications in which the claim groups were framed as being named descendants of Kulumbiringin ancestors having fallen away in closing oral submissions (unsurprisingly given the evidence of three of the four named elders in the Quall/Kulumbiringin applications), his Honour was then left with the claim of the Danggalaba Larrakia clan --- a claim which, probably, was required to be assessed in light of the above finding but which his Honour rejected on another basis. It was this claim that his Honour addressed primarily in his reasons. Some of the evidentiary difficulties Mr Quall had in adducing evidence in support of both the Kulumbiringin case and the Danggalaba clan case are identified by Mansfield J in Risk at [796]-[797]: see [42 below]. Mansfield J delivered his decision on 12 April 2006. It is difficult to convey in words the enormity of the task undertaken by Mansfield J. The hearing lasted 68 days in all. It involved 47 Aboriginal witnesses, 26 witnesses called by the respondents and numerous expert witnesses. The evidence incorporated many thousands of pages of transcript and exhibits, including the transcript of the Kenbi Land Claim hearing (see Risk at [434]). The decision extended to almost 270 pages. Within the geographical area which includes the claim area, at sovereignty (1825), at settlement (1869) and thereafter during the 19 th Century, there existed an Aboriginal society, namely the Larrakia peoples (which for convenience, his Honour assumed included both the Risk applicants and the Quall applicants: see at [96] and [794]), that had a normative system by reason of their traditional laws and customs which created rights and obligations possessed by them in relation to the land and waters of the claim area: see Risk at [232]-[233]. 2. The present society comprising the Larrakia peoples do not have rights and interests possessed under the traditional laws acknowledged, and the traditional customs observed, by the Larrakia peoples at sovereignty in the sense explained by the High Court in Members of the Yorta Yorta Aboriginal Community v Victoria [2002] HCA 58 (' Yorta Yorta' ), because as a result of a combination of historical events which occurred during the 20 th Century there has been a substantial interruption in the practice of the traditional laws and customs of the Larrakia peoples as they existed at sovereignty and at settlement, so that their practise and enjoyment has not continued substantially uninterrupted since sovereignty (see Risk at [812]-[823] and summarised at [834]-[835]). [796] I reach the same conclusion if I address that issue concerning the laws and customs of the Danggalaba clan. Mr Quall claimed that clan is the only one which has maintained the traditional laws and customs of the society which existed at sovereignty and to the present time. I am mindful that I should distinguish between his evidence and his submissions. It is of course necessary to have regard to all his evidence. I have done so. I also have regard to his submissions, but only to the extent that they have a foundation in the evidence. The assessment of his claim must also be made upon the whole of the evidence. [797] Mr Quall was clearly not supported by other persons (other than his sister) who, he said, were members of the Danggalaba clan. His sister Dianne Quall also was less precise than Mr Quall about the independent significance of the Danggalaba clan and the details of its laws and customs. Other persons who Mr Quall said were members of the Danggalaba clan, some of whom he described as the seniors or elders of that clan, gave evidence about the existence of the wider group comprising the first applicants. Their evidence did not explain with any precision the separate, independent existence of the Danggalaba clan. Nor did they regard it as the current, ultimate repository of the laws and customs of their predecessors in the Darwin area. They did not describe the laws and customs of the Danggalaba clan as distinct from those of the first applicants. ... [798] There is therefore uncertainty, or inconsistency, about the composition of the Danggalaba clan and the rules governing its structure. There is also, on the evidence, no satisfactory foundation for finding that the second applicants practise and enjoy certain rights and interests which arise under laws and customs which they only have inherited from or had passed on to them by their predecessors back to sovereignty. On the evidence, there is also no satisfactory foundation for concluding that the laws and customs reflect or derive from the normative system of the Aboriginal society which existed at sovereignty. ... ... [800] Accordingly, I am not satisfied that there is a separate more confined society of Aboriginal persons comprising the second applicants who, alone among those who comprise what Mr Quall called the wider 'Larrakia language group', possess rights and interests under 'traditional' laws and customs by which they have a connection to the land and waters of the claim area. [801] Indeed, the fact that there was a diversity of evidence about the composition and status of the Danggalaba clan, both from persons who Mr Quall claimed to be members of that clan, and from other witnesses, together with the fact that there was diversity of evidence about the laws and customs of that group compared to those of the wider group comprising the first applicants, tends to support my more general conclusions referred to below. Native title does not exist in relation to any part of the land or waters the subject of the applications comprising this consolidated proceeding as described in the attached Consolidated Proceeding Claim Area List. I have summarised the effect of these orders on this native title application at [2] above and I do not need to repeat that. I should add that the southern part of the claim area in this native title application, ie the lands in Area B, are immediately to the south of the southern boundary of Area A. The lands in Area B are located in the Litchfield area about 20 km south-east of the Darwin CBD and about 10 km south of the Palmerston CBD. The Full Court dismissed both sets of appeals. The main thrust of Mr Quall's appeal before the Full Court was an assertion that Mansfield J "failed to consider the substance of the case advanced by the Quall appellants at trial and by so doing did not properly identify the relevant society that was the source of the traditional laws and customs by which, at sovereignty, the Larrakia people had rights and interests in the application area" (see Risk FC at [115]). The relevant society was described to the Full Court as "the Aboriginal society in the region stretching from Cox Peninsula to West Arnhem Land", including the Larrakia people, which society was referred to variously as the 'Top End society' or 'people of the Top End'": see Risk FC at [115]. Hereafter in these reasons, I will refer to this as 'the Top End society case'. 45 The Full Court conducted a thorough review of the case Mr Quall advanced at trial ( Risk FC at [120]-[147]) and concluded that no such case was put to Mansfield J. In the process, it reviewed Mr Quall's evidence and submissions including his opening statement before Mansfield J ( Risk FC at [134]), parts of his evidence ( Risk FC at [135]-[137]), other evidence he relied upon ( Risk FC at [155]) and his oral ( Risk FC at [142]-143]) and written submissions ( Risk FC at [144]-147]). Finally, it reviewed the decision in Risk ( Risk FC at [148]-[156]). It then reached a series of conclusions in which it soundly rejected Mr Quall's appeal ( Risk FC at [164]-[179]). They proceeded along the following lines. A fair reading of the applications would not reasonably lead the audience to which they were addressed to any other conclusion. The Schedule F description of the traditional laws and customs in the illustrative application in the Second Supplementary Appeal Book makes no reference to any wider laws and customs or to any broader society. Attachment S to Schedule S of the application is both dense and not free from ambiguity. It does not, in the context of what is said in the application, convey any clear contrary meaning. To have ascribed to it the meaning suggested in this appeal requires that it be divorced from its context and that distinctive "dictionary" meanings be given to particular terms and notably to "Aboriginal Law", though such were not given to his Honour. ... [171] - set out at [38] above. [172] Distinctly, the two written submissions so much relied upon in support of the appeal cannot sustain the weight given them. The second of them, and probably the first as well, were filed after the conclusion of the evidence. The second, as his Honour seems to indicate, would appear to contain some degree of assertion which lacks a basis in the evidence. The Northern Territory has made a submission to this effect. Insofar as the second submission is said to reveal Mr Quall's case on a basis different to that which we consider had been put to that point, it by no means does so unequivocally or unambiguously. On the contrary. It repeatedly refers to Danggalaba Larrakia Laws and Customs --- a usage wholly consistent with one of the two bases on which the primary judge assessed the Quall appellants' case. 47 Secondly, Mr Quall did not put a case to Mansfield J based upon the Top End society and Mansfield J was not required to consider or make findings about such a case, ( Risk FC at [176] - set out at [38] above). More fundamentally, however, it was concluded (i) there was uncertainty or inconsistency about the composition of the Danggalaba clan and the rules governing its structure: [797]-[801] ; (ii) there was no satisfactory foundation for finding that the Quall appellants practise and enjoy certain rights and interests which arise under laws and customs which only they have inherited from, or have been passed on to them by, their predecessors back to sovereignty: [797]-[798]; and (iii) there was no satisfactory foundation for concluding that the Danggalaba laws and customs reflected or derived from the normative system of the Aboriginal society which existed at sovereignty: [798]. The High Court rejected that application on 7 March 2008. There is no - if there was a document that said that we did, well, you know, I would believe it. But my family never left Darwin, they always remained in Darwin, and practising of traditional laws and customs has always taken place, and there was no strict regulations even during the time of Aboriginal people being incarcerated in Cullen Bay or other regulation that were made for Aboriginal people. They were not consistent of confining Aboriginal people to practices of traditional laws and customs. The evidence that I provided, all the traditional evidence that I provided was not accounted for, and our position that we were - we had no similarities with the Larrakia's evidence. Their evidence was based on hearsay provided by the Land Council, and even - you could look at the documents of the affidavits made by the Land Council, Bill Risk and Pauline Baban who were members of the stolen generation, the evidence that we provided, that we always opposed the Larrakia claim because we had no similarities with the - on our evidence with theirs. The Full Court of the Federal Court of Australia examined those issues and considered that there had been no failure of the kind alleged. We see no reason to doubt the correctness of those conclusions of the Full Court. The particular complaints advanced in the course of oral argument this morning focused upon the assessment of the evidence led at trial that had been made by the trial judge. In this respect, we are not persuaded that an appeal to this Court would enjoy sufficient prospects of success to warrant a grant of special leave to appeal. For these reasons, special leave to appeal is refused. At the first directions hearing on 22 April 2008, I ordered Mr Quall to file and serve any affidavit material upon which he wished to rely. On 6 May 2008, Mr Quall affirmed an affidavit in which he complained that he was not able to properly present his case before Mansfield J because of a lack of resources and funding. More significantly still, he gave no indication that he wished to present a different case to that argued before Mansfield J --- only that he would have been able to present that case more strongly. 53 Mr Quall was represented by counsel at each of the hearings of this strike out application. He successfully sought a number of adjournments to allow him further time to present further materials and to prepare his opposition to the application. He did not file any further evidence. Ms Brownhill said the Northern Territory relied upon O 20 r 4(2) of the Federal Court Rules which she submitted applied to these proceedings because they were issued before 1 December 2005. 55 Relying upon the High Court's decision in Members of the Yorta Yorta Aboriginal Community v State of Victoria and Ors [2002] HCA 58 ; (2002) 214 CLR 422 (' Yorta Yorta' ) Ms Brownhill submitted that there were seven matters an applicant needed to establish to succeed in a native title determination application such as this. 56 Ms Brownhill submitted that these matters were identified by Mansfield J in Risk at [46]-[58] and his Honour confirmed at [230] that it was necessary for the applicants to establish all of these matters to succeed. She submitted that this native title application (NTD6013 of 1998) is a Kulumbiringin type application. There are eleven native title determination applications for which Mr Quall was the named applicant. In two of these the native title claim group is referred to as "members of the Danggalaba Clan". In the remaining nine the group is referred to as (listed) "descendants of Kulumbiringin ancestors and constitute the Kulumbiringin according to Aboriginal law and custom". As we understand it from the appellants' reply submissions, "Kulumbiringin" was the term used by the Larrakia people to describe themselves at the time of sovereignty. The significance of this community of identity will become apparent below. The word "Danggalaba" refers to a clan, or subset, of the Kulumbiringin tribe. The primary judge found that, though the Larrakia had a patrilineal clan system which had ceased to exist, the Danggalaba was the one clan that continued to exist: [558]. In the material before us there has not been altogether consistent usage of these descriptors. Equally Mr Quall on occasions used the terms "Danggalaba Larrakia" to refer to the clan as such. 58 It followed, so Ms Brownhill submitted, that the terms 'Larrakia' and 'Kulumbiringin' both refer to the Larrakia people and where Attachment S is referring to Kulumbiringin country, it is referring to the same country as Larrakia country. She referred me to a map prepared by Tindale that was in evidence before Mansfield J which shows the country around Darwin as Larrakia country. Further, she pointed out that all of the people named in Schedule A to this native title application were named in the wider Larrakia claim group in Risk : see Risk at [9], [10], [34] and [795]. Indeed, as Mansfield J records in Risk at [797], they gave evidence in support of the wider Larrakia claim group and not the narrower Danggalaba claim group postulated by Mr Quall. Ms Brownhill also pointed out that the Full Court had made a number of observations to the effect that the Kulumbiringin and the Larrakia were the same people: see for example Risk FC at [156] and [176]. She submitted that the term 'Danggalaba' was used to describe the last remaining patrilineal clan group of the Larrakia in Risk at [488]-[490], and particularly at [558]. 59 Ms Brownhill submitted that the claims made by Mr Quall in Attachment S to this native title application, to the effect that the Kulumbiringin were distinct from the wider Larrakia and that the former were the relevant Aboriginal society at sovereignty, while the latter were not, were rejected in Risk . In support of this submission she took me to the observations of the Full Court that Mr Quall's claim fell away before Mansfield J from one involving the Kulumbiringin tribe to a claim involving the Danggalaba Larrakia clan (see Risk FC at [176]). She submitted that this claim was rejected by Mansfield J in Risk at [795]-[801] on the basis of an insufficiency of evidence and the Full Court confirmed as much in Risk FC at [177]. 60 Ms Brownhill emphasised that the Top End Society identified by Mr Quall's counsel before the Full Court differed again from any of the groups mentioned above, as appears from the Full Court decision: Risk FC at [117], [121] and [157]. 61 Ms Brownhill pointed out that the Full Court concluded that this Top End society case was not put to Mansfield J in Risk and that his Honour properly determined the case that Mr Quall did put, ie that based on Kulumbiringin laws and customs and/or Danggalaba laws and customs: Risk FC at [167] and [175]-[176]. 62 On the principles relating to issue estoppel, Ms Brownhill referred me to the three High Court decisions of Kuligowski v Metrobus [2004] HCA 34 ; (2004) 220 CLR 363 (' Kuligowski ') at [40] per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ, Ramsay v Pigram [1968] HCA 34 ; (1968) 118 CLR 271 at 276 per Barwick CJ and Blair v Curran [1939] HCA 23 ; (1939) 62 CLR 464 at 532 per Dixon J. Based on these authorities, she submitted that the findings made by Mansfield J in Risk related to the ultimate facts which founded any successful native title application and Mansfield J had made a final decision thereon. 63 Ms Brownhill conceded that the parties in the consolidated Risk proceedings were not identical to the parties in this native title application because the Litchfield Shire Council is a respondent in this native title application and was not a party in Risk . However, she submitted that the addition of this party did not affect the application of the principles of issue estoppel because the decision of Mansfield J in Risk was a decision in rem . On this point Ms Brownhill referred me to a series of decisions including: PE Baker v Yehunda (1998) 15 NSWLR 437 at 442 and 446, per Hope, Samuels and McHugh JJA; Wong v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 51 at [44] per Lindgren J; Brock v Minister for Justice and Customs [2007] FCA 2091 at [65] and [70] per Flick J; Wik Peoples v Queensland [1994] FCA 967 ; (1994) 49 FCR 1 at 4 per Drummond J and WA v Ward (2000) 99 FCR 316 at [190] per Beaumont and von Doussa JJ. That there has been no substantial interruption in the acknowledgment and observance of the laws and customs of that society of Larrakia/Kulumbiringin peoples since sovereignty. 65 On the principles relating to abuse of process, Ms Brownhill referred me to the decision of Spalla v St George Motor Finance Ltd (No 6 ) [2004] FCA 1699 (' Spalla ') at [58]-[70] per French J. She submitted that the two conclusions referred to above were critical to the determination of this native title application and it would be an abuse of process to allow Mr Quall and the Quall applicants to pursue those issues in this native title application when they have already been determined against him and the Quall applicants in Risk. Further, Ms Brownhill submitted that it would be oppressive and unfair to allow Mr Quall and the Quall applicants to further pursue these issues; that he (and they) had been given every opportunity to present their case before Mansfield J, as the Full Court observed in Risk FC at [119] and [134]-[147]; and that this was so even though he was unrepresented during most of the hearing before Mansfield J. 66 In relation to Mr Quall's affidavit affirmed 6 May 2008, Ms Brownhill submitted that it was fundamentally deficient. She submitted that Mr Quall had not explained why he was unable to call the four witnesses listed in that affidavit at the hearing before Mansfield J. Moreover she pointed out that two of the witnesses - Mr Phillip Quall and Mr Eddy Williams - were Mr Quall's brother and cousin respectively and Ms Chong-Fong's affidavit sworn on 9 May 2008, (which is before me in this strike out application), establishes that these two witnesses sat with Mr Quall in Court during parts of the hearing before Mansfield J. Further, Ms Brownhill submitted that it was incumbent upon Mr Quall to do more than simply assert that he could not call this evidence before Mansfield J. Finally, Ms Brownhill submitted that Mr Quall had not explained in his affidavit precisely what evidence he intended to call to establish this native title application and this was particularly significant since it was not specialised evidence but evidence relating to the laws and customs of the native title claim group Mr Quall represented and, therefore, evidence that was held by them alone. 68 On the question whether this native title application can possibly succeed, Ms Brownhill referred me to the High Court's decision in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 (' General Steel ') at 130; and more recently in Batistatos v Road Traffic Authority (NSW) [2006] HCA 27 ; (2006) 226 CLR 256 (' Batistatos ') at [51]. Based on those authorities, she submitted that Mr Quall could not possibly succeed in this native title claim because the conclusions of Mansfield J in Risk on the seven matters set out above (at [55]), which are fundamental to a successful native title application, necessarily meant that he could not possibly succeed here. During the course of the various adjournments of the hearing of the application, Mr Quall changed solicitors and at the final day's hearing he was represented by Mr Loizou. Mr Loizou began by submitting that Mr Quall represented the Danggalaba clan group. He submitted that this was a core group made up of the Batcho family. He submitted that the Kulumbiringin is the tribal name incorporating the Danggalaba clan. Kulumbiringin as the tribal name is to be distinguished from the Larrakia/Risk applicants' use of the term 'Kulumbiringin'. Mr Loizou submitted that Mansfield J's findings and conclusions in Risk did not apply to Area B. Therefore, so he submitted, no issue estoppel arose from the decision in Risk . As I understood his submissions to this point, Mr Quall's counsel was describing the Danggalaba clan and/or Larrakia/Kulumbiringin case the Quall applicants put in Risk . However, after a short adjournment, Mr Loizou then submitted that the case described by Mr Quall's counsel before the Full Court at Risk FC [120]-[132] and summarised at Risk FC [161]-[163], is the case Mr Quall now wished to pursue in this native title application, ie the Top End society case. He submitted that the Full Court rejected this case saying that it had not been raised before Mansfield J. He said that Mr Quall had explained in his affidavit that the reason why this Top End society case was not properly raised before Mansfield J was his lack of resources and his inability as an unrepresented party to properly present that case. Therefore, Mr Loizou submitted, Mansfield J had not determined this Top End society case in Risk and since it had not been determined there, nothing that his Honour decided in Risk could operate as an issue estoppel to prevent him raising this case in relation to Area B. So, at the completion of his submissions, Mr Loizou put the case on two alternative bases: the Danggalaba clan and/or Larrakia/Kulumbiringin case and the Top End society case. Finally, Mr Loizou submitted that any summary dismissal of proceedings before a court should be approached with extreme caution. Even if he was, Ms Brownhill submitted, there is nothing in Mr Quall's affidavit to suggest that the situation will be any different in relation to his presentation of the Top End society case in this native title application. Finally, Ms Brownhill submitted that Mr Quall had clearly put a case before Mansfield J that at sovereignty the traditional Aboriginal society was the Larrakia/Kulumbiringin peoples, later narrowed to the Danggalaba/Larrakia clan, and he should not be permitted, in the interests of justice, to put an entirely different case in relation to Area B, ie the Top End society case identified by his counsel before the Full Court. Does the decision in Risk give rise to an issue estoppel to prevent the Quall applicants pursuing this native title application? 2. If no issue estoppel arises in relation to either or both of the cases identified above, would it constitute an abuse of process for the Quall applicants to pursue either, or both, of these cases in this native title application? 3. Does the decision in Risk mean that the Quall applicants have no reasonable prospects of success in this native title application? Again, I consider this issue has to be approached on the two alternative cases set out in 1. above. 4. If an issue estoppel arises, or the abuse of process exists, or this native title application has no reasonable prospects of success, does that warrant this native title application being struck out? 72 In considering these issues, I will deal first with the principles relating to strike out applications, or the summary dismissal of court proceedings, and then deal with the issues of issue estoppel, abuse of process and no reasonable prospects of success in that order. They apply equally to an application such as this to summarily dismiss a native title determination application under s 61 of the NT Act. The Court should only dismiss the application if the case for its dismissal is very clear: Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 128-130. Consequently, the power summarily to dismiss an application should be exercised only where the claim as expressed is untenable, and upon the version of the evidence favourable to the applicant. The Court should not, upon such an application, generally undertake any weighing of conflicting evidence or of the inferences which might be drawn from such evidence: Webster v Lampard [1993] HCA 57 ; (1993) 177 CLR 598 at 602-603. See also: Williams v Grant [2004] FCAFC 178 , at [48]-[49], per Lander J, North and Dowsett JJ agreeing. In Batistatos , in the joint decision of Gleeson CJ, Gummow, Hayne and Crennan JJ, their Honours observed that the statements in General Steel should not be given "canonical force" and they referred to Agar v Hyde (2000) 201 CLR 522 at [57], where it was observed that the various formulae used in General Steel and Dey , was intended to describe "a high degree of certainty about the ultimate outcome". 74 It follows that I must be satisfied to a high degree of certainty that because of an issue estoppel, an abuse of process, or no reasonable prospects of success, this native title application is plainly untenable. In the process, I must take "exceptional caution" to ensure that Mr Quall and the Quall applicants are not deprived of the right to submit a real and genuine controversy for determination, which has not yet been fully and finally determined on its merits. Furthermore, I should approach this strike out application on the version of any evidence that is favourable to Mr Quall and the Quall applicants. 1. Does the decision in Risk give rise to an issue estoppel for the Quall applicants? Issue estoppel is a principle that was developed from estoppel per rem judicatam in approximately the middle of the last century. It is distinguishable from estoppel by res judicata , also known as estoppel by record, or cause of action estoppel which, as the last clearly implies, applies to causes of action. Issue estoppel applies to matters of law or fact. It is based upon public policy in the finality of litigation and private justice considerations that a person should not be "twice vexed for one and the same cause": see Carl-Zeiss-Stiftung v Rayner and Keeler Ltd & Ors (No 2) (' Carl-Zeiss-Stiftung ') (1966) 2 All ER 536 at 549-550, 564-565 and Spencer Bower and Turner Res judicata 2 nd Ed, at 10-11. 76 Issue estoppel applies where: (i) the same question or issue has been decided; (ii) by a final judicial decision; (iii) between the parties to that judicial decision or their privies who are the same parties in the proceedings where the estoppel is raised: see Carl-Zeiss-Stiftung at 564, Ramsay v Pigram (1968) 181 CLR 271 at 276 per Barwick CJ and Kuligowski v Metrobus [2004] HCA 34 ; (2004) 220 CLR 363 at [21] and [40]. 77 Applying these principles to the present case, there can be no doubt, in my view, that the second prerequisite for issue estoppel has been met because the decision of Mansfield J in Risk was clearly a final judicial decision. 78 As to the third prerequisite for issue estoppel, the parties to this native title application are relevantly the same as the parties in Risk. I have used the word 'relevantly' because I do not consider the addition of the Litchfield Shire Council as a respondent to this native title application is relevant to the question whether issue estoppel applies. It would be so if the Litchfield Shire Council were attempting to make out an issue estoppel based upon the decision in Risk , but that is not the case. For the same reason, I do not consider the fact that there were other parties in the consolidated proceedings in Risk who are not parties to this native title application, prevents issue estoppel applying. In my view, the relevant consideration is whether the parties who are opposed on the issues putatively affected by issue estoppel (or their privies), are common to both sets of proceedings, not whether all the parties are identical in both sets of proceedings. Here, the same parties who agitated the issues in Risk are seeking to agitate similar issues --- I will not foreclose on the first prerequisite (above) at this stage by describing them as the same issues - in this native title application. Those parties are, of course, Mr Quall as the authorised applicant on behalf of the Quall applicants and the Northern Territory. It follows, in my view, that the third prerequisite for issue estoppel has been met. Having reached this conclusion, I do not need to consider the Northern Territory's submission that the addition of the Litchfield Shire Council as a party to this native title application is overcome by the fact that the decision of Mansfield J in Risk is a determination in rem . 79 That leaves for consideration the first prerequisite for issue estoppel (above). In considering that prerequisite, it is necessary to compare the relevant issues that were decided in Risk with the issues raised in this native title application on the alternative cases identified by Mr Quall's counsel. 80 I have set out at [41]-[42] above, the critical issues that I consider were decided in Risk . I should add that I also agree with Ms Brownhill's submission (see [58] above), that in this context, the terms 'Larrakia' and 'Kulumbiringin' both refer to the Larrakia peoples and Larrakia land. That there has been no substantial interruption in the acknowledgment and observance of the laws and customs of that society of Larrakia/Kulumbiringin peoples since sovereignty. The addition I have mentioned above is that I also consider Mr Quall is estopped from claiming in this native title application that: there was a separate, more confined, traditional Aboriginal society at sovereignty comprising the Danggalaba clan that by the traditional laws and customs of its normative system, possessed rights and interests in relation to the lands and waters in the Darwin area. 83 First, the form of this native title application is identical to the form in which it was as part of the consolidated proceedings in Risk. It is also in the same form as the other eight Kulumbiringin type native title applications that were pursued by Mr Quall in Risk. No amendments were made to this native title application while it was a part of the consolidated proceedings in Risk and no amendments have been made to it since. The critical issues raised in this native title application are, therefore, exactly the same as those raised in Risk . Those issues are recorded at [37] above. 84 The Full Court provided an apt summary of the cases Mr Quall put to Mansfield J in Risk: see Risk FC at [168]. A fair reading of the applications would not reasonably lead the audience to which they were addressed to any other conclusion. The Schedule F description of the traditional laws and customs in the illustrative application in the Second Supplementary Appeal Book makes no reference to any wider laws and customs or to any broader society. 86 Finally, in deciding whether the same issues are raised for determination in this native title application, that were raised and determined in Risk, I consider it is also significant that the lands the subject to this native title application and all the other Quall native title applications in Risk , have been described in the same, or similar, form throughout, ie variously, as the Larrakia or Kulumbiringin lands or country (see [17(b)] above - for ease of reference, I will refer to these lands henceforth in these reasons as 'Larrakia lands'). This was so throughout all the various amendments to this native title application. It was also so before and after the splitting of the various native title applications into those that applied to Areas A and B. In that respect, I do not consider that the splitting of the native title applications into two areas changed the character of the lands that were the subject of this native title application or, indeed, any of the other native title applications involved. That splitting was done to meet the convenience of the parties. It was not done to draw any distinction between the lands in Area A or B in relation to whether they were Larrakia lands. Thus, all of the lands in both Areas A and B still remained Larrakia lands in relation to which the Quall applicants asserted they held native title rights. Finally, it should be noted, that Mr Quall (or his counsel) referred to these lands as Larrakia lands or country repeatedly in Risk and Risk FC : see Risk FC at [137], [140] and [161]-[162]. For these reasons, I do not accept Mr Loizou's submission that the findings of Mansfield J in Risk can be distinguished because they only applied to Area A. 87 In my view, therefore, the issues raised in this native title application are identical to the issues that were raised and determined by Mansfield J in Risk as summarised above (at [80]-[81]). In other words, the questions I have identified at [85] above as having been raised by this native title application are answered in my summary of the findings of Mansfield J in Risk at [80] above. 88 Before leaving this issue, I should add that I do not consider that Mr Quall's change of position from the Larrakia/Kulumbiringin case back to the Danggalaba clan case during the final stages of the hearing in Risk affects this conclusion. That is so because Mansfield J ultimately found against the Quall applicants on both these cases. On the Larrakia/Kulumbiringin case, Mansfield J found that the society of the Larrakia peoples (which included the Quall applicants' Larrakia/Kulumbiringin case: see Risk at [96]), was the relevant Aboriginal society had interests in Larrakia lands. In making this finding, his Honour did not distinguish between the cases put by the Risk applicants and the Quall applicants, so both groups can claim some measure of success, even though this joint success runs contrary to one of the Quall applicants' primary claims that the Risk applicants had lost their culture and was simply a language group. However, his Honour also found that since sovereignty, there had been a substantial interruption in the acknowledgement and observance of the traditional laws and customs of the Larrakia, as explained by the High Court in Yorta Yorta , such that no native title presently existed in relation to those lands and waters. This latter finding simultaneously disposed of both the Risk applicants' and the Quall applicants' Larrakia/Kulumbiringin cases. Furthermore, Mansfield J found that the Quall applicants had failed to establish the Danggalaba clan case, by finding that there was not a separate, more confined, Aboriginal society at sovereignty, comprising of the Danggalaba clan that by its traditional laws and customs possessed rights and interests in relation to the lands and waters in the Darwin area. 89 I therefore conclude that all the prerequisites for an issue estoppel are present in relation to the first of the alternative cases identified by Mr Quall's counsel and together they dictate that the decision in Risk gave rise to an issue estoppel to prevent the Quall applicants raising for determination in this native title application, the Danggalaba clan case and/or the Larrakia/Kulumbiringin case. Having reached this conclusion, it is not necessary for me to consider the other issues that have been raised in relation to the alternative cases, ie issues 2 and 3 set out in [71] above. At the outset, I should record that despite it being outlined by Mr Quall's then counsel in submissions before the Full Court, it remains the fact that the Top End society case, as so described, is not mentioned anywhere in the various iterations of this native title application. Mr Quall's counsel's answer to a related concern I had with the issues raised in this native title application, when I raised that concern with him at one of the earlier stages of this strike out application, was to propose that I should allow the Quall applicants an opportunity to properly state the case they wished to put in this native title application and then consider whether it should be struck out. To my mind, there were some obvious problems with that proposal, not the least being delay. These proceedings have now been on foot for about 12 years; the Full Court hearing when this Top End society case was first identified by Mr Quall's then counsel, occurred some two years ago; and this strike out application had been on foot for about three months when this problem first arose. Yet, in all that time, no attempt has been made by Mr Quall, or his legal advisors, to include the Top End society case in this native title application. 91 Nonetheless, if Mr Quall were to be given this opportunity to properly describe the Top End society case in this native title application, it is not difficult to predict that it will be described in much the same terms as it was by his then counsel before the Full Court: see [92] below. If so, given that the summary of the Top End society case before the Full Court was quite detailed, there would appear to be little to be gained by yet further delay in these proceedings while Mr Quall's legal advisers include that description in this native title application. I will therefore proceed to consider that case as if it were included in that form in this native title application. [162] Taken together, it is said, this evidence unequivocally establishes the existence of a wider "society" of Top End Aboriginal tribes with traditional laws and customs regulating their interactions, their shared religious and ceremonial life, and, crucially for present purposes, their rights and interests in land. It also establishes that that society was the source of the normative system which gave rise to the right of the Larrakia people to ownership of Larrakia land. For reasons we give below, we have not considered it necessary to enter upon the evidence supporting the above assertion. 93 As can be seen from the Full Court's summary, this case is founded on the proposition that the relevant traditional Aboriginal society possessed of the rights and interests in Larrakia lands was a wider society "of Top End Aboriginal tribes", described by the Full Court as the "Top End society" case: (see Risk FC at [116]). Given the difficulties inherent in that approach, that probably explains why Mr Quall's counsel argued instead before the Full Court that the case had already been put to Mansfield J and his Honour had failed to consider it. As appears above, Mr Quall's counsel failed in that attempt. Not daunted by that failure, Mr Quall now wishes to adopt this Top End society case, as the Quall applicants' case in this native title application. 96 Mr Loizou submitted that the Top End society case was not determined by Mansfield J in Risk (see [69] above). At the superficial level, that is clearly so. However, I consider that submission states the matter at too high a level of generality. In any native title determination application under s 61 of the NT Act, such as this, the ultimate object or goal is to obtain a determination of native title in favour of the claimant group. To do that, the claimant group, in this case the Quall applicants, would have to persuade the Court that the Top End society meets the various components of the definition of native title in s 223 of the NT Act, as explained by the High Court in Yorta Yorta . Stated in this way, it can be seen that the object or goal the Quall applicants hope to achieve by pursuing the Top End society case in this native title application, is to answer the question identified in [85] above - what was the relevant Aboriginal society at sovereignty that possessed rights and interests in Larrakia lands in Area B --- with the answer: the Top End society. 97 Properly analysed in this way, what the Quall applicants are seeking to do by raising the Top End society case is to proffer a further alternative society to the three societies that were proffered, variously, by the Risk applicants and the Quall applicants in Risk (see [86] above). It follows, in my view, that while the Top End society case is self-evidently different in itself, and the components of that society were not considered or determined in Risk , the critical issue raised by that case is the same as that raised and determined in Risk . 98 I would add that, as with the first of the alternative cases identified by Mr Quall's counsel, ie the Danggalaba clan case (see [86] above), I do not consider it matters that this native title application now relates to Area B. This is so because all of the lands in both Areas A and B are clearly Larrakia lands and the relevant Aboriginal society possessing rights and interests in those lands will be the same for both. 99 For these reasons, I consider that the first prerequisite for issue estoppel is met in relation to the second of the alternative cases identified by Mr Quall's counsel, ie the Top End society case. That being so, I conclude that all of the prerequisites for an issue estoppel are present in relation to that second alternative case and together they dictate that the decision in Risk gave rise to an issue estoppel to prevent the Quall applicants pursuing the Top End society case in this native title application. However, in case I am wrong in this conclusion, particularly as to the first prerequisite for issue estoppel, I consider it is appropriate for me to consider the second issue identified above (at [71]), ie whether it would constitute an abuse of process for the Quall applicants to now pursue the Top End society case in this native title application. 2. Does pursuing the Top End society case constitute an abuse of process? The concept of abuse of process is founded on the same underlying concerns as res judicata and issue estoppel, viz the concern a person should not be troubled twice for the same cause and public policy concerns in the finality of litigation: see Spalla at [64] and [67] per French J. However, the concept is not limited by reference to those doctrines. Thus, even though the earlier proceedings did not give rise to a res judicata or an issue estoppel, eg because the parties or their privies to the two sets of proceedings were not the same, an attempt to re-litigate an issue that has already been disposed of in other proceedings, may constitute an abuse of process: see Sea Culture International Pty Ltd v Scoles [1991] FCA 523 ; (1991) 32 FCR 275 (' Sea Culture ') at 279 per French J, Walton v Gardiner (1993) 177 CLR 378 (' Walton ') at 393-394 per Mason CJ, Deane and Dawson JJ, Coffey v Secretary, Department of Social Security [1999] FCA 375 ; (1999) 86 FCR 434 at [25] per von Doussa, Branson and Sundberg JJ, Spalla at [66]-[67] per French J and Brock v Minister for Home Affairs [2008] FCAFC 165 at [74] per Lindgren and Tracey JJ. 101 The Court is empowered under O 20 r 4 to stay or dismiss a proceeding where it is considered to be an abuse of process. However, as with the summary dismissal of court proceedings in general, this power is to be exercised very sparingly and only in exceptional circumstances: see Sea Culture at 279 per French J and Djaigween v Douglas [1994] FCA 951 ; (1994) 48 FCR 535 at 545 per Carr J. The circumstances in which abuse of process may arise are "extremely varied" and are not limited to "fixed categories": see Rogers v R [1994] HCA 42 ; (1994) 181 CLR 251 at 255 per Mason CJ, Sea Culture at 279 per French J, Spalla at [63] and Batistatos at [15] and [49]. Thus, the concept of abuse of process may extend to prevent the waste of judicial resources and include, as a consideration, the necessity of maintaining confidence in, and respect for, the authority of the courts: see Spalla at [69] per French J. So, too, an attempt to litigate an issue that ought reasonably to have been litigated in earlier proceedings: see Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589 and Spalla at [59]. Finally, the concept may apply to allow proceedings to be struck out that can be clearly seen to be foredoomed to fail: see Walton at 393 per Mason CJ. 102 In State Bank of NSW v Stenhouse (1997) Australian Torts Reports 81-423 at 64,098, Giles CJ emphasised the importance of the particular circumstances that apply in determining whether it is an abuse of process to re-litigate an issue in subsequent proceedings. His Honour set out a non-exhaustive list of matters relevant to the determination whether an abuse of process was occurring. This non-exhaustive list of matters was adopted by French J in Spalla at [70]. 103 Before considering these matters, as they apply to this case, I should first restate the critical issue I consider the Quall applicants are seeking to raise in this native title application by pursuing the Top End society case. As stated above at [96], in my view, that issue is whether the Top End society was the relevant Aboriginal society at sovereignty, that possessed rights and interests in Larrakia lands in Area B. As noted above (at [96]), it follows that the Quall applicants wish to add a further alternative society to the three Aboriginal societies that were proffered in Risk . I will now turn to consider that issue by reference to the non-exhaustive list of matters set out above. In my view, an ultimate issue is one that forms the ingredients of the cause of action in a proceeding, or the "title to the right established". It encapsulates the actual ground upon which the existence of any right in the proceedings was negatived, or any point which was necessary to decide and was actually decided as a part of the ground work of the decision itself: see Blair v Curran [1939] HCA 23 ; (1930) 62 CLR 464 (' Blair v Curran ') at 532-533 per Dixon J and Kuligowski at [60]-[62]. 105 Thus, the question raised by this first matter is whether the issue the Quall applicants are seeking to raise by pursuing the Top End society case (described above), was an important issue in Risk and one that was part of the ground work upon which Mansfield J concluded that native title did not exist in area A of the Larrakia lands. In my view, that is clearly so. 106 In Risk , Mansfield J ultimately held that native title did not exist for the Larrakia lands and waters in Area A. That ultimate conclusion depended upon his Honour's application of the definition of native title in s 233 of the NT Act, as explained by the High Court in Yorta Yorta , to the facts as disclosed by the evidence before him. After undertaking that process, Mansfield J made two critical findings which I have already set out above (see [41]-[42] and summarised by [80]). Each of these findings was, in my view, a crucial part of the ground work for the ultimate conclusion made by Mansfield J that native title did not exist in Area A. Therefore, in my view, each of these findings was an ultimate issue as defined by Dixon J in Blair v Curran. Furthermore, I consider that each of these findings was of paramount importance in Risk because they were fundamental to that ultimate conclusion. The Quall applicants became the second applicants in Risk and therefore were a party to the consolidated proceedings in Risk . Indeed, one of the main purposes of s 67 of the NT Act is to require that all claims over the same area are dealt with together in the same proceedings. Nonetheless, as his Honour indicated ([34] and [798]), he gave evidence (albeit of "relatively short compass"); he tendered some documents, though these did not include an anthropological report prepared for the proceedings; he cross-examined witnesses; and he made submissions. His Honour noted (at [797]) that his evidence was, in effect, the only evidence directly supporting his claim. 108 After the decision in Risk , the Quall applicants took the opportunity to appeal that decision to the Full Court (see [44]-[48] above) and then took the opportunity to seek special leave to appeal to the High Court (see [49]-[50] above). Mr Quall and the Quall applicants have therefore taken the opportunity to pursue their case/s at every level of the federal courts system. 109 However, notwithstanding these opportunities, Mr Quall has claimed before me that his ability to present his case in Risk was hampered because he was not legally represented. As the procedural history to this native title claim (above) demonstrates, Mr Quall has complained about this situation often in the past and he has levelled criticisms at the Northern Land Council for not providing his group of applicants with the funding necessary to obtain legal representation. In his affidavit affirmed on 6 May 2008, Mr Quall repeated those complaints saying (at paragraph 4): "I was restricted in presenting evidence and legal argument due to a lack of resources. I was unable to obtain financial assistance from the Northern Land Council ...". He went on to claim that his ability to present his case in Risk was "significantly affected", that he was "not able to adequately present evidence" and that if he had been able to, he "would have presented a stronger argument". 110 Notwithstanding these complaints, I consider the record shows that Mr Quall, and the Quall applicants, were able to fully litigate the issue as to what was relevant Aboriginal society at sovereignty possessing rights and interests in Larrakia lands. The most obvious indication of this is that both the Quall applicants and the Risk applicants were jointly successful in establishing that the relevant Aboriginal society at sovereignty possessing those rights and interests was the Larrakia peoples (see [80] and [88] above). Furthermore, the aspect upon which this native title application failed in the consolidated proceedings in Risk , ie a substantial interruption in the continuous acknowledgement and observance of the laws and customs of the Larrakia peoples since sovereignty, was a joint failure with the Risk and Quall applicants (see [80] and [88] above). In this respect, I consider it is significant that the Risk applicants were legally represented and assisted by the NLC throughout, so this joint failure occurred notwithstanding that the Risk applicants were legally represented. 111 The other area of failure for the Quall applicants was the rejection by Mansfield J of their claim that the Larrakia/Kulumbiringin society did not include the Risk applicants and was limited to the Danggalaba clan (originally the Larrakia/Kulumbiringin case), comprised of the Quall applicants. In my view, this failure on the part of the Quall applicants was secondary to the joint success and joint failure described above. Moreover, it is debatable, in my view, whether the Quall applicants' failure to establish the Danggalaba clan case was due to a lack of legal representation, or due to a fundamental defect in that case. 112 As to the latter, I consider it is significant that the Danggalaba clan case put forward by Mr Quall and the Quall applicants had already failed in the Kenbi Land Claim, albeit in a different statutory regime (see [12]-[14] above). Furthermore, one of the native title applications lodged by Mr Quall and the Quall applicants, based upon the Danggalaba clan, had already been dismissed in Quall because O'Loughlin J found that Mr Quall could not adequately identify what the Danggalaba clan was (see [19]-[30] above). Finally, Mr Quall himself changed from the Danggalaba clan case to the Larrakia/Kulumbiringin case, in October 2001, and then changed back to the Danggalaba clan case, during final submissions in Risk in 2004, after four witnesses he called in support of the Larrakia/Kulumbiringin case, failed to give evidence in support of that case (see [38] above). The description of this event by Mansfield J in Risk at [797] (see [42] above) and by the Full Court in Risk FC at [176] (see [47] above), suggests that Mr Quall, and perhaps his sister, ended up being the only ones supporting the Larrakia/Kulumbiringin case, and that all the other members of the Larrakia/Kulumbiringin, including the witnesses Mr Quall had called, supported the Risk applicants about the identity of the relevant Aboriginal society at sovereignty possessing rights and interests in Larrakia land. 113 Next, I consider it is significant that despite his lack of legal representation during the course of these proceedings, Mr Quall was able to produce a detailed description of his Danggalaba clan case in this native title application, ie the May 2000 amendments (see [6]-[10] and [14]-[17] above). He was then able to produce a detailed description of his Larrakia/Kulumbiringin case in this native title application, at the time of the October 2001 amendments (see [33]-[37] above). In both these versions, Attachment S contained detailed references to the writings of historians and anthropologists. In my view, these documents demonstrate that Mr Quall and the Quall applicants were able, despite their lack of legal representation, to outline what their case was and to make considered decisions as to what form their case should take. Against this demonstrated capacity, it is significant, in my view, that the Top End society case was not ever raised before Mansfield J, as the Full Court found in Risk FC (see [46] above), and has not ever been raised in this native title application by way of amendment. 114 Finally, on this aspect, given that Mr Quall and the Quall applicants were able to outline these two alternative cases in Risk , and given that no explanation has been provided in Mr Quall's affidavit or elsewhere as to why the Top End society case was not put to Mansfield J in Risk , it is open to be inferred that Mr Quall and the Quall applicants made a deliberate decision not to pursue that case before Mansfield J. This inference may be further supported by the fact that the statements in Mr Quall's affidavit of 6 May 2008, all appear to be directed to presenting a stronger argument in relation to the Danggalaba clan or Larrakia/Kulumbiringin cases. However, I am mindful of the requirement in a strike out application such as this to approach it on the version of the evidence most favourable to Mr Quall and the Quall applicants. Nonetheless, that becomes quite difficult when I am confronted with a lack of evidence on an important question. In this respect, it is worth stating that the detailed knowledge of the components of a successful native title determination, particularly the details of the traditional laws and customs of the relevant Aboriginal society at sovereignty, all rests with the Aboriginal people concerned. In this case, the detailed knowledge about the components of the Top End society rests with the Quall applicants. These are not matters upon which anthropologists can give primary evidence. What they can do is to express opinions based upon the primary evidence of the Aboriginal people concerned. Here, Mr Quall and the Quall applicants have not produced any evidence of the details of the Top End society. They have not even produced the most basic level of evidence, eg an affidavit by Mr Quall, or another member of the Quall applicant group, stating that the matters summarised by the Full Court (see Risk FC at [161]-[162] at [92] above), about the Top End society, correctly and accurately described it. Those findings followed an exhaustive examination of a large body of evidence and they resulted in the final orders made by Mansfield J to the effect that native title does not exist for Larrakia lands in Area A (see [43] above). In my view, the findings and orders of Mansfield J are final, in the sense that they foreclose on any other Aboriginal society being able to establish that the laws and customs under its normative system gave rise to rights and interests in Larrakia lands in Area A. Indeed, they constitute a judgment in rem that no native title exists in those lands (see the cases set out in [63] above). While the decision in Risk does not have the same status in relation to the lands in Area B, I do not consider that detracts from the final effect of the findings on the ultimate issues upon which that decision is founded. Specifically, that the Larrakia peoples were the relevant Aboriginal society at sovereignty that possessed rights and interests in Larrakia lands. I consider this constitutes a final finding as to the relevant Aboriginal society that possessed rights and interests in those lands whether they fell within Area A or B. I have decided to consider whether it would be an abuse of process to pursue the Top End society case in this native title application on the basis that I may be wrong in that conclusion. However, if I am wrong about the two issues being the same, I consider that the two issues are so similar that whilst they may not support an issue estoppel, they are, in my view, clearly sufficiently similar for the purposes of abuse of process. Instead, Mr Quall has complained in his affidavit of 6 May 2008, that because he was not legally represented, he was not able to call witnesses and present his case properly. I have already dealt with some aspects of this issue in [114] above and I will not repeat those observations here. However, I have not dealt with this complaint. Specifically, Mr Quall has complained that there were four witnesses that he said he wished to call to give evidence before Mansfield J and he was not able to. However, it emerged from the affidavit of Ms Chong-Fong that two of these four witnesses sat beside Mr Quall during parts of the hearing in Risk before Mansfield J. I consider this evidence from Ms Chong-Fong required an explanation from Mr Quall as to why he did not call at least these two witnesses in Risk . As with the evidence about the details of the Top End society, this evidence is held by Mr Quall alone. No such explanation was forthcoming. Furthermore, there is no indication in Mr Quall's affidavit as to what evidence these four witnesses could give. It is therefore impossible to assess whether or not their evidence would have had any impact on the outcome in Risk and/or go to establish the Top End society case. As well, as noted above (see [114]), Mr Quall has not given any explanation in his affidavit as to why the Top End society case was not pursued in Risk . As I have also noted above (at [114]), it becomes extremely difficult, if not impossible, to approach this strike out application on the version of the evidence most favourable to Mr Quall, when he has not put the necessary evidence before me. So, even if I approach the evidence in that way, I am still left with significant gaps in the evidence that tell against Mr Quall and the Quall applicants. In reaching this view in relation to the finality of litigation principle, I take into account the fact that Mansfield J conducted a lengthy hearing in Risk, including receiving detailed submissions and evidence from numerous witnesses, including Mr Quall himself. That whole process took many years and would have cost many millions of dollars. After the decision of Justice Mansfield was delivered, Mr Quall appealed to the Full Court. It conducted a thorough review of all the materials before Mansfield J and concluded that Mr Quall had not raised the Top End society case before Mansfield J and had not established either his Larrakia/Kulumbiringin case, or the narrowed down version of the Danggalaba clan case. Mr Quall then unsuccessfully sought special leave to appeal to the High Court. Thus far, Mr Quall has therefore used every level of the federal courts system to pursue his case. At some point, there must be an end to this litigation and I consider it has now been reached. 119 In reaching this view in relation to the promotion of public confidence in the administration of justice, I take into account the just and efficient allocation of the Court's resources. In that respect, I am mindful of the fact that there are many other native title applicant groups waiting in the Court's native title list to have their native title determination applications determined. As at 30 September 2008, there were 527 native title determination applications outstanding nationally, 160 of those in the Northern Territory Registry of the Court. I fully appreciate that there are many reasons why this situation exists. However, I consider that it is in the interest of the administration of justice, so far as this Court has any control over the matter, that I ensure that the Court's resources are devoted to the resolution of real and genuine native title determination applications that have not yet been provided with a determination on their merits. Finally, I consider that it would not be in the interests of promoting public confidence in the administration of justice to create a situation where this Court could make conflicting determinations as to what the relevant Aboriginal society at sovereignty was for Larrakia lands, between the Larrakia peoples as found in Risk and the Top End society as now sought to be proffered by the Quall applicants in this native title application. From the perspective of the Quall applicants, the principle is the well established right of any person to present to this Court a real and genuine controversy that has not been determined on its merits: see Batistatos at [158]-[161] per Kirby J, noting what the joint decision said about this right not being "at large" at [65]. On the other hand, from the perspective of the Northern Territory, the principle is that a person should not be twice vexed for the same cause: see Carl-Zeiss-Stiftung at 549-550 and 564-565. I can see no reason, in principle, why the latter does not apply equally to a party that is a body politic like the Northern Territory. 121 As to the first of these principles, the Quall applicants have already put forward as a real and genuine controversy the question whether the Danggalaba clan and/or the Larrakia/Kulumbiringin was the relevant Aboriginal society at sovereignty that by the traditional laws and customs of its normative system possessed rights and interests in relation to the Larrakia lands and waters in Area A. That issue has been determined on the merits against them. They now say they wish to put forward as a real and genuine controversy the question whether the Top End society was the Aboriginal society at sovereignty that by the traditional laws and customs of its normative system possessed rights and interests in relation to the Larrakia lands and waters in Area B. The Northern Territory says that this is vexing it twice for the same cause. Moreover, I am satisfied that is so to the high degree of certainty required of me. 124 Having reached this conclusion, it is not necessary for me to consider the third issue set out in [71] above in relation to the Top End Society case. I also take into account that at various times during the long history of these proceedings Mr Quall has not been legally represented. Notwithstanding these matters, I consider that this is one of those exceptional cases where this Court should intervene to summarily dismiss this native title application. 127 I therefore propose to order that this native title application be dismissed. I certify that the preceding one hundred and twenty-seven (127) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. | application under o 20 r 4 for summary dismissal native title determination application claim area split into areas a and b earlier determination that no native title exists for area a because traditional aboriginal society that existed at sovereignty had a substantial interruption in acknowledgement and observance of traditional laws and customs issue estoppel whether earlier determination decided what the relevant aboriginal society was at sovereignty whether earlier determination decided same issue abuse of process failure to claim particular aboriginal society possessed native title rights and interests in earlier proceedings whether an abuse of process to attempt to pursue that claim in proceedings for area b whether earlier determination decided a similar issue principles applicable to an application under o 20 r 4 for summary dismissal issue estoppel abuse of process whether the current claim is a relitigation of the issue already determined in an earlier proceeding involving the same parties native title practice and procedure |
On 28 February 2007, the applicant ('Dr Windsor') filed an application and statement of claim in this Court for damages for breach of contract and for contravention of s 52 of the Trade Practices Act 1974 (Cth). In the period from 28 February 2007 to shortly before 11 September 2007, Dr Windsor represented herself in this proceeding and was assisted by her husband (Mr Neil Windsor) in conducting it. On 13 June 2007, SMS filed a notice of motion ('the 2007 notice of motion') seeking orders pursuant to O 11 r 16 of the Rules that the statement of claim be struck out, such further or other order as the Court sees fit and costs. As stated in its outline of submissions dated 28 August 2007, SMS contended that there were three fundamental deficiencies in the case pleaded by Dr Windsor: (1) that Dr Windsor did not have a cause of action against SMS in contract, (2) that the claim advanced under the Trade Practices Act was time barred; and (3) that Dr Windsor did not propose to advance part of her pleaded case. Dr Windsor opposed the 2007 notice of motion. Mr Windsor did not in the affidavit give evidence of his conversations and meetings with Mr Muldoon on or about 13 December 2000 and 8 and 9 January 2001. On 28 August 2007, I heard the 2007 notice of motion. Dr Windsor represented herself at the hearing and SMS was represented by Mr Sibtain and Ms McGarrity of counsel. Following the hearing that day, I adjourned the matter pending production by Dr Windsor of documents requested in a notice to produce dated 22 August 2007 ('the 2007 notice to produce') and further submissions from SMS in respect of any document produced by Dr Windsor in answer to the 2007 notice to produce. On 3 September 2007, Dr Windsor produced documents to the Court in answer to the 2007 notice to produce. On 18 September 2007, SMS filed further submissions in respect of documents produced by Dr Windsor in answer to the 2007 notice to produce. On 17 March 2008, I gave judgment on the 2007 notice of motion ( Windsor v Sydney Medical Services Cooperative Ltd [2008] FCA 348) ('Judgment'). I ordered that the statement of claim be struck out (Judgment at [32]). On the hearing of the current motion it was submitted on behalf of Dr Windsor that I impermissibly had regard to the evidence and that if I had confined myself to the terms of the pleading as I should have done in respect of a strike-out motion in reliance on O 11 r 16, the 2007 notice of motion would have been dismissed. The rule does not permit or allow consideration of facts or evidence outside the pleadings: Dey v Victorian Railway Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91 and 109; [1999] ALR 333 at 347-8; see also General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129; [1964] HCA 69 ; [1965] ALR 636 at 638 (' General Steel '). Indeed, as counsel for ANZ, Mr Archibald QC, correctly noted in his submissions, the court must, for purposes of deciding the strike-out motion and deciding whether a pleading discloses a reasonable cause of action, assume the truth of the allegations in the statement of claim and draw all inferences in favour of the non-moving party because the question is whether those allegations, even if proved, cannot succeed as a matter of law: General Steel CLR at 129; ALR at 638. For the reasons more fully explored at [30] below, it is not possible to regard the 2007 notice of motion as anything more than a strike-out motion. It certainly did not seek dismissal of the proceeding as an abuse of process or summary judgment in reliance on s 31A of the Act. As indicated at [35] below, if it had been necessary, I would have taken my error in this respect into account in the exercise of my discretion as to whether the justice of the matter required that the finding as to the contracting parties made on the 2007 notice of motion be reconsidered. On 1 December 2008, Dr Windsor filed an amended statement of claim pursuant to O 13 r 3(1) of the Rules. In the amended statement of claim, Dr Windsor has reformulated her claim for damages for breach of contract and has pleaded that she entered into an agreement with SMS to provide medical services on behalf of SMS on or about 8 January 2001 (para 5). SMS relied on an affidavit of Timothy Unsworth sworn 5 May 2009 and exhibits thereto (Ex. 1) in support of the orders sought in the current motion and Dr Windsor relied on two affidavits sworn by her on 21 May 2009 (Ex. A); two affidavits sworn by Neil Stern Windsor on 21 May 2009 (Ex. B); those parts of an affidavit sworn by Neil Stern Windsor on 18 July 2007 and exhibits which were not ruled inadmissible on the hearing of the 2007 notice of motion (Ex. C); and various exhibits to Exs. A and B (Exs. D --- K inclusive). (2) Whether the proceeding should be dismissed under O 20 r 5 of the Rules as an abuse of process by reason that the Judgment in respect of the finding as to the contracting parties created an issue estoppel, was not interlocutory, or decided this issue on a final basis and by reason thereof the proceeding is unjustifiably vexatious and oppressive? (3) Whether summary judgment should be given under s 31A(2) of the Act? (4) Whether the amended statement of claim should be struck out under O 11 r 16 of the Rules on the basis that it does not disclose a reasonable cause of action or is otherwise an abuse of process? I have come to the view, without any real doubt, that this issue must be answered in Dr Windsor's favour. The pleadings, therefore, were not closed (O 11 r 15 of the Rules). Order 13 r 3(1) of the Rules permits a party to amend a pleading, without leave of the Court, once before the pleadings have closed. Dr Windsor filed the amended statement of claim on 1 December 2008 in reliance on O 13 r 3(1) of the Rules. Order 13 r 3(3) of the Rules requires the Court to consider the effect of the amendments made by the new pleading by reference to the prior pleading. In this case, the amended statement of claim does not 'add a new claim for relief or foundation in law for a new claim for relief' within O 13 r 3(3)(a) of the Rules as Dr Windsor has only reformulated the claim for damages for breach of contract made in the statement of claim. It follows that O 13 r 3(4) had no application to the filing of the amended statement of claim. (b) Whether the proceeding should be dismissed under O 20 r 5 of the Rules as an abuse of process by reason that the Judgment in respect of the finding as to the contracting parties created an issue estoppel, was not interlocutory, or decided this issue on a final basis and by reason thereof is unjustifiably vexatious and oppressive? Burchett's J analysis in Weatherall was cited with approval by Cowdroy J in Md Abdullah Al Mamun v Minister for Immigration and Citizenship [2007] FCA 541. An order striking out pleadings does not finally determine the rights of the parties. The proceeding remains extant (see Australian Competition and Consumer Commission v Fox Symes & Associates Pty Limited [2005] FCA 1071) and a party is ordinarily given an opportunity to re-plead in accordance with the Rules ( Australian Competition and Consumer Commission at [95]). It follows, therefore, that they are insufficient to create an issue estoppel (see Wilson v Union Insurance Co [1992] NTSC 107 ; (1992) 112 FLR 166 ; cited with approval in Bowes v Fehlberg & Ors (No 2) [2001] TASSC 24 at [22] and by the New South Wales Court of Appeal in Miller v Deputy Commissioner of Taxation (1997) 38 ATR 51. Nevertheless, the power to stay or dismiss must be 'very sparingly exercised and only in exceptional cases' (see Sea Culture International Pty Limited v Scoles at 279) and 'upon an examination of the relevant circumstances of the particular case before the Court' (see Spalla v St George Motor Finance Limited (No 6) [2004] FCA 1699 at [70] per French J). An example of an abuse of process is where interlocutory orders, though not truly able to found an issue estoppel, may be capable of finally determining an issue of fact or law if 'it is reasonable to regard the earlier decision as a final determination of the issue' ( Re Martin & Anor; Ex parte Amtron Australia Pty Limited (1996) 62 FCR 438 per Cooper J at 443) or the parties have conducted the litigation 'upon the footing that this part of the proceedings is to be then determined, to that extent, finally' ( Leppington Pastoral Co Pty Limited v Commonwealth of Australia (1997) 76 FCR 318 per Beaumont J (with whom Jenkinson and Lehane JJ agreed)) or 'a reasonable construction of the interlocutory judgment shows that a point has been the subject of a final determination' ( Northern Star Agriculture Pty Ltd v Morgan and Banks Developments Pty Ltd [2007] NSWSC 98 per Young CJ in Eq at [42]). The 2007 notice of motion complied with that rule in respect of the order sought in para 1 seeking to strike out the statement of claim, pursuant to O 11 r 16 of the Rules. The order in para 2, 'such further or other order as the Court sees fit', does not comply with that Rule and it is impossible to discern from para 2 that the 2007 notice of motion would encompass an application for summary judgment under s 31A of the Act or an order dismissing the proceedings under O 20 r 5 of the Rules. (2) Second, SMS conducted the 2007 notice of motion on the basis that the issues of concern were matters of pleading. That's essentially the motion. We don't necessarily suggest that there is no claim that could ever be seriously advanced, but the way in which the case is presently framed, it cannot proceed. It seeks orders pursuant to order 11 rule 16 striking out the statement [of] claim. HIS HONOUR: Yes. MR SIBTAIN: And those orders would include, and your Honour would treat it as such, an order dismissing any cause of action which is contrived to be hopeless and it could be viewed in that way. Namely, that if it is clearly foredoomed to fail then it would be struck out. The suggestion made on 28 August 2007 by Mr Sibtain that 'those orders would include ... an order dismissing any cause of action which is contrived to be hopeless' did not clearly articulate an application for summary judgment or summary dismissal as these words were followed by the words 'then it would be struck out' which are only used in the Rules with respect to a defective pleading. I will reserve on the strike-out motion and I will deliver my decision on that as soon as I am able to do. That will give you an opportunity to advise your client on what might be done, being a strike-out motion, my judgment in relation to the matter will be interlocutory and you can take whatever action you want, based upon your consideration of the relevant evidence and instructions that you receive. Dr Windsor deposed that her state of mind in connection with SMS bringing the 2007 notice of motion was that, if successful, the statement of claim as formulated could not proceed (Ex. A (8 page affidavit), para 40). Mr Windsor's state of mind was that SMS in the 2007 notice of motion was not seeking anything other than to strike out the statement of claim and if that happened Dr Windsor could file a differently formulated amended statement of claim (Ex. B (8 page affidavit), para 37). (5) Fifth, the formal order pronounced on 17 March 2008 was to strike out the statement of claim. It was nevertheless submitted on behalf of SMS that the amended statement of claim was a transparent attempt to re-litigate issues which have already been determined against Dr Windsor: '...proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances of the case do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings' ( Walton v Gardiner (1993) 177 CLR 378 per Mason CJ, Deane and Dawson JJ at 393). Reference was also made to Nominal Defendant v Manning [2000] NSWCA 80 ; (2000) 50 NSWLR 139 per Heydon JA at 155 --- 157 [70] --- [73] and per Foster A-JA at 167 [122] --- [123] and P. Dawson Nominees v ASIC (No. 2) (2009) 255 ALR 466 at [36] --- [49]. In response, it was submitted on behalf of Dr Windsor that the principle articulated in Manning , to which I would merely observe, assuming a principle can be identified other than a preference for the view of Charles JA rather than the majority in D A Christie Pty Ltd v Baker (1996) 2 VR 582 , concerned, as did Dawson and Christie , the bringing of a second interlocutory application by an applicant or plaintiff; here, it was pointed out, on both occasions, Dr Windsor was resisting such an application and so, at best, any principle, if it can apply at all, could only be by way of analogy. Next it was said that in Dawson , Goldberg J articulated the principle in terms of a threshold issue (at [49]), in respect of which the applicants carried the onus. Here there was no threshold issue because there was no onus on Dr Windsor. For that reason, any principle coming out of Manning and Dawson is not apt. Third, it was submitted that if, contrary to the foregoing submissions, I was to find that any principle coming out of Manning can apply by way of analogy to the present case, there were four reasons why it was fair and just to reconsider the matter rather than be persuaded that SMS had established the amended statement of claim was an abuse of process. (2) I applied impermissible criteria in deciding the 2007 notice of motion --- clearly a strike-out application --- rather than confining myself to the pleadings; had I done the latter, I would have dismissed the 2007 notice of motion. I have already accepted this submission at [12] and [13] above. (3) On the hearing of the 2007 notice of motion, the Court's attention was not drawn to the undecided question of law about whether post-contractual conduct and communications could be used to identify parties to the contract (see Dennis Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 ; (2007) Aust Contract R §90-263 at [59] per Campbell JA (Beazley JA agreeing); Sagacious Procurements Pty Ltd v Symbion Health Ltd (formerly Mayne Group Ltd) [2008] NSWCA 149 at [99] ff per Giles JA (Hodgson and Campbell JJA agreeing); County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [161] per McColl JA), and at least some of the Judgment Documents fall within that category. (4) The fact that on the hearing of the 2007 notice of motion my attention was not drawn to admissions that were relied upon on the hearing of the current motion and, even if I did have regard to them on the earlier occasion, there is no indication on the face of the reasons for judgment that I interacted with them. I agree with the submissions made on behalf of Dr Windsor. In my view, there is no basis for this proceeding to be dismissed under O 20 r 5 as a abuse of process. While I do not think there is any doubt about this conclusion, if there were, then, in my view, at least the first two matters referred to in [34] above would dictate that as a matter of discretion, the justice of the matter required that Dr Windsor be allowed to revisit the finding as to the contracting parties made on the 2007 notice of motion. The more difficult issue, in my view, is whether SMS should be given summary judgment under s 31A(2) of the Act on the basis that Dr Windsor has no reasonable prospect of successfully prosecuting the proceeding. It is to that issue that I now turn. (c) Whether summary judgment should be given under s 31A(2) of the Act? A Full Court of this Court considered the application of s 31A in Jefferson Ford Pty Limited v Ford Motor Company of Australia Limited [2008] FCAFC 60 ; (2008) 167 FCR 372 (Finkelstein, Rares and Gordon JJ). Finkelstein J stated that s 31A of the Act is to be given a 'substantial operation' which requires the 'judge to conduct what might loosely be described as a preliminary trial' and to look closely to a party's 'assertion that there is a real question of law or fact to be decided' (at [23]). About factual issues Finkelstein J (at [20]) stated that the task of prediction was fraught with all kinds of difficulties including the Court, in many cases, not having before it all the material evidence, and if credit is involved the impossibility of predicting how that issue would be resolved. Even if the dispute is only a question of law, that issue may be difficult to resolve; or to predict its resolution, in the absence of detailed argument such as only occurs at a trial. Then Finkelstein J stated (at [23]) that the task of the judge is 'to decide whether the opposing party has evidence of sufficient quality and weight to be able to succeed at trial' and on questions of law the task of the judge is to determine whether the question of law is 'sufficiently strong to warrant a trial' (at [23]). Rares J favoured the test he stated in Boston Commercial and noted that that the correctness of that test did not need to be examined because 'neither party challenged that test' (at [73]). Gordon J identified a number of principles which 'inform' the application of s 31A of the Act. Among these are: (1) that s 31A is less stringent than the General Steel Industries standard; (2) that each case must be determined separately; (3) where there is a real issue of fact it is unlikely that that part of the proceeding has no prospect of success; (4) in determining whether a real issue of fact exists the Court must draw all available reasonable inferences in favour of the non-moving party (at [124] --- [132]). (2) Paragraph 4 of the statement of claim pleaded an agreement entered into on 8 January 2001. By way of particulars, the statement of claim referred both to conversations between Mr Windsor and a representative of SMS and to documents, including a letter from InterNEOn to SMS signed by Mr Windsor and dated 9 January 2001. (3) Paragraph 5 of the amended statement of claim pleads, in terms relevantly indistinguishable from para 4 of the statement of claim, a contract referred to as the 'initial agreement', entered into on 8 January 2001. The particulars to para 5 of the amended statement of claim differ from the statement of claim in that the letter of 9 January 2001 is not mentioned. In SMS's submission, Dr Windsor cannot alter or avoid the effect of the letter of 9 January 2001 by ignoring it. The amended statement of claim then alleges in para 8 a 'variation agreement' alleged to have been entered into on 10 January 2001. There is no allegation that the 'variation agreement' involved any change to the contracting parties. (4) In SMS's submission there is nothing in the amended statement of claim which could affect the inevitable conclusion on the evidence, as determined in the Judgment, that the agreement pursuant to which Dr Windsor performed services as a locum doctor was entered into between InterNEOn and SMS. (5) The letter of 9 January 2001 was unambiguously to that effect. The tax returns and payment records tendered on the 2007 notice of motion (Ex. 1) clearly demonstrate that the contracting parties were InterNEOn and SMS. (6) The amended statement of claim seeks to avoid this difficulty by ignoring it. (7) The amended statement of claim pleads no fresh or significant fact or circumstance to counter the conclusion reached in the Judgment. (8) Dr Windsor has filed voluminous affidavits in answer to the current motion. However, SMS submitted that, even if the evidence filed is admitted in full and accepted as fully reliable, Dr Windsor cannot overcome the fundamental flaw in her case, that is, that there is unequivocal and irrefutable evidence that InterNEOn and not Dr Windsor was the party contracting with SMS for the provision of Dr Windsor's services. (9) SMS pointed to what I said at [21] of the Judgment 'the letter [of 9 January 2001] would, in the absence of any other evidence, be sufficient to found that conclusion. (11) The position is in fact strengthened by Ex. In SMS's submission it has 'discharged the onus to enliven the discretion to authorise a summary termination of the proceedings which s 31A envisages', per Rares J in Boston Commercial at [45]. Even accepting Mr Neil Windsor and Dr Windsor's version of the discussions on 8 and 10 January 2001 (paras 19, 21 and 23 of Ex. B (the 74 page affidavit) and paras 21, 23 and 24 of Ex. A (the 54 page affidavit)) as completely accurate, there is no reasonable interpretation of the communications between Mr Neil Windsor and SMS which is consistent with any conclusion other than that any contract for the provision of locum services by Dr Windsor was entered into between InterNEOn and SMS. Dr Windsor pointed to the evidence at para 19 of the 74 page affidavit that is part of Ex. I prepare a tax invoice for the locums. I need an ABN Number, you know, to take care of this GST crap. It's up to the locums to take care of their tax anyway they want. What are you going to do about payment? I'm not going to deduct 50% of the pay like the tax department want us to do. Further, that there is evidence in support of the case pleaded in the amended statement of claim that the agreement was entered into by Dr Windsor, through the agency of her husband, Mr Neil Windsor, and Mr Muldoon of SMS on 8 January 2001; and there is no evidence by SMS as to the negotiations on 8 January 2001. It was submitted that the Court should find that SMS has not satisfied the onus of demonstrating that Dr Windsor has no reasonable prospects of prosecuting the proceedings within s 31A(2) of the Act. A affidavit of 54 pages, Ex. E and Ex. F; Ex. B affidavit of 74 pages, Ex. D, Tab 23 and Ex. A affidavit of 54 pages, Ex. SMS has no part in this relationship, we do not employ him, we have a contract with you. Whether or not you are then passing your income through a 'family company' for tax purposes is personal to you and does not involve us. (Ex. A affidavit of 54 pages, Ex. (Ex. A affidavit of 54 pages, Ex. E, Tab 63). It was submitted on behalf of Dr Windsor that there is no evidence from which an inference can be drawn unequivocally that in respect of the breaches of contract alleged in the amended statement of claim, Dr Windsor agreed to a variation of the agreement in respect of the matters which she alleges constitute a breach of the agreement. This was specifically raised verbally by Mr Windsor with Mr Northbridge, the CEO of SMS, and in correspondence in September 2006 (Ex. B affidavit 74 pages, para 58, Ex. In conclusion, it was submitted on behalf of Dr Windsor that, whether the Court applies the standard adopted by Rares J in Boston Commercial , the principles identified by Gordon J in Jefferson Ford or, the tasks of the judge in considering an application under s 31A of the Act identified by Finkelstein J in Jefferson Ford , the Court should find that SMS has not satisfied the onus of demonstrating that Dr Windsor has no reasonable prospects of prosecuting the proceedings within s 31A(2) of the Act. I can see significant obstacles in the way of Dr Windsor establishing, as a fact, that it was she, and not InterNEOn, that was the contracting party with SMS. Most, if not all, of these obstacles were referred to at [14] and [21] of the Judgment. Of course, whether or not this is an issue at trial will ultimately depend upon the defence filed by SMS. However, it is impossible to believe, having regard to what has already transpired, that it will not be put in issue. On the basis of the evidence that has been put on in support of and against the current motion, I am not satisfied that the InterNEOn letter of 9 January 2001 was not an integral part of the contract formation rather than being post-contractual conduct or a post-contractual communication as submitted on behalf of Dr Windsor. Nevertheless, there is a real issue of fact to be decided and, if it is decided that the letter is post-contractual, a real issue of law arises. They are not matters which should be decided on a summary judgment application; they should go to a substantive hearing so that the evidence for and on behalf of all relevant parties can be ventilated and tested. I am also conscious that if Dr Windsor is ultimately successful in establishing that the relevant contract was between herself and SMS and not InterNEOn and SMS then this will give rise to significant adverse income tax consequences for her having regard to the way in which income was returned by herself and InterNEOn for the relevant years of income. The response on her behalf was that that was something that may have to be faced in the fullness of time. In conclusion then, for the reasons alluded to, particularly at [52] above, and despite the obstacles I presently see in Dr Windsor's path, SMS has not satisfied me that Dr Windsor has no reasonable prospects of prosecuting the proceeding within s 31A(2) of the Act. (d) Whether the amended statement of claim should be struck out under Order 11 rule 16 on the basis that it does not disclose a reasonable cause of action or is otherwise an abuse of process? In Imobilari , Finkelstein J (at [4] --- [6]) observed that s 31A of the Act is concerned with the ability to make a claim, and a court must look at the evidence to see whether a cause of action is disclosed, whereas O 11 r 16 of the Rules, on the other hand, is concerned with the adequacy of pleadings as a matter of law and not with facts or evidence outside the pleadings. The amended statement of claim discloses a reasonable cause of action for breach of contract by Dr Windsor against SMS. There are no grounds upon which the pleaded amended statement of claim constitutes an abuse of process. In these circumstances, it was submitted that the Court should find that SMS has not satisfied the onus of demonstrating that the amended statement of claim discloses no reasonable cause of action or is otherwise an abuse of process within O 11 r 16 of the Rules and, accordingly, refuse to strike out the amended statement of claim. I agree with these submissions. The Judgment in respect of the finding as to the contracting parties was interlocutory and neither created an issue estoppel, nor decided this issue on a final basis. There is, therefore, no basis for these proceedings to be dismissed under O 20 r 5 as an abuse of process. Further, SMS has not satisfied the onus of demonstrating that Dr Windsor has no reasonable prospects of prosecuting the proceedings within s 31A(2) of the Act or demonstrated that the amended statement of claim fails to disclose a reasonable cause of action or is otherwise an abuse of process within O 11 r 16 of the Rules. The current motion should, therefore, be dismissed with costs. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | various applications in consequence of the filing of an amended statement of claim after strike-out of original statement of claim whether proceeding should be dismissed under o 20 r 5 of the federal court rules as an abuse of process an order striking out a statement of claim is interlocutory interlocutory orders do not found an 'issue estoppel' attempts to re-litigate issues that have been finally determined may be considered an abuse of process the filing of the amended statement of claim cannot be considered an abuse of process application for summary judgment pursuant to s 31a of the federal court of australia act 1976 (cth) onus rests on party seeking summary judgment where there is a real issue of fact or law to be decided it is appropriate the matter proceed to trial whether statement of claim should be struck out under o 11 r 16 of the rules a strike-out motion is concerned with the adequacy of pleadings as a matter of law not with facts or evidence outside the pleading amended statement of claim disclosed a reasonable cause of action for breach of contract. practice & procedure |
The reason for this is that in opening his oral submissions counsel for the appellant commenced to raise issues which went far beyond the very prosaic grounds in the Notice of Appeal and the appellant's written submissions. In short, counsel sought to raise issues fundamental to the scope and limits of the jurisdiction of the Federal Magistrates Court or of a Federal Magistrate to award costs under s 79 of the Federal Magistrates Act 1999 (Cth). Needless to say none of these matters had been raised before the Federal Magistrate; they appeared to turn on, to say the least, arresting constructions of the FM Act and the Federal Magistrates Court Rules ; and they formed no part of the appeal that either counsel for the respondent or I understood was to be prosecuted. 2 Under s 25(1A) of the Federal Court of Australia Act 1976 (Cth), the appellate jurisdiction of this Court in relation to an appeal from a non-migration decision of the Federal Magistrates Court is to be exercised by a Full Court unless the Chief Justice considers that it is appropriate for that jurisdiction to be exercised by a single judge. Both the appellant and the respondent informed me in directions hearings prior to the appeal that the matter was an appropriate one to be heard by a single judge. Such was my own appreciation of the appeal. I recommended accordingly to the Chief Justice who later determined that the appeal be heard by a single judge. In consequence I indicated to counsel that the appeal would proceed on the grounds in the Notice of Appeal. Though counsel for the appellant strayed on occasion from the grounds of appeal, I made plain then that I would not determine issues that were not properly before me. 4 (i) The appellant, Ginos Engineers Pty Ltd, an Adelaide based company, had made unauthorised use of Autodesk Inc's software, so infringing its copyright. Autodesk Inc is a member of an international family of companies of which the respondent, Autodesk Australia Pty Ltd, is the local representative. Autodesk Inc and its solicitors entered into correspondence and negotiations with Ginos in relation to its acts of infringement. These did not proceed to a satisfactory conclusion and Autodesk Inc's solicitors wrote to Ginos' lawyers asking them to confirm they would accept service on behalf of Ginos. 5 (ii) Ginos' lawyers did not respond to that letter but rather instituted the present proceedings in Adelaide. I will refer to this as the Adelaide proceedings. The apparent object of the proceedings was to bring matters to a head. It sought a declaration allegedly under the Copyright Act 1968 (Cth) as to the liability of Ginos in respect of its own infringement of Autodesk Australia's software. 6 (iii) Quite apart from any question as to whether a proceeding against Autodesk Australia alone as the alleged exclusive licensee could be said to be properly constituted: see Copyright Act s 120 ; the claim itself was --- and should have been seen by Ginos' lawyers to have been --- wholly misconceived. The Copyright Act gave no such cause of action as alleged. And the relief sought was not itself an appropriate subject of declaratory relief. 7 (iv) Some time after the Adelaide proceedings were instituted proceedings were brought in New South Wales by Autodesk Australia, Autodesk Inc and Autodesk Asia Pte Ltd (for the need for these three parties, see Copyright Act , s 120) against Ginos and its director alleging breaches of copyright for which appropriate relief was sought. 8 (v) On 17 August 2007 the solicitors for Autodesk Australia in the Adelaide proceedings wrote to the applicant's solicitors indicating that the proceedings not only was brought without notice, but also was "improperly constituted and hopelessly flawed". It alleged that the proceedings disclosed no cause of action under the Copyright Act and had been filed against the wrong respondent as Autodesk Inc was the copyright owner and Autodesk Asia was the exclusive licensee of that copyright in Australia. In the circumstances, our client intends to file an application to dismiss your client's claim and to seek payment of its costs. Autodesk Australia was later to concede that it had discovered that, for a period, it had been an exclusive licensee of Autodesk Inc and for that reason would be a proper party to infringement proceedings. 9 (vi) On 27 August 2007 Autodesk Australia filed a response in the Adelaide proceedings in which it sought orders under r 13.10 of the FMC Rules that the proceedings be stayed or dismissed as disclosing no reasonable cause of action and as being an abuse of process. Costs were sought. On 14 September 2007 orders were made setting down the dismissal application for hearing on 19 October 2007. 10 (vii) On 17 October 2007, Ginos responded to the respondent's solicitor's letter of 17 August. It disputed both whether the Adelaide proceedings failed to disclose a cause of action and whether it was improperly constituted. 11 (viii) At the hearing on 19 October 2007, Ginos' counsel was asked what his client intended to do with the Adelaide proceedings. He responded that: "my client's offer is that they be dismissed without costs". Shortly thereafter he indicated that the only argument was "a costs argument". These exchanges occurred after more than two hours of argument in relation to the summary judgment application. Unsurprisingly, Ginos' arresting costs proposal was opposed by the respondent. Further legal argument ensued for some time. It was devoted in part to a request for confidentiality by Autodesk Australia of an affidavit relating to its costs. I will return to this below. 12 (ix) Orders were then made dismissing Ginos' claim and adjourning the matter for further argument until a later date. 13 (x) The costs affidavit to which I referred above was sworn by Michael Williams, an intellectual property partner in Autodesk Australia's solicitor's firm. A confidentiality order was sought for an exhibit to it which contained a copy of invoices from the solicitors detailing all the legal work that had been carried out by the firm and its charges for that work. While Autodesk Australia indicated on 19 October 2007 that it was prepared to have it shown to Ginos' counsel, it did not want it to be shown to anyone else. Counsel refused to accept the exhibit on that basis. At the 4 December 2007 costs hearing after some argument, counsel for Autodesk Australia indicated his client would not oppose counsel for Ginos showing his client the exhibit and discussing it provided the client gave a confidentiality undertaking in relation to it. A further adjournment was reluctantly given until 6 December 2007 essentially for procedural fairness reasons, to enable counsel to discuss the exhibit with Ginos. 14 (xi) On 6 December 2007 his Honour rejected Ginos' application for costs and had "no hesitation": Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd [2007] FMCA 2156 at [30] ; in acceding to Autodesk Australia's request for costs. In the event he awarded costs in a lump sum in the figure of $22,500. The appeal is against that order. There is no appeal against the Federal Magistrate's order rejecting Ginos' application for costs. ... (4) To assist the Court, the parties must: • avoid undue delay, expense and technicality • consider options for primary dispute resolution as early as possible. In quoting the above, his Honour highlighted the word "economical" in r 1.03(1). For reasons I give below, I quite understand why he did. MR SCRAGG: Yes, I know, your Honour. The simple way is the usual order, that costs be taxed. That's a simple way --- be agreed or taxed. HIS HONOUR: Mr Scragg, you've addressed me on that and I've also heard from Mr Hennessy about that. Given the way that this matter has progressed since it was commenced, the amount of time that has been spent at every step, I'm not disposed at the moment to make an order that the costs be taxed. Because I can see that it's simply going to result in one or other of the parties --- or perhaps more accurately both --- incurring considerable extra expense in sorting out the question of costs. I will return to this matter. 17 The Federal Magistrate then indicated in his reasons that he was assisted in determining the appropriate costs order by the affidavit of Mr Williams whom, he noted, had given similar evidence which was accepted in "other similar intellectual property cases". Mr Williams had been involved in numerous copyright infringement cases in this Court and in the Federal Magistrates Court. It is unnecessary for me to comment on the degree of similarity between the case before his Honour and those to which he referred. The case before him clearly was an appropriate one for a lump sum order irrespective of whether it could be said to be a complex one. The discretion given in r 21.02(2)(a) is not circumscribed. I would emphasise that no ground of appeal challenged directly the decision to make a lump sum order as such although ground 7 (which must fail as I will indicate) might be said to do so obliquely. Mr Williams' evidence was that in his experience costs are assessed for between 50 per cent and 70 per cent of the professional costs and disbursements expended on a matter. He was familiar with the work undertaken on the file and the accounts rendered in respect of this work; he provided an estimate of the costs that in his view were likely to be recoverable by the respondent in an assessment process, having regard to his experience of costs awards made in complex cases in the Federal Magistrates Court; he listed the items of work that had been undertaken; and, in the exhibit to his affidavit, he provided an itemised invoice of professional costs. He concluded that the total professional costs and disbursements that had been incurred or made (whether or not billed) totalled $24,558. He applied a 60 per cent recovery figure to that sum to produce a "taxed amount" of approximately $14,734.80. When account was taken of professional costs incurred after the date of Mr Williams' affidavit the total of professional costs became $45,136.39. A reduction of $380 was made to this figure (it represented work in the New South Wales proceeding) as were other minor reductions so reducing the total to $44,693.64. 18 His Honour went on to indicate that he had "studied the schedules". It is not clear whether this is a reference to the confidential exhibit (cf [44] of the reasons) or, perhaps more probably, to the schedule of costs referred to in r 21.10 of the FMC Rules (which schedule specifies lump sum orders for designated events but from which a federal magistrate could depart: r 21.10). In light of that he indicated he "would feel more comfortable with a reduction of 50% rather than the 60% that Mr Williams mentioned". He reduced the amount (rounded off) to $22,500 and ordered accordingly. That a proper charge for the work in question, if taxed in accordance with the scale or otherwise, would have been approximately $5000 to $8000. Contrary to the view of the Magistrate, it would not have imposed significant additional costs upon the parties to tax the respondent's costs on an item by item basis. Ground 6 simply makes an assertion as to what the award might have been if they had been taxed. Whatever Ground 7's purpose was meant to be, it must fail for reasons I will later give. I refused to allow it. I should also indicate that at the hearing before the Federal Magistrate, Mr Williams was available for cross-examination. Counsel refrained from availing of this. Nonetheless, he proceeded to contend before his Honour that the invoice annexed to Mr Williams' affidavit disclosed unnecessary services being rendered, excessive charges being made and charges made for matters on which the respondent was unsuccessful. Additionally, he contended before me, surprisingly, that his submissions to the Federal Magistrate by way of criticism of Mr Williams' evidence were evidence before his Honour notwithstanding that no ruling or agreement to that effect was made. While his Honour invited counsel to put on evidence on the issue of costs and in relation to Mr Williams' evidence, again he refrained from so doing. 23 It is inconsistent both with the terms of r 21.02(2)(a) and to the clear objective in making a lump sum order that the costs in issue be subjected to the detailed scrutiny often applied in taxations: Leary v Leary [1987] 1 All ER 261 at 265; Dal Pont at [15.17] and [15.19]. In specifying a lump sum, it is well accepted that it is appropriate to apply a "much broader brush" than would be applied on a taxation: see Sony Entertainment (Australia) Ltd v Smith [2005] FCA 228 ; (2005) 215 ALR 788 at [196] - [200] . Nonetheless, the discretion to make a lump sum order, no less than the general discretion to order costs, must be exercised judicially and in accordance with principle. In particular in making a lump sum estimate the approach of the court should be "logical, fair and reasonable": Beach Petroleum NL at 123; Nine Films & Television Pty Ltd at [8]. 24 It is not uncommon, particularly, but not only, in intellectual property cases, for the court to take as its starting point the evidence of the charges for professional costs incurred and disbursements made by the lawyers of the party awarded costs --- and this irrespective of whether the costs are to be estimated on an indemnity basis: cf Beach Petroleum NL at 120; or on a party and party basis: cf Universal Music Australia Pty Ltd v Miyamoto [2003] FCA 812 at [29] ff. That figure is then characteristically adjusted to take account of the acceptability of the charges made, the conduct of the proceeding, the measure of success on issues etc, to produce a sum which as a matter of judgment is neither overcompensatory nor prejudicial to the successful party. Consistent with the broad brush approach, that adjustment ordinarily is effected through the application of a discount to the figure accepted by the court on the available evidence as appropriately reflecting actual professional costs charged and disbursements made. The case law evidences wide variations in the percentages of discount sought and/or applied to reflect the exigencies of the matter in question: cf Sony Entertainment (Australia) , 60%; Beach Petroleum NL , 39%, Nine Films & Television , 23%. What is clear is that a lump sum award may be in an amount that is greater or smaller than would have been the taxed costs payable: see Dal Pont at [15.20]. If he had engaged in a proper taxation in accordance with r 21.11 of the FMC Rules, it is contended, his Honour would have arrived at a far smaller sum for costs, hence the reference in ground 6 of the grounds of the appeal that a proper charge for work done, whether taxed or otherwise, would have been approximately $5,000 to $8,000. In essence, and considered in light of the oral submissions of the appellant's counsel, the complaint appears to be that the sum ordered was not just. The various grounds of appeal are, in a sense, illustrative of the central proposition. 26 The respondent's case, put shortly, is that the appeal is against an exercise of a "judicial discretion": cf House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 504; but neither the grounds of appeal nor the appellant's submissions disclose an appellable error in the circumstances. 27 Before dealing with the appellant's grounds, four general and/or contextual matters should be mentioned. First, it is clear from his Honour's reasons and from the transcript of the costs hearings on 4 and 6 December 2007 that the Federal Magistrate made plain to the parties that he was disposed to make a lump sum award to bring to an end what already had been a protracted litigation. As I earlier indicated, the appellant has not challenged his Honour's decision to make such an award, although it has been impugned obliquely by the repeated assertions that taxation should have been ordered and, if it had, a much lesser sum would have been payable by way of costs. 28 Secondly, I have referred above to the common practice of the use of evidence of the actual costs and disbursements charged to a successful party as providing the starting point for an estimation of an appropriate lump sum award. As again is clear from his Honour's reasons (at [36]), he was both aware of this practice (and, for that matter, of Mr Williams' prior involvement in giving such evidence in intellectual property cases) and how it might assist in arriving at an appropriate estimate of costs. It is, in my view, quite erroneous to assert that the Federal Magistrate engaged, or considered he was engaging, in a form of taxation, notwithstanding that Mr Williams gave evidence of what he expected would be the taxed amount payable on the sum billed. His Honour rightly chaffed at being asked to engage in a defacto taxation. This matter seems to be proceeding pretty much like a taxation at this stage. It seems to me that what we're trying to do is avoid a taxation, so that you have to justify every particular item. In fact doesn't Mr Williams say that the discount really takes into account all of these arguments that might be presented about this taking too long or that not being completely on point or an issue has been won here or an issue lost there. Is that the case, or am I misunderstanding Mr Williams' evidence? MR HENNESSEY: With respect, both Mr Williams' evidence and what has just fallen from your Honour are precisely right. 29 Thirdly, both before his Honour, and again before me, counsel for the appellant engaged in a detailed dissection of the invoices exhibited to Mr Williams' affidavit descending into matters such as alleged excessive charging and services, account not being taken of "victories", the scales of costs for disbursements and lawyer's fees of various jurisdictions, the incidence of GST, etc. While it, doubtless, was open to him to comment upon the invoice and upon Mr Williams' evidence, he neither cross-examined Mr Williams nor put on evidence (expert or otherwise) on costs. Much in his submissions was in consequence devoid of any evidentiary foundation. It clearly was open to his Honour to accept Mr Williams' evidence as he did: see reasons [37]. I earlier indicated there is no ground of appeal challenging Mr Williams' evidence or the Federal Magistrate's reliance upon it. It is difficult to resist the conclusion either that counsel did not understand the function performed by the 50% discount in his Honour's estimation of the appropriate sum, or that he simply disputes the percentage chosen. The latter of these, though, is not reflected in any ground of appeal. 30 Fourthly, it again is clear from the transcript that the issues relating to the assessment agitated before me were raised before his Honour. It also is clear that considerable latitude was given to counsel for the appellant in raising issues before his Honour. I wanted to give Mr Scragg every opportunity to put everything that he has, and he certainly has taken every point, as you say. It could never be said that he hasn't closely examined it all and brought up every possible argument, but really, I approach it somewhat differently, I think. I think I'm entitled to approach it somewhat differently. 31 In making this observation his Honour clearly was adverting to the objective in making a lump sum award and to the function of the discount rate to be applied in estimating an appropriate sum of costs. On the appeal, counsel for the appellant has sought to turn the latitude given him in raising "every possible argument" into a means of attack on the decision under appeal. It is said that, as the reasons did not disclose that the Federal Magistrate expressly addressed his arguments, his Honour has not taken them into account. It is perfectly clear that, as on the appeal, counsel raised a range of "arguments" which clearly were not relevant given his Honour's decision not to order costs to be taxed, or which necessarily were rejected given his Honour's acceptance of Mr Williams' evidence. Equally, when one has regard to the function performed by the discount rate chosen by his Honour, it is obvious, in my view, that account was taken of matters raised by Mr Scragg to the extent that they were relevant, or were not inconsistent with the evidence accepted by his Honour. Again I would note that there is no ground of appeal based on inadequacy of the Federal Magistrate's reasons though this appears to inform the above challenge to the reasons. 32 Turning briefly to the grounds of appeal, almost all of which have been implicitly rejected in what I have already said, I will merely note the following. 33 The ground 1 challenge to the practitioner's charge out rates "allowed" (which it is complained were higher than Adelaide rates) was the major matter raised by the Federal Magistrate with counsel for Autodesk Australia. Having regard to the facts that negotiations over the copyright were being held in Sydney prior to the institution of the Adelaide proceeding and that an advantage in those negotiations was being sought in initiating a proceedings in Adelaide (albeit one doomed to failure), it is unsurprising that Sydney lawyers were engaged for the purposes of the proceedings and that, in selecting the starting point for the lump sum estimates, the Sydney rates (being the actual rates charged the respondent) were employed but were then discounted. In short, the appellant misapprehends the process employed by the Federal Magistrate. It was not a taxation. The same comment can be made of grounds 2(a) and 2(b), but with the additional emphasis that a function of the discount is to avoid the necessity for engaging in detailed examination of the "allowances" referred to in those grounds. For my own part, given that the application was dismissed at the appellant's request and was in any event doomed, I do not consider that an "issues based" approach to costs, even if a taxation had been made, would have been appropriate in this matter. I need not enlarge upon this. Grounds 3 and 4 appear to relate to costs incurred in the New South Wales proceedings. It is to be noted that the invoice exhibited to Mr Williams' affidavit erroneously included a minor amount from those proceedings which amount was removed from the process of calculation at the 6 December hearing. A related allegation that an identical affidavit was used in both proceedings was conceded by Autodesk Australia, but the evidence is that it was prepared for the Adelaide proceedings. It was in consequence properly included in the costs incurred in that proceeding, howsoever it may be dealt with for costs purposes in the other proceedings. Ground 5 is simply misconceived. Ground 6 is at best a challenge to the fairness of the award made and, on the material before his Honour, I am not satisfied that the alleged unfairness has been made out. As to ground 7, I merely say in light of the matter's history, there was ample justification for his Honour taking the course he did. The course of this appeal is further testament to the need for finality and economy perceived by his Honour. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | challenge to an exercise of discretion by a federal magistrate to fix costs in a lump sum figure rationale of avoidance of "expense, delay and the protraction of litigation" no error disclosed costs |
The Court ordered that the appeal be dismissed with costs and said that it would publish its reasons at 2.30 pm today. What follows are my reasons for the making of those orders. 2 The appellant, Jia Da Shen, is aggrieved by the decision of a delegate of the respondent Minister to cancel his student visa. He applied to the Migration Review Tribunal for a merits review of the decision but the Tribunal affirmed the delegate's decision. The appellant then sought judicial review of the decision of the Tribunal but the Federal Magistrates Court dismissed that application. He now appeals to this Court. Did the Tribunal ask itself the wrong question in deciding a factual matter adversely to the appellant concerning his attendance during contact hours at school? 2. Was the Tribunal able to rely on grounds for cancellation other than the one originally identified to the appellant by the Minster's delegate? 3. Was the validity of the cancellation affected by technical problems with the notice sent to him under the Education Services for Overseas Students Act 2000 (Cth)? 4. Was the appellant denied natural justice? He came to Australia in August 2001 as the holder of a Student (Temporary) (Class TU) Visa, subclass 560. The visa had an expiry date of 15 March 2004. 5 The appellant enrolled in a course of secondary education at Eltham College for the academic years 2002 and 2003. 6 Semester 1 in 2003 commenced on 3 February 2003 and concluded on 27 June 2003. 7 On 4 June 2003, Eltham College sent the appellant a notice under s 20 of the Education Services for Overseas Students Act 2000 (Cth). The s 20 notice advised the appellant, amongst other things, that he had breached a condition of his student visa relating to course attendance requirements. 8 In response to the s 20 notice, the appellant attended the office of the respondent Minister's department in Lonsdale Street, Melbourne on 23 June 2003. On that day, a departmental officer handed him a " Notice of Intention to Consider Cancellation " under s 116 of the Migration Act 1958 (Cth). Absent for SAC on 29/5/03. Absent for Further Methods for 26 out of 46 classes. Has not submitted 4 assessment tasks. ESL --- absent for 6 lessons and 30 minutes late on 2 occasions. Physics --- missed at least 4 lessons and absent for Physics SAC. Possible breach of 8202 condition. The notification is still valid but non-enrolment has also been added for the client as he has no current enrolment. Breach of visa condition 8202. 13 After interviewing the appellant on 3 October 2003, the delegate cancelled the visa under s 116(1)(b) and (3) of the Migration Act 1958 (Cth). Under those provisions, the Minister may cancel a visa if the holder has not complied with a condition of it and must do so if there exist prescribed circumstances in which a visa must be cancelled. On 22 March 2004, the Tribunal decided to affirm the decision under review. It also noted that the appellant left school on 10 June 2003 to transfer to another course due to commence on 30 June 2003. It further observed that, on his own evidence, the appellant either did not enrol in that other course or had enrolled but did not pay fees. 17 Before the Tribunal the appellant took issue with the accuracy of the attendance records provided by Eltham College. The Tribunal found that it had "no reason to believe that the attendance records provided by Eltham College are other than an accurate record. " It considered that the appellant had not met condition 8203(3)(a). It also said that condition 8203(3)(b) had not been met as the College had not certified that the appellant had achieved a satisfactory academic result. Further, it found that the appellant had breached condition 8202(2) by not being engaged in full time study at any institution between 11 June 2003 and the cancellation of his visa on 3 October 2003. In Quan , the Court held that the Tribunal had asked itself the wrong question by not considering "whether it had reached a state of satisfaction as to the contact hours attended"; see Quan at [36]. 20 In Quan the attendance records related to only the total number of days at which Mr Quan attended at the school. They bore no relation to what actually occurred during his attendance at school. 21 The Federal Magistrate observed that the records from Eltham College were class attendance records and not daily attendance records as in Quan. Therefore, to calculate a percentage of classes attended was to calculate a percentage of contact hours attended. His Honour said that the Tribunal had evidence before it about attendance and determined, on that evidence, that the required percentage of contact hours was not attained. Therefore, he considered that the Tribunal did not ask itself the wrong question. 23 The Federal Magistrate also dismissed the appellant's submissions based on natural justice and related grounds. He said that the Tribunal was not obliged to search for evidence on the College's practice of recording lateness for class or the way attendance on medical practitioners affected attendance records. 24 His Honour found, in any event, that the Tribunal had independent valid grounds for affirming the cancellation of the visa given the lack of certification of a satisfactory academic result and the failure of the appellant to be enrolled in full time study from 11 June 2003 until the cancellation of the visa. Counsel also said that the Tribunal was not able to rely on a breach of condition 8202(2)(b), or the condition relating to satisfactory academic performance, given that the s 20 notice only referred to attendance requirements. Counsel contended that reliance on these conditions by the Tribunal amounted to a denial of natural justice. In his oral submissions, counsel contended that the Tribunal's reliance on the condition relating to satisfactory academic performance amounted to a breach of s 359A of the Act. Counsel also submitted that the Tribunal erred by considering whether the applicant was engaged in full time study, and not whether he was enrolled in a course. Counsel further submitted that the Tribunal erred by disregarding the effect of the alleged statement of the delegate that the applicant was not permitted to study in Australia. 26 Counsel for the Minister submitted that "contact hours" in condition 8202 refers to the proportion of required contact hours attended by the student. He said that there was no suggestion before the Tribunal that the length of classes varied from subject to subject. Counsel also agreed with the Court below that Quan was distinguishable. Counsel also contended that there was no basis for the submission of the appellant that the attendance records did not properly reflect when he was late, as distinct from absent. Counsel drew attention to the appellant's failure to persuade the Tribunal that he had been marked as absent on two occasions when he had merely been late. 28 Counsel for the Minister submitted that the s 20 notice did not act as precondition to the cancellation under s 116. He also contended that the appellant could not have been taken by surprise by the findings that he was not enrolled in course of study and was not the beneficiary of certificate of satisfactory completion of study as each matter was an incontrovertible fact. Those records enabled an assessment of "contact hours" within the definition of those words in the regulations. The Tribunal's calculation of the contact hours attended by the appellant was a question of fact for it to determine. Unlike in Quan , the Tribunal did consider whether it had reached a state of satisfaction as to contact hours attended. It did not merely consider the total number of days attended as a proportion of the number of days in the term. No judicially reviewable error arose as a result of the Tribunal's treatment of this issue. 32 In Minister for Immigration and Multicultural and Indigenous Affairs v Yu [2004] FCAFC 333 it was held, by majority, that s 20 of the Education Services for Overseas Students Act does not limit the circumstances in which s 116 of the Migration Act might operate where condition 8202 has not been complied with by a visa holder. 33 Consequently there was nothing stopping the Tribunal from relying on grounds other than the attendance record ground. No breach of natural justice arose as a consequence because the facts giving rise to these breaches of condition 8202 were obvious and incontrovertible. This is especially so where, as here, s 357A applied to the application for review such that general procedural fairness grounds of review were not open to the appellant in the Court below. Any allegation that s 359A of the Act was not complied with by the Tribunal, due to an alleged failure to raise with the appellant the College's lack of certification of satisfactory completion of his course, is met by the fact that the Tribunal had two other independent grounds for cancelling the visa. See, by way of analogy in respect of s 424A, SZEEU v The Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 at [160] per Weinberg J and [233] per Allsop J. In other words, the failure of the Tribunal to inform the appellant that the visa could be cancelled as a consequence of a lack of certification of successful completion of his course did not affect the outcome of the review. Furthermore, the lack of certification was something so obvious that it need not have been stated and was a vital requirement for satisfaction of condition 8202. 34 The appeal ground relating to the Tribunal's consideration of whether the applicant was engaged in study, rather than whether he was enrolled in a course, was not developed further in oral submissions before the Court. The contention of the appellant that he was not so enrolled because the delegate allegedly told him not to enrol does not deny the fact of his non-enrolment. In any event, this ground is, again, independent of the other grounds for cancellation of the visa, that is, failure to achieve satisfactory academic results and failure to meet the attendance requirements. 36 In Morsed , the appellant claimed that his breach of condition 8202 was due to exceptional circumstances beyond his control. No such issue of circumstances beyond the control of the appellant is relevant here. On that view alone, Morsed is distinguishable. 37 In any event, the cancellation of the student visa in Morsed arose as a result of the automatic effect of s 137J of the Migration Act , consequent upon a s 20 notice. It did not arise, as here, by virtue of the independent operation of s 116 of the Migration Act . | appeal student visa whether the migration review tribunal asked itself the wrong question in considering whether the appellant had attended 80% of scheduled contact hours whether the tribunal is able to rely on grounds for cancellation other than those originally identified to the appellant by the minster's delegate whether the validity of the visa cancellation was affected by defects in the notice provided under s 20 of the education services for overseas students act 2000 (cth) migration law |
2 Black & Decker succeeded in a claim for patent infringement. On 18 April 2008 I gave judgment in their favour on liability issues and on 19 June 2008, amongst other things, I ordered that the respondent GMCA pay Black & Decker's costs of the claim and cross-claim, including reserved costs, such costs to be taxed as between party and party except for some items on an indemnity basis. The costs could be quite substantial. The trial extended over seven days with senior counsel on each side. I note that, in the interests of expedition, Black & Decker have now waived their right to any indemnity costs. 3 The discretion to order gross sum costs is in quite general terms and may be exercised whenever the circumstances warrant it: Harrison v Schipp (2002) 54 NSWLR 738 at [21]. The purpose of the rule is to avoid the expense, delay and aggravation involved in litigation arising out of the taxation process: Leary v Leary [1987] 1 WLR 72; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120. 4 The main ground on which Black & Decker rely is what is said to be the dire financial circumstances of GMCA, coupled with certain transactions which may be set aside if Black & Decker are able to obtain a winding up order reasonably promptly. The relevant events can be summarised as follows. 5 On 25 June 2008, that is less than a week after costs orders were made, Messrs Hosking and D'Antonio, who are the sole directors and shareholders of GMCA, registered a fixed and floating charge dated 23 June 2008 in their favour from GMCA. On the same day GMC Worldwide Pty Ltd, a related company having the same directors and shareholders as GMCA, registered a fixed and floating charge of the same date from GMCA. Messrs Hosking and D'Antonio have also registered a fixed and floating charge in their favour from GMC Worldwide. On 24 June GMCA launched appeal proceedings. 6 On 30 September GMCA's solicitors, Kahns Lawyers, filed a notice of ceasing to act. The next day Mr Hosking forwarded to the solicitors for Black & Decker and also to the Registrar of the Federal Court a letter stating, amongst other things, that GMCA wished to "withdraw very shortly" from the appeal and that it did not intend to instruct its solicitors in light of "the extraordinary financial circumstances of the company". The letter stated that GMCA was attempting to avoid the need for external administration and as a consequence expenses such as legal fees and court application costs would need to be minimised. (Kahns Lawyers have subsequently been retained and are now on the record again. Can you send me the paperwork to do this? It's pointless for anyone to spend more money as theirs [sic] none to get. 8 The significance of the timing of the Hosking and D'Antonio charge is that under s 588FJ of the Corporations Act 2001 (Cth) the charge would be void in respect of any previous advances if a winding up order were made within six months, that is by 23 December 2008. To obtain such an order it is likely that Black & Decker would have to serve a statutory demand requiring payment within 21 days. The effect of that is that Black & Decker would need to have judgment for some dollar amount by 28 November. It would be impossible to have costs taxed on a bill in the ordinary way during that time. 9 Counsel for GMCA points out that under ss 588FA and 588FC of the Corporations Act the charge could be voidable at the suit of a liquidator of GMCA as an "unfair preference" or "insolvent transaction", in which case a longer relation-back period would be applicable. If the charge were found to be an "insolvent transaction", which requires proof of the transaction being an "unfair preference", and the transaction resulted in the company becoming insolvent (s 588FC) and a "related entity" is a party to it, then under s 588FE(4) it would be voidable if entered into during a four year period prior to the "relation-back day", ie the date the winding up application was filed: s 9. However, such a remedy would be much inferior to that provided by s 588FJ because the onus would be on a liquidator to make out the statutory requirements. 10 It is true, as counsel for GMCA pointed out, that the gross sum assessment process would not be as accurate as taxation in the normal way, but any theoretical departure from what would be fixed on taxation could just as much favour GMCA as it might Black & Decker. Gross sum assessment necessarily involves some broad brush treatment. 11 It is therefore appropriate to make an order in the circumstances of this case. There has already been a provisional retainer of Ms Meg Gourlay, a costs consultant with the Costing Service of the Law Institute of Victoria, and the expectation is that Ms Gourlay would be able to form the relevant assessment within an appropriate time. A timetable has been agreed upon. The attitude of counsel for GMCA, which I must say I think is very sensible, is that they do not oppose the appointment of Ms Gourlay as a court expert under O 34, subject to two conditions, to which Black & Decker agree. That the costs be paid by Black & Decker, that is that the court otherwise orders for the purposes of O 34, r 5(2). 2. That GMCA be at liberty to adduce evidence of any other expert on the question; see O 34, r 6(b). I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | gross sum costs order urgency of attaining costs figure in light of time limits for application to have fixed and floating charges declared void costs |
She was then granted a provisional spouse visa (subclass 309, Partner (Provisional) (Class UF)). She applied for a permanent visa (subclass 100 Partner (Migrant) (Class BC)), which normally cannot be granted until two years have elapsed. However, in the meantime her husband, the "sponsoring spouse", returned to Cambodia on a business trip and died there. That refusal was affirmed on review by the Migration Review Tribunal. An application for judicial review was refused by Connolly FM: Chinda Nouv v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FMCA 1101. The appellant now appeals to this Court. 3 The factual background, the relevant legislation and the terms of the Tribunal's decision are set out in the decision of the learned Magistrate and it is not necessary to repeat them. 7 It is true that in its detailed reasons the Tribunal did not mention the appellant's attendance at the funeral, although it did (at [41]) accept that she "may have experienced sadness at the time of the sponsor's death and ... that she and the sponsor may have been friends or become friends in the process of preparing and pursuing the visa application". 8 However, the way with which the Tribunal was required to deal with the factual material before it was affected by the way the case was put. The ground of failure to take into account a relevant consideration will only be made good if it is shown that the decision-maker has failed to take into account a consideration which he was, in the circumstances, bound to take into account for there to be a valid exercise of the power to decide. Also some of the statutory declarations by friends of the appellant made passing reference to her attendance at the funeral. The clothing belonging to the applicant's deceased husband was taken to Cambodia by the applicant when she attended his funeral. It is normal for a widow to give her husband's clothing to the poor and this is what she did. The deceased left many of his personal papers with the applicant when he went to Cambodia. Copies of these accompany this letter. The applicant says this is consistent with normal arrangements between spouses. The applicant obtained her husband's passport from his mother in Cambodia when she visited at the time of the funeral. The funeral attendance was not put as something of relevance in itself. 11 At most, the appellant's attendance at the funeral was, as the learned Magistrate said at [29], merely a piece of evidence and cannot be elevated to an integer of the claim. One of the requirements for the permanent visa is that the applicant is the holder of a provisional visa. Therefore, it was said, although the Tribunal had to consider other criteria as at the time of its decision, it should not have "re-agitated" the issue whether at the time of the grant of the provisional visa the criteria for the grant of that visa were or were not satisfied. In effect, the Tribunal should have proceeded on the basis that when the provisional visa was granted the appellant was a "spouse" of the sponsoring spouse, that is to say they were in a "married relationship" as defined in reg 1.15A. The Tribunal failed to identify the point in time at which the married relationship had to exist. 13 It seemed implicit in counsel's argument that the grant of the provisional visa created some kind of presumption and that the Tribunal could only refuse the permanent visa if it was satisfied that what was a genuine married relationship had ceased by the time of the death of the sponsoring spouse. 14 As Phipps FM pointed out in the analogous case of Ho v Minister for Immigration and Multicultural Affairs [2006] FMCA 1285 at [28] , the Tribunal may have, and often will have, different and additional evidence bearing on the parties' relationship at the time of the grant of the permanent visa. It must make its own assessment of that evidence. There is no basis in the regulations for saying that it must accept as correct a previous decision based on different evidence. 15 The appeal will be dismissed with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | permanent spouse visa application death of sponsoring spouse migration |
The appellant says that retirement benefits paid to him by the United States Social Security Administration (US Administration) should not have been taken into account when calculating his entitlement to Newstart Allowance in Australia. The appellant is acting for himself. The dispute is whether the appellant had been overpaid $3,021.50 in Newstart Allowance. The appellant, in the prosecution of the various appeals from that decision of Centrelink, has boldly added a claim that, as a consequence of the decision of Centrelink, he is entitled to "$15,000 pecuniary, $37,500 aggravated, and $140,000,000 exemplary damages". The appellant has been in receipt of a Newstart Allowance from Centrelink since about 23 April 2004. In December 2005, he applied for retirement benefits paid by the US Administration. In May 2006, the appellant was advised by the US Administration that he was entitled to retirement benefits and was paid US$3,950.00 in arrears in respect to the period 1 December 2005 to 30 April 2006. He has since been paid on-going payments of $US790.00 per month. On 5 June 2006, the appellant advised Centrelink of the advice from the US Administration. On 28 July 2006, Centrelink determined that the lump sum US Retirement Benefit payment had to be taken into account when calculating the appellant's entitlement to a Newstart Allowance, and that the appellant had been overpaid Newstart Allowance during the period 1 December 2005 to 30 April 2006 in the amount of $3,021.50. That was the amount which Centrelink was required to recover. The issue is whether Centrelink was required, in calculating whether there had been an overpayment of Newstart Allowance, to take into account the lump sum US Retirement Benefit payment that had been made to the appellant. For the reasons which follow, no error has been shown in the judgment of Burnett FM that Centrelink was entitled to recover, as a debt due to the Commonwealth, an amount of $3,021.50, being the amount that was overpaid to the appellant in relation to his Newstart Allowance. I am also satisfied that Burnett FM was correct in concluding that there was no miscarriage in the exercise of the Administrative Appeals Tribunal's (the AAT's) discretion to refuse a waiver of the lump sum pursuant to s 1237AAD of the Social Security Act 1991 (Cth) (the SS Act). After the US Administration advised the appellant by letter that he was entitled to retirement benefits, the appellant notified Centrelink of this advice on 5 June 2006. Centrelink then made the decision referred to above, that the Secretary, Department of Employment and Workplace Relations was entitled to recover $3,021.50. Following internal Centrelink reviews, on 29 September 2006 the appellant appealed to the Social Security Appeals Tribunal who, on 17 November 2006, affirmed the original decision of Centrelink of 28 July 2006. On 19 December 2006, the appellant appealed to the AAT, who, on 27 July 2007, affirmed the original decision of Centrelink. On 21 August 2007, the appellant filed a Notice of Appeal in the Federal Court of Australia. On 12 October 2007, I ordered the matter be transferred to the Federal Magistrates Court pursuant to s 44AA(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). On 15 October 2008, the Federal Magistrates Court dismissed the appellant's appeal. On 31 October 2008, the appellant filed a Notice of Appeal in the Federal Court of Australia. The two grounds of appeal specified in that Notice of Appeal are: Appellant receives a US retirement pension, a graduated portion of which has been, and is being wrongfully deducted from Appellant's Australia pension administered by Centrelink, in contravention of the Social Security (International Agreements) Act 1999 , et al. Appellant respectfully submits that the Magistrate's decision contains several reversible errors. The orders sought in that Notice of Appeal are: that as a matter of law, all the Appellant's US Social Security Administration retirement pension payments are not deductible from applicant's Centrelink pension. that Centrelink must immediately stop all deductions of applicant's US Social Security Administration retirement pension from applicant's Centrelink pension. that Centrelink must return to applicant all deductions already made, in aggregate about $5,000 per year for three years = about $15,000. that Centrelink must further compensate applicant with Aggravated Damages in an amount calculated at 2.5 times the amount of all deductions illegally made, for pain and suffering caused by the official oppression, government malice, abuse of authority, and attendant frustration, harassment, vexation, loss of amenity, and mental anguish that Centrelink has inflicted upon appellant, an amount of about $15,000 x 2.5 = $37,500. that the Court will maintain jurisdiction until its orders are fulfilled, or appealed. On 17 December 2008, the matter came before me for directions, and for the hearing of a Notice of Motion which sought to join a number of respondents to the proceedings. I dismissed the Motion seeking joinder of various non-parties and made the following orders: The appellant have leave to file and serve an Amended Notice of Appeal, identifying with specificity the grounds of appeal, by 4.00 pm on Friday, 23 January 2009. The powers and functions necessary for the settling of the appeal book index and the preparation of the appeal book, as set out in Order 52 rule 28A of the Federal Court Rules , are delegated to the District Registrar. The matter be adjourned for hearing on a date and time to be set, to be communicated to the parties by the District Registrar. The costs of today be reserved. On 27 January 2009, Deputy District Registrar Baldwin made the following orders: The appeal be listed for hearing on a date to be fixed and advised to the parties. The appellant file an appeal book in accordance with the appeal index settled by the Deputy District Registrar on 27 January 2009. The appeal book is to be filed and served on the respondent on or before 20 March 2009. The appellant file and serve written submissions of no more than 10 pages by 4 pm, 10 clear working days before the date set for hearing of the appeal, together with any copies of any authorities upon which the appellant wishes to rely, with the relevant passages highlighted or otherwise marked. The respondent file and serve short written submissions of no more than 10 pages by 4 pm, 5 clear working days before the date set for hearing of the appeal, together with copies of any authorities upon which the respondent wishes to rely, with the relevant passages highlighted or otherwise marked. The parties have liberty to apply on 7 days written notice to the other party. This "Second Amended Notice of appeal" occupies some 18 pages, and is diffuse and argumentative. No leave was sought to file this document. The "submission" contains a total of 71 "attachments", extending to some hundreds of pages. The grounds of appeal that can be distilled from the "Second Amended Notice of appeal" appear to be: The purpose of the "International Agreement" in Schedule 13 of the Social Security (International Agreements) Act 1999 (Cth) (the SSIA Act) is not to prevent 'double dipping' of benefits, and the AAT was wrong to conclude that it was. The appellant's US pension is exempt from deduction, as it is not a "comparable" benefit. The appellant's US pension is exempt because his pension is superannuation. The Federal Magistrate erred by upholding the AAT's decision not to exercise its discretion in not waiving the appellant's debt due to his special circumstances, and failed to give reasons why he did not consider them "special circumstances". The Federal Magistrate erred by failing to consider an erroneous issue raised by the respondent which would have shown that the respondent's claim "was false in all material respects". There was bias. The AAT failed to resolve the appellant's claims, and the Federal Magistrate erred by failing to give reasons why this was not a question of law. There was fraud and misconduct on the part of the respondent, and the Federal Magistrate erred by "failing to give reasons why they considered that the overwhelming evidence of Respondent's fraud and misconduct was unfounded speculation". The appellant handed up a further "submission" at the hearing. The appellant's core contention is that his US pension is exempt because his pension is "superannuation". He further complains that the debt determined by Centrelink to exist should have been waived due to his "special circumstances". The Agreement is Schedule 13 to the Social Security (International Agreements) Act 1999 (Cth) (the SSIA Act). The terms of the Agreement have the force of law in this country: s 6 of the SSIA Act. Article 1 of the Agreement defines the term "benefit". The Australian superannuation guarantee laws in question are expressly identified in Article 2, 1(b)(ii). The short answer to the appellant's point is that "benefit" comprehends a payment of a US Social Security benefit, and is not excluded by the qualifying words "for Australia, does not include any benefit, payment or entitlement under the law concerning the superannuation guarantee". The lump sum payment received from the US Administration was not paid under any of the identified Australian superannuation guarantee laws. It is irrelevant whether the payment received from the US Administration is of the same nature as payments under the Australian superannuation arrangements, or is different in nature. The retirement benefits paid by the US Administration fall into the categories of payments referred to in Article 2, 1(a). The payments made by the US Administration are not paid pursuant to any Australian law concerning the Superannuation Guarantee. The payments received by the appellant are a "benefit" for the purpose of Schedule 13 of the SSIA Act. No error can be demonstrated in the approach of the Tribunal in its construction of the agreement. Accordingly the appeal on this ground fails. Notwithstanding the extensive claims and arguments advanced by the appellant, Burnett FM was right to dismiss the appeal to the Federal Magistrates Court for the reasons which his Honour gave. The appeal to this Court will be dismissed for the reasons which I have set out above. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender . | whether centrelink was right to deduct retirement benefits paid to the appellant by the united states social security administration from his newstart allowance pursuant to schedule 13 of the social security (international agreements) act 1999 (cth) whether the appellant's united states pension is exempt as it is superannuation definition of the term "benefit" in schedule 13 "benefit" comprehends a united states social security benefit appellant's benefit was not paid under any of the australian superannuation guarantee laws specified in schedule 13 appeal dismissed. s 1237aad social security (international agreements) act 1999 (cth) s6 , schedule 13 social security social security act 1991 (cth) |
His employment by the Club came to an end on 17 October 2006 in circumstances that are in dispute. 4 The Union thereafter instituted this proceeding on behalf of Mr Roberts by filing an application for relief from unlawful termination (s 663(3) and (5) of the Act). The relief sought is that Mr Roberts be reinstated in his previous position as a Permanent Level 5 Supervisor and that he be compensated by the Club for the loss of wages suffered by him between termination and reinstatement. The only ground upon which it is contended that the termination of Mr Robert's employment was unlawful is that identified in s 659(2)(g) of the Act; namely, that his employment was terminated by his employer for the reason, or for reasons including the reason, that he refused to negotiate in connection with, make or sign an Australian Workplace Agreement ('AWA'). 5 For the reasons set out below I have concluded that the application should be dismissed. The position offered to him was Permanent Level 5 Supervisor commencing on 8 July 2005 and that his salary and conditions were in accordance with the Club Employees (State) Award. The Court was not provided with a copy of that award but Mr Roberts' remuneration records show that he was paid at the ordinary rate of $16.99 per hour and received penalty rates for working on weekends. 7 The financial records of the Club show that it operated at a loss during the year ending 31 December 2005 with the catering division showing a loss of $41,547. The Club's income statement for the year ending 31 December 2006 shows that it also operated at a loss during that year. The Treasurer's report for 2006 stated that the loss included a loss in catering of $239,614. 8 Ronald Nairne has held the position of General Manager of the Club since 1 May 2006. Mr Nairne gave evidence, which I accept, that during 2006 a decision was taken by him and the Deputy General Manager of the Club, Neil Patchett, to restructure the catering division of the Club for financial and performance reasons. 9 Under the structure that prevailed when Mr Roberts was employed by the Club, there were two positions for senior chefs in the catering division: an executive chef and the Supervisor's position held by Mr Roberts. After the catering division was restructured there were three positions for senior chefs: an Executive Chef, a Sous Chef and Chef de Partie. There was no position of Supervisor. Mr Nairne explained that the additional senior position was created because of performance issues including issues concerning the quality of the food. 10 Mr Patchett was the Deputy General Manager of the Club from 1 May 2006 until 9 November 2006. He gave evidence that Mr Roberts worked in the new position of Sous Chef for a short trial period but that the trial as unsuccessful and he reverted to his Supervisor's position. Mr Roberts applied unsuccessfully for the new position of Chef de Partie. 11 On about 10 October 2006 Mr Nairne spoke to Mr Roberts in the presence of Prakash Osborne who then held the position of Executive Chef. Mr Nairne told Mr Roberts about the restructuring of the catering division and that his position was being made redundant. Mr Nairne offered Mr Roberts a new position of Chef. Mr Roberts was told that the new position was on an AWA and the annual salary was $35,000. I accept Mr Nairne's evidence that Mr Roberts initially did not appear to understand what he was being told and that he responded in words to the effect that he had a position as a Supervisor and that was his position. Mr Nairne handed to Mr Roberts a letter which referred to the new organisational structure and advised him that the position of Supervisor no longer existed. The letter offered Mr Roberts the position of Chef with an AWA of $35,000 per annum. It indicated that he had fourteen days to consider the position but that another meeting would be held in seven days to discuss further his options. 12 Two relevant meetings took place on 17 October 2006. There is little dispute as to what occurred at them. Mr Patchett made what he described as minutes of the meetings shortly after the respective meetings finished. Mr Roberts accepted the accuracy of the minutes prepared by Mr Patchett except for a few matters of detail. 13 I am satisfied that the first of the two meetings on 17 October 2006 took place at approximately 10:30 am. Mr Nairne reminded Mr Roberts that it was seven days since the letter of offer was handed to him and asked if he had any questions or if he had made a decision. Mr Roberts responded that he was not changing his position and that he wanted a witness present at the meeting. When Mr Nairne put to Mr Roberts that he was declining the position of Chef, Mr Roberts acknowledged that he was not accepting that position. Mr Roberts made arrangements for his aunty, Ms Paterson, (I adopt Mr Roberts' spelling of his aunty's name) to attend the meeting as a witness. 14 At about 2:45 pm that day Mr Roberts was handed a letter by Mr Nairne. When Ms Paterson asked what was going on Mr Nairne responded that, as it had been explained to Mr Roberts, with the changes to the Club business a new organisational structure had been created and Mr Roberts had been offered, but declined, the position of Chef so he was being offered redundancy. Ms Paterson clarified that Mr Roberts had been offered a chef's position on an AWA. He obtained alternative employment as a casual employee approximately two weeks after he ceased to be employed by the Club. He was paid at the ordinary rate of $19.00 per hour in his new employment. At the time of trial Mr Roberts was still employed on a casual basis, albeit by another employer, but he expected his position to become full time. 17 Although it was suggested to Mr Roberts that he does not seriously want to be reinstated in his employment with the Club as a Level 5 Supervisor, I accept his evidence that he does want his old position with the Club back. However, as the Club no longer has a catering division reinstatement to that position is not a reasonable option. Were I satisfied that the Club had contravened s 659 in relation to the termination of Mr Roberts' employment, alternative orders under s 665 would need to be considered. It was submitted that it was immaterial that the AWA related to a position that he did not hold; had he agreed to sign the AWA he would not have been dismissed. 19 I do not accept that s 659(2)(g) of the Act calls for the application of a simple 'but for' test of causation. Section 659(2) is concerned to proscribe the termination by an employer of an employee's employment for any one or more of nine separate reasons, or for reasons that include those reasons. Subject to s 664, the subsection calls for the identification of the employer's reason or reasons for terminating the employee's employment. 20 Section 664 of the Act is the analogue of the old s 298V. However, the Club will have established a defence to the Union's application if it has proved that Mr Roberts' employment was terminated for a reason or reasons that do not include a proscribed reason. 22 As indicated above, I am satisfied that in or about September 2006 the Club's management decided to restructure the catering division because it was operating unprofitably and because it was experiencing food quality problems. The position of Level 5 Supervisor held by Mr Roberts did not exist under the new staff structure. Nonetheless, Mr Roberts continued in his employment for a period of time after staff were recruited to fill the new positions of Sous Chef and Chef de Partie. 23 I do not accept that Mr Roberts' position continued in existence in the new structure but under the title, Chef de Partie. Mr Nairne expressly denied this suggestion and it was not put to Mr Patchett. Moreover, had Mr Nairne and Mr Patchett undertaken the restructure to get rid of Mr Roberts, it seems unlikely that they would have given him the opportunity to act in the more senior position of Sous Chef on a trial basis. 24 I am satisfied that Mr Roberts' employment was not terminated earlier than it was because the Club wished to give him the opportunity of filling a position in the new structure. As mentioned above, he was given the opportunity to fill the position of Sous Chef on a trial basis but the trial was not successful. Thereafter he was an unsuccessful applicant for the position of Chef de Partie. Thereafter the only unfilled position in the new structure for which he was a suitable, if perhaps overqualified, candidate was the position of Chef. The position of Level 5 Supervisor did not exist under the new structure. 25 Once the new positions of Sous Chef and Chef de Partie had been filled, I am satisfied that the employer no longer required the job previously undertaken by Mr Roberts as Level 5 Supervisor to be done by anyone. Mr Roberts' position had become redundant ( R v Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-op Ltd (1977) 16 SASR 6 per Bray CJ at 8). However, Mr Roberts was unwilling to give up the position of Level 5 Supervisor. It seems likely that he did not understand that continuing in that position was not an option open to him. 26 The salary that was to be paid to the holder of the position of Chef was less than Mr Roberts was earning in the position of Level 5 Supervisor. Mr Roberts acknowledged that after he was offered the position of Chef on 10 October 2006 he spoke with Mr Osborne and expressed concern about the position's salary but not the need to sign an AWA. I accept that Mr Roberts was unwilling to sign an AWA that provided for an annual salary of $35,000 per annum. However, I am satisfied that he would not have accepted the Chef's position on that salary even if he were not required to sign an AWA. 27 I conclude that the only reasons why Mr Roberts' employment by the Club was terminated were that his position of Level 5 Supervisor became redundant following the implementation of the catering division's restructure and he was unwilling to accept the lower paid position of Chef. The Club has therefore proved that the termination was for reasons that do not include a proscribed reason (s 664 of the Act). I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson . | alleged unlawful termination whether employee terminated for proscribed reason within s 659(2)(g) refusing to sign an awa application of s 664 held: employee dismissed as position became redundant employer established defence under s 664(b) application dismissed industrial relations |
Mr McIlroy and Ms St Henry were employed by CE Marshall & Sons Pty Ltd ("the respondent") at Blackwater Mine during the period 15 February 2006 to 10 May 2006. Their employment was terminated on 10 May 2006. The applicant asserts that the respondent dismissed the employees for a prohibited reason, namely because they were members of an industrial association and/or because as members of an industrial association they did an act for the purposes of furthering or protecting the industrial interests of the applicant, which act was both lawful and within the limits of an authority expressly conferred by the applicant under its rules. 3 Section 792(1) is a civil remedy provision: s 792(2). 4 Section 807(3) provides that orders which may be made under s 807(1)(c) include injunctions and any other orders the Court considers necessary. 5 The parties agreed that the trial should proceed on the basis that any issue as to pecuniary penalties pursuant to s 807(1)(a) of the Act would not be dealt with during the current hearing and would, if necessary, be considered at a later date. Accordingly, only submissions as to the remedies of compensation and reinstatement formed part of Counsel's arguments during the trial. 6 During the course of the hearing two key issues emerged for consideration. Whether the respondent dismissed the employees contrary to s 792(1)(a) for the prohibited reasons set out in s 793(1)(a) and (o). Specifically, whether the respondent terminated the employment of the employees for the reasons that they were members of an industrial association and/or because as members of an industrial association they did an act for the purposes of furthering or protecting the industrial interests of the applicant, which act was both lawful and within the limits of an authority expressly conferred by the applicant under its rules. 2. Whether in fact the employees were members of an industrial association, namely the applicant, at the relevant time. 7 Predominately, the evidence given on affidavit and during the hearing related to the first issue. The issue as to whether the employees had actually become members of the applicant at the relevant time was the subject of contention during the hearing, to the extent that at the conclusion of his submissions in reply, Mr Hinson SC on behalf of the applicant sought the leave of the Court to amend the applicant's statement of claim to include a claim that the employees were dismissed in contravention of s 793(1)(a) because they proposed to become members of an industrial association. After hearing submissions by both Mr Hinson SC, and Mr Horneman-Wren on behalf of the respondent, I refused leave on the ground that, in view of the timing of the application to amend, the amendment could not be made without substantial injustice to the respondent. This was particularly so in view of the facts that the applicant claimed the respondent was in breach of a civil remedy provision (as a result of which the respondent could be subject to penalties), and further that the respondent bore the onus of proof so far as the case concerned reasons for termination of employment. 8 Clearly, if the reasons for termination of the employees' employment were not prohibited by the relevant sections of Act claimed by the applicant, the claim of the applicant would not succeed, irrespective whether the employees were members of the applicant at the relevant time. For this reason, and in view of the manner in which the trial was conducted, I propose to deal first with the issues concerning termination of employment, and then deal, if necessary, with the issue whether the employees were members of the applicant at the relevant time. 10 The respondent company specialises in earthmoving, overburden removal, mud removal, dozer stripping, rehabilitation and topsoil works. Mr McIlroy performed the duties of plant operator. Ms St Henry performed duties as a truck driver; she is also qualified as a "Trainer Assessor" and trained new employees in this capacity. 11 Mr McIlroy and Ms St Henry lived together, and were at various times described by other witnesses as married or engaged to be married. It is clear that Mr McIlroy and Ms St Henry were regarded as "a couple" by other employees, including management, of the respondent. 12 Mr McIlroy and Ms St Henry had previously been employed by the respondent on or about 15 February 2005. I understand that there had been allegations by Ms St Henry of workplace bullying and sexual harassment by another employee of the respondent at that time. A number of witnesses also deposed that there had been rivalry between Mr McIlroy and that same employee at that time (affidavit of David McDonald sworn 19 October 2006) which resulted in shouting matches between them (affidavit of John Date sworn 19 October 2006). At that time, Mr McIlroy and Ms St Henry had remained in employment with the respondent until 17 June 2005 (in the case of Mr McIlroy) and 8 July 2005 (in the case of Ms St Henry). 13 Mr McIlroy and Ms St Henry were re-employed by the respondent at Blackwater Mine during the period 15 February 2006 to 10 May 2006. They were re-employed following discussions with Mr Bradley Marshall, who was at all relevant times the managing director of the respondent. Usually decisions concerning employment of staff of the respondent are made by Ms Melody Burey, the project manager of the respondent. I understand however that Ms Burey was on leave at the time that the employees were re-employed. 14 The employees each deposed that, whilst being offered employment by Mr Bradley Marshall, they were told that they were not to "cause any trouble" for 12 months. 15 It is common ground that their employment was terminated on 10 May 2006 during separate meetings held with Ms Burey. At those separate meetings with each of the employees, Ms Burey handed Mr McIlroy and Ms St Henry letters in identical terms terminating their employment. Unfortunately, CE Marshall and Sons shall not be seeking to extend this offer and shall terminate your employment on the Monday, 15 May 2006, as explained to you by myself and Production Superintendent, Pete Beddows. I would like to thankyou for your efforts during your time with CE Marshall and Sons and wish you well in your future employment endeavours. Evidence was given that this action was in breach of directions to employees, due to possible damage which could result to tyres and in the context of a worldwide tyre shortage for such vehicles. As a result of this incident, Ms St Henry received a one-shift suspension. Ms St Henry deposed that, although she did not believe the incident was her fault, she accepted this suspension. I understand that a consequence of a suspension is a loss of income for the employee. 19 On 2 May 2006 when Ms St Henry was notified of her one-shift suspension, Mr McIlroy deposed that he was informed by Mr Mal Lilly of Ms St Henry's suspension. There is some contention as to what happened next. Mr McIlroy deposed that he immediately returned to the go-line but that he did not drive the truck in an erratic or dangerous manner or at an excessive speed; and that in his view, based on his experience as a driver, it was appropriate to turn off the truck immediately as the engine had barely "warmed up". However Mr Lilly, senior shift supervisor of "D crew" whose members included both Mr McIlroy and Ms St Henry, deposed that Mr McIlroy lost his temper, drove off quickly and in top gear towards the go-line, that in his view Mr McIlroy had driven the truck at approximately 60 kilometres per hour and had caused the brakes to lock, that the truck had slid for at least 10 metres, and that Mr McIlroy had immediately switched off the ignition of the truck without allowing the engine to idle, which is a serious breach of the rules and can cause serious damage to trucks of this nature. Mr Lilly also deposed that he had exchanged heated words with Mr McIlroy about Mr McIlroy's treatment of the truck and Ms St Henry's suspension. 20 Mr Lilly prepared a case note recording the incident which was exhibited to his affidavit. I understand however that Mr McIlroy was not formally disciplined in relation to this incident. Ms St Henry deposed that she had never previously been a union member, and that both she and Mr McIlroy advised Mr Kumeroa that they were interested in becoming involved with the applicant. Mr Kumeroa gave evidence that he left the employees with the applicant's "Application for Membership" forms on 9 March 2006 (TS 8 Feb 2007 p 17 ll 7-10). 22 A workplace organising committee meeting of the applicant was held on or about 18 April 2006, which Mr McIlroy and Ms St Henry attended. 23 Mr McIlroy and Ms St Henry deposed that they approached workers in D crew during late April and early May 2006 to provide them with invitations (prepared by the applicant) to attend a meeting organised by the applicant to be held on 9 May 2006 where a presentation explaining the new workplace relations laws was to occur. The meeting was held on that day, with a presentation given by Mr Kumeroa. 24 On 3 May 2006 both Mr McIlroy and Ms St Henry signed "Application for Membership" forms to join the applicant. In evidence in cross-examination, Mr Kumeroa said that the employees handed the signed application forms to him at the meeting of 9 May 2006 and that the forms were processed by the applicant's head office in Brisbane on 16 May 2006 (TS 8 Feb 2007 p 17 ll 45-48). 25 There is dispute between the parties as to when Mr McIlroy and Ms St Henry became members of the applicant. As his Honour pointed out, it would not therefore have to be the "substantial" reason. (2) This section does not apply in relation to the granting of an interim injunction. 31 Simply, the effect of s 809(1) is that there is a reversal of the onus of proof where an applicant brings a claim of this nature. So, in this case where the applicant claims that the respondent terminated the employment of Mr McIlroy and Ms St Henry for a prohibited reason (namely because they were members of an industrial association and/or because as members of an industrial association they did an act for the purposes of furthering or protecting the industrial interests of the applicant, which act was both lawful and within the limits of an authority expressly conferred by the applicant under its rules) the onus is on the respondent to prove otherwise. The reversal of the onus in respect of proof of the reasons for the conduct is a recognition that "the circumstances by reason of which an employer may take action against an employee are, of necessity, peculiarly with the knowledge of the employer": Heidt v Chrysler Australia Ltd at 267. (cf recent comments of Buchanan J in Seymour v Saint-Gobain Abrasives Pty Ltd [2006] FCA 1452 at [28] ). This explanation must appear in the evidence of the person or persons who made the decision to terminate the employment of the relevant employees. Mr Hinson SC on behalf of the applicant submitted that the standard of proof in this case was the civil standard of the balance of probabilities. 37 Mr Horneman-Wren on behalf of the respondent however submitted that in fact the burden of proof was akin to the Briginshaw test ( Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336) and therefore required proof to a higher standard than a mere balance of probabilities. It means that the nature of the issue necessarily affects the process by which reasonable satisfaction is attained. When, in a civil proceeding, a question arises whether a crime has been committed, the standard of persuasion is, according to the better opinion, the same as upon other civil issues... But consistently with this opinion, weight is given to the presumption of innocence and exactness of proof is expected. In my view the issue raised by Mr Horneman-Wren may be addressed by recognising that the civil standard of proof - that is, the balance of probabilities --- is applicable as required by s 140(1) Evidence Act , however in applying the civil standard it is appropriate to take into account the issues prescribed in s 140(2). This does not mean that I am required to apply a higher standard of proof than the "mere balance of probabilities" as submitted by Counsel. It does, however, require me in this case, in applying the civil standard, to take into account the nature of the claim, the nature of the subject-matter of the proceeding, and the gravity of the matters alleged. In particular in the context of a civil remedy provision, I take into account the fact and the nature of the penalties which can be awarded against the respondent. This approach is consistent with the approach taken by Nicholson J in Maritime Union of Australia 93 FCR at 65. The duty of the court in such cases to take into account issues specified in s 140(2) has also been recognised in other Federal Court decisions including The Employment Advocate v National Union of Workers [2000] FCA 710 ; (2000) 100 FCR 454 at 464 and Hamberger v CFMEU (2000) 104 IR 45 at 49. 40 Accordingly, in my view the civil standard of balance of probabilities, prescribed by s 140(1) and (2) Evidence Act , applies in this case. At the time of termination of employment, no reasons were given by Ms Burey to the employees. The inference can be drawn that it was their union involvement which was the real reason for dismissal, because the conduct of Mr McIlroy and Ms St Henry cited by Ms Burey was not sufficiently serious to warrant dismissal. Most of this evidence was produced by witnesses for the respondent. As I have already stated, Ms Burey is the project manager for the respondent, and in this capacity she is responsible for employment-related issues including hiring employees and terminating their employment. 48 That she was the individual responsible for the decision to terminate Mr McIlroy and Ms St Henry is clear from her evidence, as well as the evidence of Mr Bradley Marshall and Mr Peter Beddow. This fact was accepted by Mr Hinson SC of Counsel for the applicant in written submissions, and in oral submissions (TS 9 Feb 2006 p 185 ll 1-7). 49 Ms Burey deposes that she reached the decision to terminate the employment of Mr McIlroy and Ms St Henry on 4 May 2006. She made this decision after checking the date of expiration of their probationary period (a date she understood to be 15 May 2006), speaking with Mr Marshall, Mr Beddow and Mr Lilly concerning matters including the incidents on 1 and 2 May 2006, and reading the employees' personnel files. 50 Ms Burey deposes that as at 4 May 2006 she did not know whether Mr McIlroy and Ms St Henry were members of any union. She further deposes that it was not until after reading their affidavits in these proceedings that she became aware that they were members of the applicant. 51 Ms Burey deposes that she was aware that on around 9 May 2006 there was going to be a union meeting to discuss the new WorkChoices Laws. She deposes that "I thought it was a good idea for people to have information about the new laws". 52 Ms Burey deposes that she was told on or about 10 May 2006 that Mr McIlroy and Ms St Henry, and other employees of CE Marshall & Sons attended the meeting. However, Ms Burey deposes that "Jim and Anita's attendance at the union meeting on 9 May 2006 had nothing to do with my decision to terminate their employment. I respect people's rights to be union members if they wish. The reasons that their employment was terminated are those that I have set out above". 53 Ms Burey further deposes that she made the decision to terminate the employment of Mr McIlroy and Ms St Henry on 4 May 2006 and prepared the letters to this effect. These letters were dated 10 May 2006 as Ms Burey had ascertained that this would be the end of their next shift, but still within the probationary period, and thus an appropriate time to advise Mr McIlroy and Ms St Henry of her decision. In cross-examination Ms Burey indicated that when typing the letters she had anticipated that Mr Beddow would be in attendance at the meetings with Mr McIlroy and Ms St Henry but on 10 May 2006 he was delayed in the field organising production and that this was explained to Mr McIlroy and Ms St Henry during their respective meetings (TS 8 Feb 2007 p 98 l 45 - p 99 l 2). This evidence is supported by Mr Beddow's response in cross-examination that he would normally be in attendance during termination of employment meetings (TS 8 Feb 2007 p 118 ll 17-35). Further for the purposes of this claim it is relevant to note that Mr Marshall made the decision to re-hire the employees in February 2006, and he was later consulted by Ms Burey in connection with her decision to terminate the employment of Mr McIlroy and Ms St Henry. I was a member for 4 or 5 years whilst I worked at Yarrabi Mine...... I respect the right of all employees to be or not to be members of a union. During this conversation Mr Beddow relayed to Ms Burey his knowledge of the incidents of 1 and 2 May 2006 involving Ms St Henry's suspension and Mr McIlroy's response. 58 However, it is clear that Mr Beddow did not have any role in the termination of Mr McIlroy and Ms St Henry (affidavit of Peter Beddow sworn 23 October 2006 and cross examination --- see TS 9 Feb 2007 p 118 ll 1-13) beyond being consulted as a courtesy by Ms Burey. Mr Beddow however gave evidence during cross-examination that he would normally be present when Ms Burey terminated an employee because he had more personal contact with employees on site than Ms Burey did (TS 9 Feb 2007 p 118 ll 17-33). 59 Further, and in any event, Mr Beddow deposes that he did not know prior to their termination that Mr McIlroy and Ms St Henry were union members. He deposes that whilst he may have known at around 9 or 10 May 2006 that Mr McIlroy and Ms St Henry had attended a union meeting, to his knowledge this did not affect the decision to terminate their employment, and in any event he understood that Ms Burey had decided several days before the union meeting occurred to terminate their employment. 61 Mr Irwin deposes that he does not recall any conversation with Mr Lalor on the evening of 10 May 2006; rather he recalled a telephone call from Mr Lalor on 11 May 2006. It was not suggested by either party in cross-examination that there were in fact two conversations at or about this time. In my view no issue turned on whether the conversation occurred on 10 May or 11 May 2006. 62 Mr Irwin deposes that he was unaware that the employment of Mr McIlroy and Ms St Henry had been terminated until Mr Lalor informed him during the course of their conversation on 10 May or 11 May 2006. Mr Irwin deposes that he did not say that Mr McIlroy and Ms St Henry "have gone because of the Union meeting". He deposes that at that time he did not know that Mr McIlroy and Ms St Henry had gone to the meeting, that they had handed out invitations, that there had been a union meeting on 9 May 2006, or that Mr McIlroy and Ms St Henry were members of a union. Mr Irwin deposes that he can not recall the details of the conversation but that he would have asked Mr Lalor a number of questions about the meeting because he "was keen to find out more about what I had just heard". Further, Mr Lilly deposes that he asked Mr John Leeson, one of the operators of D crew employed by the respondent, about circumstances in which his name was mentioned at the union meeting of 9 May 2006. However he deposes that he did not ask Mr Leeson whether invitations to the union meeting were handed out by Mr McIlroy and Ms St Henry. Further, Mr Lilly deposes that he was not involved in the decision to terminate the employment of Mr McIlroy and Ms St Henry, and that he was unaware that their employment had been terminated until he came into work on 11 May 2006. Mr Date also gave evidence as to events during the time the employees were employed by the respondent in 2005. Mr Date deposed as to the incident where Ms St Henry backed her truck over a 750 mm rock, and his decision to suspend her for one shift following a meeting with Mr Lilly, Ms St Henry and Mr David McDonald on 2 May 2006. Further, he deposed as to a later interchange with Mr McIlroy following Ms St Henry's suspension, where he said that Mr McIlroy was "fiery", "yelling" and "abusing" him. 65 Mr Date deposed that he was not involved in the decision to terminate the employment of either Mr McIlroy or Ms St Henry, however during cross-examination he said that he spoke to Mr Beddow about the heated discussion he had had with Mr McIlroy (TS 9 Feb 2007 p 142 ll 25-26). He also deposed as to attending a meeting on 2 May 2006 between Ms St Henry, Mr Lilly and Mr Date as an independent person where the incident involving the 750 mm rock was discussed, and also driving Mr McIlroy and Ms St Henry to Ms Burey's office at her request on 10 May 2006. Mr McDonald however was not told the reason for the meetings between Ms Burey and the employees. In particular, I note their evidence concerning the incidents on 1 and 2 May 2006, and their interest in and application to join the applicant. I note further that no explanation was provided to them by Ms Burey, or anyone else involved in management of the respondent, for termination of their employment on 10 May 2006. Mr Lalor deposes that he telephoned Mr Irwin and asked him "what had happened" to Mr McIlroy and Ms St Henry. Mr Leeson deposed that Mr Lilly expressed an interest in what had been said about himself (Mr Lilly) and the respondent at the union meeting on 9 May 2006, and whether Mr McIlroy and Ms St Henry had given Mr Leeson the invitation to the union meeting. After considering the evidence both affidavit and oral, I am satisfied that Mr McIlroy and Ms St Henry were not dismissed for prohibited reasons within the meaning of s 793(1)(a) and (o) of the Act . It was common ground between the parties that the decision-maker in the respondent in terminating the employment of Mr McIlroy and Ms St Henry was Ms Burey. She had the role of, and responsibility for, hiring and firing staff. In making her decision she consulted Mr Marshall and Mr Beddow, but the primary decision was hers. 2. With respect to Mr McIlroy and Ms St Henry, from the evidence both in affidavit form and emerging in cross-examination, I am of the view that the reason that their employment was terminated was because Ms Burey took the view that they were "trouble" in the context of the performance of their duties on the site and in view of their history of employment with the respondent, and it was preferable to terminate the employment of Mr McIlroy and Ms St Henry before the expiration of the probation period. I make this finding with no comment as to the fairness or otherwise to either Mr McIlroy or Ms St Henry of the approach taken by Ms Burey or the respondent in so terminating their employment. It was common ground that the tenor of Mr Marshall's comments to Mr McIlroy and Ms St Henry on re-hiring them was that the respondent required the employees not to cause trouble on the worksite during the next 12 months. In my view the clear inference could be drawn that, from the perspective of the respondent and its decision-makers (in this case, Mr Marshall), Mr McIlroy and Ms St Henry were potentially troublesome employees. • It is clear from the evidence of Ms Burey that she considered Mr McIlroy and Ms St Henry to be a "package" so far as their employment relationship with the respondent was concerned (TS 9 Feb 2007 p 92 ll 41-43). I note that the evidence indicates that Mr McIlroy and Ms St Henry had previously left the employment of the respondent at a similar time; they were re-hired together by Mr Marshall; they both worked in D crew; it was well-known that they were partners; and that it was, for example, appropriate for Mr McIlroy to take time off work to drive Ms St Henry home after her suspension. It was also clear from Ms Burey's evidence, that it was natural for her to either retain them as employees together, or to terminate both employees at the same time, rather than to differentiate between them. • In my view the clear inference can be drawn that, although the conduct of Ms St Henry in backing the truck over a 750 mm rock was the subject of a suspension, it was the reaction of Mr McIlroy to the suspension which was the key factor in Ms Burey's decision that the employment of Mr McIlroy (and consequentially, of Ms St Henry), should be terminated. I note in particular evidence of Mr Lilly in relation to his view of Mr McIlroy's treatment of the truck and his subsequent verbal exchange with Mr McIlroy, and evidence of Mr Date as to his verbal exchange with Mr McIlroy. I note that Mr Lilly prepared a case note referring to the incident involving Mr McIlroy and the truck, which Ms Burey deposed that she had read. Further, although no direct evidence was given on this point, it was clear during the course of the hearing that the actions of individual staff members of the respondent were the subject of interest and conversation by other staff members. In this case it is clear that following the incidents of 1 and 2 May 2006, Mr Date had spoken to Mr Beddow concerning Mr Date's conversation with Mr McIlroy, and Mr Beddow subsequently spoke to Ms Burey and Mr Marshall on 4 May 2006. It appears that Ms Burey had therefore been informed of the incidents of 1 and 2 May 2006 concerning Ms St Henry and Mr McIlroy. • Ms Burey discussed the termination of the employees with Mr Beddow and also Mr Marshall who had originally hired them. It was clear from the evidence that Mr Beddow and Mr Marshall knew the employees, and had been aware of their previous experiences of employment with the respondent during 2005. I am also satisfied that Ms Burey had made up her mind on 4 May 2006 to terminate the employment of the employees. I find that Ms Burey was a credible witness. • Her evidence that she thought it fair to allow the employees to complete their next shift, which finished on 10 May 2006, and then to terminate them as still permitted by the certified agreement within the probation period. • The contents of her letters of termination, which she said she had prepared on 4 May 2006, and which referred to the discussions with her and "Pete Beddow". It is common ground that Mr Beddow was not present at the meeting between Ms Burey and the employees. However, as I noted earlier in this judgment, Mr Beddow during cross-examination gave evidence that it would have been usual for him to have been present at such a meeting, because he was better acquainted with site staff of the respondent, including Mr McIlroy and Ms St Henry, than Ms Burey was. The letters of termination referring to the presence of Mr Beddow are consistent with Ms Burey's evidence that she had prepared the letters several days prior to the meetings with Mr McIlroy and Ms St Henry, in the expectation that Mr Beddow would be present at those meetings. Assuming for the moment, without considering the issue, that Mr McIlroy and Ms St Henry were members of the applicant, I am satisfied that neither their membership of the applicant as an industrial organisation, nor any action performed by Mr McIlroy or Ms St Henry for the purposes of furthering or protecting the industrial interests of the applicant (including any actions concerning meetings called by the applicant), were in any way reasons operative to the termination of their employment. The evidence is clear that any union membership or activities of Mr McIlroy or Ms St Henry were simply not issues in relation to the termination of their employment in the mind of Ms Burey as the decision-maker. I also note Ms Burey's evidence that she had no objection to a presentation concerning the new Workplace Relations laws. As I indicated earlier, I find Ms Burey a credible witness. • Evidence given by Mr Lilly and Mr Leeson is, at best, of peripheral relevance. With respect, this evidence is in the nature of workplace gossip and of little weight in the context of this claim. I note Mr Lilly's evidence that he had no knowledge of any involvement by Mr McIlroy or Ms St Henry in organising or participating in the union meeting, and accordingly it was unlikely that he would have asked Mr Leeson a question whether invitations had been distributed by Mr McIlroy or Ms St Henry. However even if the version of the conversation deposed to by Mr Leeson is accurate, in my view it is more likely that Mr Lilly was far more concerned that he had personally been the subject of criticism at the meeting. Further, I note that Mr Lilly was not a decision-maker in the respondent concerning the termination of the employment of Mr McIlroy and Ms St Henry. I also note, and accept, Mr Lilly's evidence that he was unaware that Mr McIlroy and Ms St Henry had ceased working for the respondent until he came to work on 11 May 2006. • There is clear inconsistency in the evidence of Mr Irwin and Mr Lalor as to their conversation, in particular where Mr Lalor deposed that Mr Irwin had said that the employees' employment had been terminated "because of the Union meeting" and "because they handed out invitations to the meeting and they were also causing trouble at the hardstand". Mr Irwin denied that he had attributed the termination of employment of the employees to their union activities, and deposed that he was unaware that the employees had ceased employment with the respondent until informed by Mr Lalor. In my view, with respect, this evidence is in the nature of workplace gossip and speculation, and is of little weight in the context of this claim. Even if Mr Lalor's version of the conversation is accurate, in my view it is more likely that Mr Irwin was simply speculating as to the reasons for termination of Mr McIlroy and Ms St Henry, from a position of ignorance. It is clear that Mr Irwin was not in any sense a decision-maker in this case, nor is there any evidence that he was privy to the processes by which the decision to terminate the employment of Mr McIlroy and Ms St Henry was made. I accept Mr Irwin's evidence that he was unaware that Mr McIlroy and Ms St Henry had been terminated until he was so informed by Mr Lalor. This is consistent with the evidence of Mr McDonald and Mr Lilly, both of whom also deposed that they were unaware of the termination of the employment of the employees until after the event. Finally, it is also consistent with the fact that the Ms Burey was the decision-maker, and that, with the possible exceptions of Mr Marshall and Mr Beddow she had not communicated her decision to anyone other than the employees prior to 10 May 2006. Even if Mr McIlroy and Ms St Henry were members of the applicant at the relevant time (and I make no finding with respect to this issue) I am satisfied on the balance of probabilities, taking into account factors including the nature of the action, the respondent's defence, the nature of the subject-matter of the proceeding and the gravity of the matters alleged (including the fact that the claim involves breach of a civil remedy provision), that Mr McIlroy and Ms St Henry were not dismissed by the respondent for prohibited reasons in the meaning of s 793(1)(a) and (o) of the Act . I am satisfied that the presumption that the termination of the employment of Mr McIlroy and Ms St Henry was for a prohibited reason is rebutted by the credible evidence of Ms Burey and Mr Marshall as to the actual reasons for termination. Whether those reasons were "fair" reasons is not relevant --- the claim of the applicant as pleaded does not require me to consider the fairness or reasonableness of the conduct of the respondent (cf similar comments of Boon JR in Anderson v Edith Cowan University [1999] FCA 1802 at 104). 74 As a result of this finding, it is unnecessary for me to consider whether Mr McIlroy and Ms St Henry were in fact members of the applicant at the relevant times. The application be dismissed. I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | workplace relations act 1996 (cth) part 16 whether employees dismissed from employment for a prohibited reason, specifically membership of and/or activities as members of industrial association whether actually members of the relevant industrial association at the time onus of proof standard of proof reasons of the decision-maker for termination of the employment of the employees whether decision maker was aware of the employees' involvement with the industrial association. workplace relations |
For the purposes of this application for leave, I will proceed on the basis that the Company has available to it potential claims against the first respondents ('the Receivers') for contravention of the duties imposed upon officers of a corporation by s 180 of the Act, for breach of the obligation imposed upon a controller of property of a corporation by s 420A of the Act, and for breach of an equitable duty to act in good faith. Other claims are made which may or may not be properly maintained as a matter of law (at least as currently pleaded), but it is apparent that if the applicants cannot succeed in respect of the claims referred to above, then they could not otherwise be successful in respect of other claims on the evidence sought to be relied upon in this application. The basis of the claim against the second respondent ('the Bank') is that the Bank is liable for the defaults of the Receivers because the Receivers were acting as agents of the Bank. 2 Although the applicants do not expressly state so in their application, it seems clear that the order sought is the grant of leave nunc pro tunc from at least the date proceedings were filed on 20 February 2007. Whilst the position as to the relevant limitation period is not entirely clear (both as a matter of law and fact), the applicants want to secure such leave so that no limitation defence can be raised by the respondents. I will proceed on the basis that the expiration of any relevant limitation period is six years after 21 February 2001, and that if leave is not granted nunc pro tunc , the applicants will at least be at risk of a limitation defence being raised by the respondents. The Company owned and operated a sugar mill in North Queensland. Furthermore, in early 2001, the Company's mill needed urgent and expensive repairs in order to operate for the upcoming season. 5 Ultimately, the Receivers were appointed on 18 January 2001 by the Bank. 6 On 21 February 2001 the Receivers entered into an agreement with Bundaberg Sugar Limited ('Bundaberg') for the sale of what has been broadly described above as the Company's milling assets for the sum of $15.1 million ('the Contract'). The Contract settled on 9 March 2001. The Warrami Land was later sold for approximately $5 million. 7 The last of the Company's directors resigned on 20 February 2004 and it has not had any directors since that time. 8 On 24 September 2004, the Receivers ceased to act in that capacity. I shall hereinafter refer to the applicants other than the Company as "the applicants". No leave, as was required, was sought by the applicants prior to instituting this proceeding. 10 The Receivers submitted that the applicants had no right at general law to bring proceedings on behalf of the Company, nor did they have a statutory right to do so under s 237, given that leave had not been granted to bring proceedings on behalf of the Company. The applicants rely solely upon the statutory right, and seek leave under s 237 of the Act. No right at general law was asserted. 11 As a threshold matter, there was some debate before me as to whether all of the named applicants had standing to bring the application on behalf of or in the name of the Company. 12 Section 236(1)(a) of the Act lists the persons entitled to apply to the Court for leave to bring proceedings, which includes a member, former member, or a person entitled to be registered as a member, of the Company. 13 There are 141 applicants named in the originating process, however the respondents submitted that only 31 of the applicants were proven to be current or former members of the Company, according to a company extract from ASIC's records. 14 The applicants could not produce the original share register, but did rely upon an extract from ASIC's records which provided that 283 "A" class shares and 3,900,016 "B" class shares have been issued. The extract only lists 31 of the applicants as current or former shareholders of the Company, whom the respondents accepted as appropriate applicants. However, it seems that more shareholders exist as the extract does not seem to identify all shareholders by name. 15 In this regard, the applicants sought to rely upon what purported to be an electronic copy of the share register obtained by a shareholder in the Company in about February 2007 from the former Company secretary. 16 Whether this application is interlocutory or not, this evidence is inadmissible. It is clearly hearsay and no relevant identification has been made as to the source of the information contained therein, even if reliance could be placed upon s 75 of the Evidence Act 1995 (Cth) (' Evidence Act '). 17 I would not exercise my discretion under s 190 of the Evidence Act in order to admit the electronic copy into evidence, as the evidence is of so little probative value to actually prove that the people listed are in fact members or former members, which in my view is an important threshold matter in an application of this type. I do not accept that it would cause unnecessary expense or delay to prove the register of members, a matter in genuine dispute, which is fundamental to this Court's jurisdiction to consider the application for leave. No attempt was made to call the former Company secretary, and it has not been demonstrated that it could not be reasonably practicable to call him to give evidence to provide the details of the electronic copy of the share register, its source, or how it was created. Nor has any attempt been made to locate the share register from the Supreme Court of Queensland, which is where it has been deposed to be held. 18 To the extent that reliance is placed on s 64(2) of the Evidence Act , even if it were applicable to this situation, for the reasons given above no basis has been provided for the reception of hearsay evidence of this nature. 19 In any event, even if reliance could be placed upon the electronic copy of the share register, I am not satisfied that, in circumstances where the evidence is uncertain and incomplete on this question, it proves on the balance of probabilities that the persons referred to in the document are current or former shareholders of the Company. Nor do I consider the proof required is improved on the basis of the applicants merely informing their solicitor, Mr Maitland, of their status, and he providing such hearsay evidence to the Court. 20 Nonetheless, I need only be satisfied for the purposes of standing that one applicant is a former or current member of the Company in order to grant leave under s 237. I therefore base my decision upon the Company extract from ASIC's records and accept that the requisite standing has been satisfied in respect of those 31 applicants named therein. Of course, any relief to be granted in this application could only be granted in favour of those 31 applicants. This question arose in the context of the operation of s 75 of the Evidence Act . A number of authorities were referred to, but it is important to recall that care must be taken before applying cases which are not concerned with the meaning of the term "interlocutory" for the purposes of the Evidence Act , but rather with the meaning of the term in the context of statutory provisions concerning leave to appeal. It is not difficult to find good reason for allowing relaxation of the hearsay rule in a narrower category of cases than that in which the right of appeal is truncated by a requirement for leave. The latter requirement merely places the parties in the hands of the Court. Relaxation of the hearsay rule may substantially affect the outcome of the proceedings or the way in which they are conducted. However, I am of the tentative view that for the purposes of s 75 of the Evidence Act the application should be regarded as interlocutory. Can leave be granted nunc pro tunc ? 25 The answer to this question depends upon whether ss 236 and 237 in their terms mandate that leave be granted before the proceeding is instituted. 26 In order to deal with this matter it is necessary to set out ss 236 and 237. On such application, the court must grant leave if the criteria set out in s 237(2) are satisfied. 30 Part 2F.1A was introduced into the Corporations Law , now the Act, by the Corporate Law Economic Reform Program Act 1999 (Cth) ('the CLERP Act'). Part 2F.1A commenced on 13 March 2000. 31 The purpose of the amending legislation was to introduce a new regime for the bringing of derivative proceedings. The Explanatory Memorandum refers to a number of reports which recommended a statutory derivative action for various reasons, such as "to reduce the cost to the members and directors of a company of establishing and enforcing their relationship with one another". The statutory derivative action was introduced to remedy certain difficulties, which were set out at [6.15] of the Explanatory Memorandum, in bringing a derivative action at general law under the exceptions to the rule in Foss v Harbottle (1843) 2 Hare 461. Proceedings could be commenced in respect of wrongs done to the company and the company would benefit from successful actions. In this regard, a statutory derivative action has the potential to remove some of the regulatory burden from ASIC by making it easier for investors themselves to protect the interests of the company. It seems, therefore, that the reason for the notice period is to allow the company time to address the applicant's concerns prior to the hearing date, and failure to do so may support a conclusion by the court that it is improbable that the company would itself take proceedings. 36 Section 241 also provides for the general powers of the court to supervise proceedings. As stated at [6.64] of the Explanatory Memorandum, the principal purpose of this provision is to allow the court to ensure a company's money is being "expended in a reasonable manner and whether a complaint constitutes a good cause of action". 37 The applicants submitted that the Court has jurisdiction to entertain this application for leave nunc pro tunc notwithstanding that proceedings were commenced without leave. The applicants relied upon the decision of Re Testro Bros Consolidated Ltd [1965] VR 18, amongst others, in support of the proposition that the absence of leave is not a matter going to jurisdiction and that rather it is an irregularity capable of being corrected by the Court. 41 More recently, the High Court of Australia considered the effect of non-compliance with statutory requirements in the decisions of Emanuele v Australian Securities Commission [1997] HCA 20 ; (1997) 188 CLR 114 and Berowra Holdings Pty Ltd v Gordon [2006] HCA 32 ; (2006) 225 CLR 364. 42 In Emanuele [1997] HCA 20 ; 188 CLR 114, the Australian Securities Commission had failed to obtain leave before applying for a winding up order under the Corporations Law . The court held by majority that the absence of leave was a defect or irregularity capable of correction by the court. The majority approved the observations of Sholl J in Re Testro Bros [1965] VR 18 (at 125 per Dawson J; at 129 per Toohey J; at 153 per Kirby J). 43 For the majority of the court, the question was whether the relevant provision conditioned the court's jurisdiction. Jurisdiction is conferred on the Federal Court by s 459A of the Corporations Law in conjunction with s 42(3) of the Corporations (South Australia) Act 1990 (SA). The failure to obtain leave was a mere defect or irregularity in the exercise of that jurisdiction. It did not affect the validity of the order made, although it may have provided a ground for staying it or setting it aside. In that context, his Honour observed that it would not promote the objectives of the legislation if the provision in question was construed as requiring strict compliance (at 155). This was so, despite the emphatic words of the section, which, if taken at face value, appeared to make leave an absolute strict requirement. In particular s 459P(2) provided that an application "may only be made with the leave of the Court", and s 459P(3) provided that the Court may give leave if satisfied there is a prima facie case, "but not otherwise". 46 In Berowra [2006] HCA 32 ; 225 CLR 364, the provision under consideration prohibited the commencement of proceedings within a specified time period. In breach of that provision, proceedings were commenced and an issue arose as to whether the proceedings so commenced were a nullity. This is because of the drastic consequences that can follow conclusions of nullity and voidness in the law. It is not a matter of characterising the provisions of ss 236 and 237 as procedural or substantive (which may be relevant in another context (see eg Advent Investors Pty Ltd v Goldhirsch (2001) 37 ACSR 529 per Warren J)), but the question is whether the provisions condition the court's jurisdiction. 49 The actual provisions considered in Emanuele [1997] HCA 20 ; 188 CLR 114 are not materially different to those with which I am concerned, and in my view the analysis of the High Court in that decision is equally applicable to ss 236 and 237 of the Act. The fact that ss 236 and 237 of the Act were not enacted against the background of a well-known body of case law which recognised the court's power to grant leave nunc pro tunc is irrelevant. The question is ultimately one of construction of ss 236 and 237, even accepting they create a new regime. In both the context of s 459P, as considered in Emanuele [1997] HCA 20 ; 188 CLR 114, and ss 236 and 237 there is envisaged the exercise of the court's supervisory jurisdiction in advance of the commencement of proceedings. Further, I do not consider that the mandatory terms of s 237(2) are sufficiently different to the requirement of s 459P(3), the latter being that the court be satisfied that there is a prima facie case that the company is insolvent. Both provisions have requirements which can be equally considered before or after the commencement of proceedings. 50 In a similar way, the analysis undertaken in Berowra [2006] HCA 32 ; 225 CLR 364 is usefully applicable to my task of construing ss 236 and 237. Sections 236 and 237 are silent as to the consequences of commencing a proceeding without leave. There is no warrant to conclude that parliament intended that such proceedings be beyond the court's jurisdiction, as I can find no indication, strong or otherwise, to so conclude. It cannot be inferred that in the absence of parliament expressly stating that leave can be granted nunc pro tunc , the court does not have jurisdiction. This would be inconsistent with the wealth of authorities which provide for the grant of leave nunc pro tunc in respect of other provisions. More importantly however, by reference to the stated purposes of the legislation in the Explanatory Memorandum, it cannot be inferred that parliament contemplated that a company may be denied the benefit of the institution of proceedings where there is a proper basis to otherwise institute the proceedings, simply because proceedings were issued without leave. The express intention of parliament in introducing the statutory derivative action was to allow a simplified process for shareholders to appropriately bring valid causes of action on behalf of a company, which it would not do in its own right. 51 Further, I do not consider that, in expressly allowing for ex parte applications, it may be inferred that the legislation does not authorise the prior issue of the proceeding with leave to follow. True it is that the stated reasons for the requirement of leave are to allow the court to supervise the expenditure of company money, to prevent abuse of proceedings, and to guard against potentially "vexatious or unmeritorious" litigation. However, this purpose would not necessarily be defeated if leave were granted nunc pro tunc , as the criteria for the bringing of the proceedings still need to be considered to allow the matter to proceed. To permit an application to be made ex parte shows that parliament envisaged that in certain circumstances a party may need to approach the court urgently and without notice to interested persons, and permits the court to hear that application accordingly. By so permitting such an application to be made without notice and ex parte does not mean that it is a pre-condition to the jurisdiction of the court that leave be brought prior to the institution of proceedings in all circumstances. 52 In construing the provisions of legislation, it is always necessary to have cognisance of their context and the purpose the provisions are intended to serve. Sections 236 and 237 in themselves do not create the relevant causes of action that are sought to be maintained on behalf of the Company in the proceedings. Sections 236 and 237 identify the persons who may make or pursue a claim on behalf of a company and the requirements that must be met before the claims may be advanced. The court's jurisdiction is found in the substantive provisions of the Act or common law which empower it to adjudicate claims for breach of statutory and other duties. It may be inferred that parliament contemplated that the court having jurisdiction to hear the application, its general powers of correction would be available if faced with circumstances such as those arising in this application, or where there was inadvertence or oversight by a party in obtaining the necessary leave. 53 There was no contention that the court would not have the power to make the appropriate correction if the court had the appropriate jurisdiction. The proceeding having now been filed with the Court has enlivened the jurisdiction of the Court, and the Court can thus proceed to consider the issues raised for its determination: see Johnston v Vintage Developments Pty Ltd [2006] FCAFC 171. There is a reason for the tendency in the series of cases cited by McHugh JA in Woods v Bate [(1986) 7 NSWLR 560 at 567] and in other cases to like effect, for the reluctance of courts in recent times to invalidate acts done pursuant to a statutory provision because of a failure to comply with a prior procedural condition. Courts today are less patient with meritless technicalities. They recognise the inconvenience that can attend an overly strict requirement of conformity to procedural pre-conditions. In the morass of modern legislation, it is easy enough, even for skilled and diligent legal practitioners (still more lay persons who must conform to the law) to slip in complying with statutory requirements. The Law is a case in point. Its complexity and detail is such that it has necessitated, within a short time of its enactment, the passage of the First Corporate Law Simplification Act 1995 (Cth). A number of further stages of simplification are promised. An undue rigidity in insisting upon strict compliance with all of the procedural requirements of the Law could become a mask for injustice and a shield for wrong-doing. In my view it clearly does not. 56 I note that there have been a number of cases in which leave to proceed under s 237 has been granted nunc pro tunc : see McLean v Lake Como Venture Pty Ltd [2004] 2 Qd R 280; RTP Holdings Pty Ltd v Roberts (2000) 36 ACSR 170; and Maher v Honeysett & Maher Electrical Contractors [2005] NSWSC 859. I accept that in these cases no objection was taken to the grant of leave nunc pro tunc . It seems to me, having analysed the position, the grant of leave nunc pro tunc would be an available order to make in appropriate circumstances. The general principle is that the court will enter a decree nunc pro tunc if it is satisfied that it is only doing now what it would have done then: see Emanuele 188 CLR at 132 per Toohey J citing Donne v Lewis (1805) 32 ER 1221 at 1222. 58 To make the applicants reissue proceedings would add unnecessary expense and time. To take a strict approach would frustrate the stated benefits of the statutory derivative action, which include "making it easier for investors to protect the interests of the company", and reducing "the cost to the members and directors of a company of establishing and enforcing their relationship with one another". 59 In addition, given the possibility that the causes of action will be statute-barred if one takes the view that leave should not be granted nunc pro tunc , this will deny the Company any potentially good cause of action. In those circumstances incurable prejudice may flow to the Company. On the other hand, the respondents merely seek to protect a forensic windfall, which is not a proper basis for denying leave nunc pro tunc : see Karam v ANZ (2000) 34 ACSR 545 per Santow J. Nowhere does any respondent indicate any other relevant prejudice arising from granting leave nunc pro tunc , if it were otherwise appropriate to do so. On such application, the court must grant leave if the criteria set out in s 237(2) are satisfied. The prevailing view is that failure to satisfy any one of these criteria means that leave must be refused: see Jeans v Deangrove Pty Ltd [2001] NSWSC 84 at [9] per Santow J; Goozee v Graphic World Holdings Pty Ltd [2002] NSWSC 640 ; (2002) 42 ACSR 534 at [27] per Barrett J; Herbert v Redemption Investments Ltd [2002] QSC 340 at [25] per Mackenzie J; Maher v Honeysett [2005] NSWSC 859 at [12] per Brereton J; compare Fiduciary Ltd v Morningstar Research Pty Ltd (2005) 53 ACSR 732 at [16], where Austin J found it unnecessary to decide the point. 61 The applicants bear the onus of satisfying the Court, on the balance of probabilities, that the criteria identified in s 237(2) have been met: Swansson v RA Pratt Properties Pty Ltd (2002) 42 ACSR 313 at [24]-[26] per Palmer J; Fiduciary v Morningstar 53 ACSR at [15] per Austin J; Re Varsity Queensland Pty Ltd [2006] QSC 356 at [9] per Mullins J. • The Company holds no assets as they were sold by the Receivers. I do not consider it incumbent upon the applicants in these circumstances to have sought to have the Company consider for itself the position, or to seek to convene a general meeting with a view to appointing directors. On the basis of the present position I am satisfied that this first criterion is satisfied. 65 The applicants submitted that they satisfied this criterion, and relied upon the fact that they have joined themselves as parties and that they form a substantial number of the shareholders. The applicants also pointed to the absence of any suggestion that any of them was acting otherwise than in good faith. The applicants indicated that they will indemnify the Company for its costs of the proceeding and any adverse costs order against the Company arising out of the proceeding. It was also submitted by the applicants that, whether or not the expert evidence of the valuation of the Company's milling assets sought to be adduced in this application is admitted into evidence (there being objection to its admissibility), the mere fact that the valuation has been received by the applicants and indicated on its face that the sale of the milling assets was at a substantial undervalue supported the argument that the applicants were acting in good faith. 66 It must be noted, however, if leave be granted, it could only be granted in relation to 31 of the applicants given the status of the evidence on standing. However, I do not consider that this aspect necessarily diminishes the applicants' argument that they have brought these proceedings in good faith. 67 I accept that more than "bald assertion" is required in order to establish an applicant's honest belief: Swansson 42 ACSR at [36] per Palmer J; Fiduciary Ltd 53 ACSR at [22] per Austin J. In fact, in the present case no applicant has deposed that he or she honestly believes that a good cause of action exists and has a reasonable prospect of success. The applicants' solicitor, Mr Maitland, has not sought to give hearsay evidence as to the existence of such an honest belief. 68 Whether or not good faith may be "relatively easy" to demonstrate (see Swansson 42 ACSR at [38]), there must be some positive evidence before the Court to show the applicants are acting in good faith. The fact that 31 shareholders seek to recover monetary compensation is not enough for the burden to be satisfied as to the good faith requirement of s 237. I do not think it is a sufficient answer for the applicants to say that there has not been any suggestion that any of them is acting otherwise than in good faith. The onus is upon the applicants to satisfy the Court that the applicants are acting in good faith. 69 However, in my view the onus has been discharged. It is not a requirement that the applicants depose to their belief; all that is required is that the Court be satisfied that the applicants are acting in good faith. The fact that the applicants are willing, as a condition of leave, to indemnify the Company for costs and any adverse costs order, that there is no suggestion of any collateral purpose, that the 31 applicants properly identified as shareholders constitute more than a token shareholding, and in any event if they are successful that the value of the shares of each such applicant (and other shareholders) will increase, is sufficient to demonstrate good faith. I do not rely on the mere existence of the expert reports sought to be adduced into evidence relating to undervalue for the purposes of my conclusion on this aspect. In particular, the applicants submitted that the respondents will be able to meet any judgment ordered against them, and as such, there will be a practical benefit to the Company from the proceeding. 71 However, the respondents submitted that more needs to be shown. In this respect, s 237(2) differs significantly from its counterpart in the Canadian legislation, which requires the Court to be satisfied that the proposed derivative action "appears to be" in the interests of the company, and from s 165(3) of the New Zealand Act which requires that the Court "have regard to ... the interests of the company". These provisions seem to have led the Courts of those countries to the view that the best interests of a company need be considered only in a prima facie way: see eg Re Bellman and Western Approaches Ltd (1981) 130 DLR (3d) 193, at 201; Vrij v Boyle (1995) 3 NZLR 763, at 765; Techflow (NZ) Ltd v Techflow Pty Ltd (1996) 7 NZCLC 261,138. It requires the applicant to establish, on the balance of probabilities, a fact which can only be determined by taking into account all of the relevant circumstances. The applicants have accepted that they will bear the costs of the proceedings if unsuccessful. This puts the balance of the consideration of what is in the best interests of the Company in favour of the applicants. 74 I was concerned that whether the applicants could sufficiently demonstrate that the Company would be entitled to some monetary compensation, and not just nominal damages, could impact upon this criterion. After all, if there were no monetary advantage to the Company even if successful, this would need to be considered in the context of determining whether the proceedings would be in the best interests of the Company. In the course of submissions a great deal of time was spent on the issue of whether or not the applicants proved that the sale was for an undervalue. Objections were made to evidence (including expert evidence) sought to be adduced by the applicants on this issue. 75 I have come to the conclusion that it is unnecessary to consider the evidence objected to for the purposes of this application, both in relation to the criterion of the best interests of the Company and whether there is a serious question to be tried. I am satisfied that there is sufficient evidence, which is not objected to, demonstrating that there is a serious question to be tried (which impacts upon my consideration of the best interests of the Company) that there was a sale at undervalue at least in respect of the sale of the Company's shares in sugar industry-related companies. The evidence is that consideration of $500,007 was paid by Bundaberg for the whole of the shares owned by the Company in all of its investment companies. However, the interim STL report for 2000-2001 and covering letter dated 16 February 2001 sent to all shareholders of STL showed that the net tangible value of each share in STL was $1.06 per share and that STL expected to declare and pay a dividend for the financial year ending 30 June 2001. The Company held 4,360,025 "M" class shares in STL, and the value of the 4,360,025 shares held by the Company was $4,621,626.50 based on net tangible asset backing of $1.06 per share. Neither respondent has introduced any evidence that would diminish the effect of this evidence giving rise to a serious question to be tried on this issue for the purposes of this application. 76 Therefore, looking then to the balance to be struck between any prejudice to the Company if it were unsuccessful and the potential advantage to be gained indirectly for its shareholders if successful, I am of the view that the proposed action would be in the best interests of the Company if there be otherwise a serious question to be tried in relation to the potential causes of action. 78 This requirement may be equated with that which applies on an application for an interlocutory injunction: Swansson 42 ACSR at [25] per Palmer J; Goozee 42 ACSR at [32]-[32] per Barrett J; Ehsman v Nutectime International Pty Ltd (2006) 58 ACSR 705 at [59] per Austin J. 79 The High Court of Australia recently revisited the question of applications for interlocutory injunctions in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 (see especially at [19] per Gleeson CJ and Crennan J, and at [65]-[72] per Gummow and Hayne JJ). The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted. (Emphasis added). The limited nature of that question will often enable the court to avoid making determinations on contested questions of fact. First, the application must be supported by evidence. I do not accept, with respect, that an "indication of the evidence" without actual evidence is sufficient (cf Re Varsity Queensland Ltd (2006) 60 ACSR 366 at [10] per Mullins J). 82 Secondly, the respondents have chosen not to rely upon any evidence as to the merits of the application. Whilst I may draw certain inferences from the failure of the respondents to provide evidence, the applicants must nevertheless satisfy each of the criteria on the balance of probabilities. The failure of the respondents to provide evidence cannot fill gaps in any necessary evidence of the applicants. However, where certain inferences are open, and the respondents have not led any evidence to rebut such inferences, I may be more confident that the inference should be made. 83 Thirdly, as I have said, I am proceeding on the basis that the applicants have available potential claims against the Receivers under ss 180 and 420A of the Act and on the basis of an equitable duty in favour of the Company. As I observed in Gomez v State Bank of NSW Ltd [2001] FCA 1059 at [10] , that duty is a duty to act in good faith, without wilfully or recklessly sacrificing the interests of the mortgagor. The principle underlying the duty is that of 'unconscionability' (Hawkesbury Valley Developments Pty Ltd v Custom Credit Corporation Ltd (1995) NSW Conv R 55-731 per McLelland CJ in Eq.). The duty is not to be considered in some mechanical way, but the whole of the mortgagee's conduct with respect to the sale is to be considered. The mortgagee may, up to a point, act solely in its own interests, but it must also act conscionably towards the mortgagor and those claiming under the mortgagor. Furthermore, to establish breach of the duty, a borrower will need to establish a mortgagee so failed "to take reasonable steps to obtain a proper price for the properties that it was guilty of unconscionable conduct" (at [47]). 86 It may be that s 420A of the Act imposes a higher standard of duty on receivers (see O'Donovan J, Company Receivers and Administrators (Lawbook Company) at [11.50]), but I need not investigate whether this is so. Nor do I need, for the purposes of disposing of the application, to deal with the precise requirements of s 180, other than to say that it is necessary for the applicants to show the standard of conduct expected in the circumstances, and the relevant breach of that standard. 87 The question then is to determine the facts so far as necessary to form a view as to whether there is a serious question to be tried in relation to these potential causes of action. 88 I find for the purposes only of this application that the following chronology of events is shown to have occurred in respect of the actions of the Receivers and in respect of their potential liability. I have made these findings without regard to the evidence ultimately objected to which I have not otherwise ruled upon during the course of the hearing. To the extent that objections were made originally to the affidavits of Edward John Maitland, where matters the subject of these objections have been otherwise introduced into evidence, I have relied upon such evidence. In relation to the agency issue raised against the Bank, to which I specifically refer later, I have assumed all the evidence relied upon by the applicants is admissible. This annual report was audited by PricewaterhouseCoopers. • On 6 January 2001, the Company held a public meeting to discuss its future. It was stated in the presence of a representative of the Bank that the Bank "would not accept any offer in relation to [the Company] from any party other than Bundaberg Sugar Limited". • On 18 January 2001, the Receivers were appointed. • By 31 January 2001, Tully Sugar Limited ('Tully') had put together a consortium of interested parties including Ergon Energy, Theiss Constructions and North Queensland Electric Authority ('NQEA'). • On 1 February 2001, Mr Dennis (the first-named first respondent) told Mr Camilleri representing Tully that the Bank would be supportive of a proposal by Tully to reduce the amount owing to the Bank to a manageable level. They discussed the fact that the sale of the Warrami Land could possibly eliminate the total debt owing to the Bank. • On 7 February 2001, KPMG provided to Tully a preliminary report on a due diligence investigation. The value of the total assets of the Company was recorded at $80.3 million, as at 31 December 2000. • On 9 February 2001, Tully informed the Receivers by letter of Tully's desire to pursue a majority acquisition of the Company, and an offer was made to put $10.75 million in escrow for 6 to 8 weeks. Government entities expressed support, in order to have $4 to $5 million set aside for repairs to the mill and contingencies. • Also on 9 February 2001, Tully informed the Receivers by letter that they were interested in purchasing the Company's sugar industry-related shares separately, including the STL shares. • On 12 February 2001, there was a meeting between Mr Camilleri, and the Receivers at which Mr Dennis advised Tully to proceed with its proposal but did not give a deadline. Tully thereafter inspected the Company's factory and continued with due diligence. • On 16 February 2001, STL reported to shareholders the net tangible asset backing was $1.06 per share, and the earnings per share were $0.013 per share. • On 19 February 2001, Tully wrote to the Receivers regarding previous inspection of the factory and due diligence. Tully reiterated that it was interested in purchasing all the Company's assets or purchasing the STL shares separately. • On 20 February 2001, the Receivers advised Tully that their equity proposal "would be sufficient to take [the Company] out of receivership". • On 21 February 2001, at about 9.45 am, Tully told Mr Dennis that a proposal was to be presented to the Receivers and travel arrangements had been made. Mr Dennis said he would arrange a suitable time and venue (after a scheduled telephone conference with the Bank at 10.30 am). • On 21 February 2001, at about 10.30 am, the telephone conference between the Receivers and the Bank occurred. • On the same day, a contract for sale of all the Company's assets (save the Warrami Land) was entered into with Bundaberg for $15.1 million. • At about 4.00 pm on the same day, Mr Shannon representing Tully called Mr Dennis but was told he was unavailable. • At about 5.00 pm on that day, Tully first became aware that "a highly conditional contract had been signed...with [Bundaberg]". The Receivers advised "not to bother with any travel arrangements". • On 2 April 2001 the Receivers filed a report with ASIC. In that report there was no indication that the Receivers carried out valuations of the assets sold or advertised the sale. • On 21 August 2006, the Company executed transfer of part of the mill land. Consideration was recorded as $14,599,993. Furthermore, the applicants submitted that there was no public tender issued in relation to the sale of the Company's assets, nor was there public advertising. The applicants pointed to the fact that there were only 33 days between when the Receivers were appointed on 18 January 2001 and when the Contract was entered into on 21 February 2001 and the entire assets (save the Warrami Land) were sold. The applicants also pointed to the report filed by the Receivers with ASIC on 2 April 2001 in which no mention was made of any valuation or tender process. I accept that the Receivers did not seek or receive any valuations of the land or assets nor were involved in any public tender process or advertising prior to the contract being entered into on 21 February 2001. 90 The applicants also submitted that the Receivers were in fact obliged to continue the sale process and bring in additional potential bidders in order to achieve the best possible price. Further, the applicants, in rebutting the Receivers' claim, submitted that the sale was not required as a matter of urgency so as to repair the mill for the crushing season in June/July as Tully (as a potential bidder) had plans and funding outlined in their proposal to deal with that. The applicants also submitted that, contrary to the Receivers' submission, there was an obligation to deal with Tully as a potential bidder, and it ought to have been brought into the competitive bidding process. 91 In addition to the evidence set out above, there was a substantial amount of evidence and submission on behalf of the applicants directed to showing that the sale of the Company's milling assets was at a substantial undervalue. I do not propose to rehearse that evidence, most of which was either objected to by the respondents or said to be of no relevance or probative value. I have already come to the conclusion that there is sufficient evidence to demonstrate some sale at undervalue, namely the sale of the Company's shares for the consideration of $500,007. Of course, sale at an undervalue does not show that (relevantly) there has been a breach of ss 180 or 420A of the Act or an equitable duty, although a sale at a substantial undervalue may be some evidence of such a breach. However, I have come to the conclusion that the applicants have demonstrated that there is a serious question to be tried against the Receivers in relation to each of the potentially available claims I have referred to without the need to consider any further evidence sought to be relied upon as to the extent of the undervalue of the sale. 92 One matter to consider is whether there was another potential purchaser in the market with which the Receivers did not effectively engage and of which they were aware. Without recourse to evidence of subjective statements of opinion or intent by individual board members of Tully, it can be readily demonstrated by the correspondence that there was a potential buyer or interested party in the market of which the Receivers were aware. I do not proceed on the basis that there was any absolute obligation on the part of the Receivers to engage in discussions with other potential purchasers, but the evidence is relevant to whether there is a serious question to be tried in that the Receivers failed to take reasonable steps to obtain a reasonable price. 93 As mentioned above, on 9 February 2001, Tully wrote to the Receivers, updating them on the progress of the proposed offer. The proposal was conditional on financial assistance from government. The letter stated that "such assistance is essential in order to find working capital in the order of $4 to $5 million to prepare the mill to crush and cover contingencies, as there is no other ready source of the funds for these purposes". Further, it was indicated that time was not available for the protracted changes necessary for Tully to acquire control of the Company, notwithstanding that the cash could be available. The proposal provided that $10.75 million be held in escrow for the 6 to 8 weeks required to obtain the control of the Company and to seek the working capital from government. 94 The Receivers submitted that this letter indicated a highly conditional proposal of Tully to acquire a 50% interest in the shares of the Company. The Receivers also pointed to the fact that the proposal was highly dependent upon a number of factors including external funding and support from the government to assist with working capital requirements. 95 As already mentioned, on 9 February 2001, Tully wrote to the Receivers explaining their interest in negotiating the acquisition of the sugar industry-related shares. The letter stated relevantly that Tully was not aware that Bundaberg's offer for the Company's assets included these shares, and it was stated "in the event that you are not able to grant the time for our proposal to succeed or there is no compromise possible, we stand ready to negotiate acquisition of these terminal company shares". The Receivers submitted that this did not constitute an offer. 96 On 22 February 2001, the Receivers wrote to Tully in response to its letter complaining of not being involved in the negotiations of the foreshadowed proposal. Your written communications to us acknowledge this fact. Mr Shannon indicated the Board ... were not unanimous in their resolution. Mr Shannon made the point Ergon was negotiating to take security over [Tully's] assets ahead of [Tully's] existing lenders and this was likely to be unsatisfactory to [Tully] . I accept this. Tully was apparently interested, but only subject to conditions and without any confirmation of funding. The Receivers could be under no certainty that the offer would proceed and on what terms. 100 However, the fact remains that the Receivers proceeded to sale in a very short period of time and without seeking any valuation or competitive tender, without advertising and whilst aware of at least some interest from Tully. It is significant that the contract of sale entered into with Bundaberg was itself subject to many conditions, and no obvious reason for the haste to enter into the Contract is apparent. The Receivers did not provide any evidence on this matter. Undoubtedly, the proposals by Tully did not correspond with those of Bundaberg, but this in itself does not mean more time and effort could not have been given to the Tully proposal. It could not be contended that Tully was not genuine in its interest, having regard to its interest in the factory and in pursuing due diligence. Prior to the sale being entered into, there seems to have been no opportunity given to Tully to come up with another proposal. Whilst one can only speculate as to whether Tully would have changed their proposal more in line with that acceptable to the Receivers, this opportunity was lost by the haste and methodology adopted by the Receivers. 101 It is important, at this point, to again emphasise the context in which I am assessing the evidence. I am not to treat the application as a trial of the substantive issues. I need only be satisfied that there is a serious question to be tried in the way described by Gummow and Hayne JJ in O'Neill (2006) 227 CLR at [65]. I must look at the matter having regard to the whole of the evidence before me, and assess the conduct of the Receivers. 102 Whilst it may be said that generally receivers should obtain two independent valuations prior to sale, or sell assets at a public auction, with a private sale as a last resort (see O'Donovan J, Company Receivers and Administrators (Lawbook Company) at [10.2370]), this is not a rule of law. Nor is it a rule of law that receivers should attempt to bring competing bidders into competition (but see Forsyth v Blundell [1973] HCA 20 ; (1973) 129 CLR 477 at 508-509 and Florgale Uniforms Pty Ltd v Orders [2004] VSC 65 ; (2004) 11 VR 54 at [410] - [438] especially at [418]-[419]). However, they are matters of common sense in normal circumstances, and no satisfactory explanation has been offered for such a course not being followed in the circumstances. There is evidence (which I accept) that Tully would have been in a position to assist with the Company's problems, and the evidence suggests that there was several months available to carry out the maintenance work on the mill, and that the consortium referred to by Tully was in a position to carry out this work and had costed such requirements into its proposal to be put to the Receivers. 105 On the basis of the facts I have found, and in view of the fact that the Receivers have not provided evidence to explain the sequence of events leading up to the sale to justify their methodology and haste, I am of the view that there is a serious question to be tried in relation to the Receivers in respect of each of the potentially available claims I have referred to above. Looking at the whole of the Receivers' conduct in the circumstances in which it occurred there is a serious question to be tried as to the Receivers failing to take reasonable steps in obtaining a proper price and looking after the interests of the Company, and in this way acting unconscionably. For the purposes of this application I need go no further. 106 I mention one further matter in relation to this aspect. It may well be that if there was some evidence that the Bank directed, instructed or otherwise interfered with the Receivers, and the Receivers acted accordingly, this would assist the case against the Receivers. If the Receivers merely followed the direction of the Bank, this would be some indication of the Receivers failure to carry out their duties. It will be apparent from my reasons in respect of the allegations against the Bank that no such basis exists for supporting the case against the Receivers. However, for the reasons indicated, such evidence is not necessary for my granting leave to proceed in respect of the Receivers. If [the Bank] directed or interfered with the Receivers' activities, they will be the agents of [the Bank] (see American Express International Banking Corporation v Hurley [1985] 3 All ER 564 at 568(f) and 571(g); Florgale at [496]). Each of the security documents expressly provided that the Receivers were the agents of the Company and the Company was solely responsible for anything done or not done by the Receivers. The deed of appointment contained an express provision to similar effect. 109 The effect of rendering the Receivers the agents of the Company is to "relieve the mortgagee from the liabilities which the law casts upon a mortgagee going into possession and to place upon the mortgagor the liability for the acts and defaults of the receiver" (see State Bank of New South Wales Ltd v Chia [2000] NSWSC 552 ; (2000) 50 NSWLR 587 at [868] per Einstein J and the cases referred to). 110 A mortgagee has no power to direct a receiver in the performance of the receiver's task: Medforth v Blake [1999] EWCA Civ 1482 ; [2000] Ch 86 at 94-95; Chia 50 NSWLR at [881]. Nevertheless, communication between the receiver and the mortgagee is entirely proper. The receiver occupies a fiduciary relationship with his or her appointors, one aspect of which is the duty of the receiver to keep his or her appointors informed about the progress of the receivership. 112 However, more than mere consultation or the communication of preferences by the mortgagee would be required: Chia 50 NSWLR at [885]. • On 30 January 2001, Mr Ray Pridmore, Global Credit Manager of the Melbourne branch of the Bank, spoke to members of Tully stating "[the Bank] can't allow the [Bundaberg] offer to lapse. [Mr Pridmore] will attempt to negotiate an extended period. " At that time, no final offer had been received by the Bank from Bundaberg (through the Receivers). • Clause 18 of the Contract, which provided for the Bank to elect to complete the Contract or exercise the power of sale as mortgagee could only have been inserted on the Bank's instruction. The applicants submitted that if the Receivers were simply acting as agents for the Company, there would be no need for them to add such a clause. • On the morning of 21 February 2001, Tully spoke to the Receivers and wanted to arrange a meeting. The Receivers said they could not arrange a time without first conferring with the Bank at 10.30 am. • Mr Dennis wrote to Tully on 22 February 2001 and said "the position of our negotiations with [Tully] was duly considered in a telephone conference with [the Bank] on 21 February having regard to the interest of [the Bank] and the other stakeholders and in the context of the information available to me". The applicants submitted that it was the Bank who considered the proposal of Tully at the telephone conference with the Receivers, which would have been unnecessary unless it was instructing the Receivers about them. The failure of the Receivers to communicate with Tully and bring them into competition with Bundaberg after a telephone conference with the Bank could only have occurred after instructions were taken from the Bank as to the manner in which the Receivers were to proceed. The applicants also submitted that the entirety of the communication between the Receivers and the Bank is within the Bank's and the Receivers' knowledge. As they have chosen not to go into evidence, the Court is entitled to more confidently draw an inference in favour of the applicants in the absence of evidence from the Bank and the Receivers. 115 Further, the applicants submitted that the evidence relied upon must be looked at as a whole and cumulatively, and supports the inference that the Bank instructed the Receivers in regard to the sale rather then merely communicating with them about the same. 116 Assuming all the evidence relied upon by the applicants against the Bank on the issue of agency is admissible, in my view it does not establish that there is a serious question to be tried against the Bank in support of a case of agency. I do not consider there is any evidence, which either directly indicates or from which I could properly infer, that the Bank has directed, instructed or interfered with the Receivers' activities. 117 For the Bank to state a preference for a sale to Bundaberg, prior to the appointment of Receivers, is to do just that --- it does not indicate anything in the nature of an instruction or direction. In any event, the evidence seems to be that this preference was only stated in the presence of a representative of the Bank, which I am presumably asked to infer was adopted by the Bank. This in my view I cannot do without more evidence before me. 118 Similarly, the indication that the Bank did not want Bundaberg's offer to lapse, where no final offer had been received, would be a natural reaction when one wants to have a sale. The Bank would want to keep the negotiations open to obtain the best deal. I do not, and cannot, properly draw the inference that the statements of Mr Pridmore (of the Bank) on 6 and 30 January 2001 suggest the Bank intended or did exercise control over the Receivers, or that the Bank had the power to prevent the Bundaberg offer from lapsing or that negotiations were being held directly between the Bank and Bundaberg. 119 As to the inclusion of cl 18 in the Contract, accepting that it was inserted at the suggestion of and for the benefit of the Bank, its inclusion does not suggest that the Bank directed, interfered with, or instructed, the Receivers in relation to the decision to enter into the sale. It may have been a matter that the Bank wanted in the terms of sale, but this does not support the claim made by the applicants against the Bank in this proceeding relating to its involvement with the Receivers prior to the sale. 120 As to the conversation of 21 February 2001 and the letter of 22 February 2001, the evidence merely indicates that there was a discussion on 21 February 2001 between the Receivers and the Bank, and as a stakeholder it was being consulted. It does not show, as the applicants contended, that the Receivers could not arrange a time without first conferring with the Bank. It does not indicate that the Bank was being other than just consulted. The evidence was simply that the Receivers were going into a conference with the Bank, that it would get back to Tully to arrange a time after that conference, and that the Bank was consulted about the sale. 121 Further, the failure of the Receivers to communicate with Tully and bring them into competition with Bundaberg after a conference with the Bank does not lead to the conclusion that this only occurred upon the instruction of the Bank. 122 Even assuming, which is probable, that discussions took place between the Bank and the Receivers regarding the Tully proposal, this would be expected and does not suggest any form of agency of the type alleged by the applicants. Even if there were many conversations over a short period of time, no inference could be drawn as sought by the applicants. The timing of the conversations does not take the matter any further. 123 Admittedly the entirety of the communications between the Receivers and the Bank is within their knowledge, and they have not provided any evidence. However, to my mind there is simply no evidence on this point to which they need to respond. Even treating the effect of the evidence as cumulative does not, in my view, call for a response. 124 For the above reasons, I have come to the view that there is not a serious question to be tried against the Bank on the issue of agency, and therefore no basis to grant leave in favour of the applicants against the Bank. In my view it is appropriate to grant leave, in this case against the Receivers, even though prior written notice was not given to the Company. Without directors, the Company effectively has no means or capacity to accept and respond to any notice given to the Company. I would not require, nor is it practical for, the applicant to call a general meeting of shareholders for the purposes of receiving and considering the notice. Accordingly, notice would be of no utility in this case. In view of my findings in relation to the Receivers, the case will now proceed only against the Receivers and not the Bank. It may eventuate that in the course of that case evidence may become available implicating the Bank in the conduct of the Receivers, for instance, evidence showing the Receivers merely followed the Bank's direction. This is an inquiry which would be relevant in relation to the case against the Receivers, because it may be evidence of a failure to carry out their duties. However, I do not consider that this possibility impacts upon my decision in relation to the Bank. I can only approach the question of leave being granted against the Bank on the evidence available now, and make a determination accordingly. It would not be appropriate to adjourn indefinitely the leave application against the Bank pending further interlocutory steps being taken against the Receivers in order to discount the possibility of the Bank being shown to be implicated in the way alleged by the applicants. If evidence implicating the Bank does become available during the course of the case against the Receivers, then the position in relation to the Bank may need to be revisited, although there will obviously be some potential problems arising due to the effluxion of time. I say nothing more about this possibility, but only mention it as a matter upon which I have given some consideration. 127 Therefore, I will make orders to the effect that the 31 applicants identified in the Company extract from ASIC's records have leave nunc pro tunc as and from at least 20 February 2007 to bring proceedings against the Receivers, and that the application brought against the Bank be dismissed. I do not propose to limit the grant of leave to only certain claims. It may be that the current pleading will require reconsideration but it is not appropriate at this stage of the proceeding, now that the matter can proceed against the Receivers, to limit the potential claims that may be able to be pursued at trial after the advantage of interlocutory processes. 128 A number of matters need to be addressed, including conditions as to costs in respect of the proceeding, the costs of the application for leave, and further directions for the proceeding, including the proper parties, the pleadings and venue for the hearing. I will, therefore, direct that the parties confer and thereafter each party within seven days, file and serve draft minutes of orders reflecting these reasons, and dealing with conditions as to the costs of the proceedings, costs of the application for leave and any future directions sought. I will adjourn the further hearing of the proceedings to a date to be fixed. I certify that the preceding one hundred and twenty-eight (128) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | application for leave to bring proceedings whether leave may be granted nunc pro tunc criteria to be applied whether there is a serious question to be tried corporations |
2 The focus of that examination was, in part, to determine within the scope of Dr. Unwin's expertise whether or not a medical condition suffered by the Applicant might be alleviated by reason of the inter-relationship between the Applicant and the use of his assistance dogs. The Applicant in the motion advances the proposition that the report of Dr. Unwin goes beyond an examination of the question of whether the particular condition might be alleviated through the use of the Applicant's assistance dogs, either "Buddy" or "Knuckles" and examines the question of the use of the assistance dogs and comments upon the utility, features and characteristics of the assistance dogs. 3 It seems to me that upon a proper reading of the report of Dr. Unwin, the report does not do those things. Dr. Unwin in his report has formulated a series of questions by which Dr. Unwin seeks to deal with the extent to which the identified condition might be ameliorated or alleviated by reference to or through the use by the Applicant of the assistance dogs. In a sense, Dr. Unwin is responsive to a series of questions but the proper construction of the opinion expressed in the report in response to those questions is focused upon the medical question of whether or not the condition might be alleviated rather than a forensic assessment of the qualities or characteristics of the two assistance dogs in particular or assistance dogs in general. 4 It may be that in the proceedings, Mr Forest might wish to put propositions to Dr. Unwin as to the basis upon which Dr. Unwin has expressed his opinion and whether the expression of those views can sit comfortably with either a failure to observe either of the dogs in question or with a failure to observe the behavioural interaction between either of the dogs and Mr Forest but it is correct to say those are matters which ought to be put to Dr. Unwin as part of the cross examination of Dr. Unwin as to the basis for the expression of his opinion. The expression of the view reflected in the report is the expression of the medical opinion about the condition and factors which might influence its alleviation or otherwise. 5 The report deals with an assessment of the mental state of the Applicant based upon Dr. Unwin's examination, reaches diagnostic conclusions about that matter and then seeks to comment upon, as a matter of therapeutic consequence, whether the use of an assistance dog would alleviate the condition thus diagnosed. 6 Mr Forest is a self-represented litigant and I have elected to record these observations in addressing for Mr Forest the concerns he has raised by his Notice of Motion concerning the report. 7 I propose to dismiss the Notice of Motion in each proceeding and the costs of each Notice of Motion are reserved. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | application by applicant in the proceedings concerning scope of compliance by respondent with an order for the conduct of a medical examination of the applicant discrimination proceedings issues involving the disability discrimination act 1992 . practice and procedure |
2 In addition, Mr Rogers seeks a range of interlocutory orders concerning some of those properties the most immediately relevant of which is a claim for an injunction pending the trial of the action restraining the Respondents from exercising a power of sale by auction on 22 April 2006 of property (freehold land) described as Lot 5 on Registered Plan 137240 and having a title reference of 15361206 and a premises address of 13 Moreton Street, Toogoom (near Hervey Bay in Queensland), although Mr Rogers describes the property as having an address of either 13 or 15 Moreton Street, Toogoom. 3 The hearing of the application for an interlocutory injunction to restrain the conduct of the auction was listed for hearing on 18 April 2006 having regard to the impending auction date. Mr Rogers is a self-represented litigant. The Respondents are represented by solicitors and counsel. The first directions hearing in the matter will be held at 9.30am on 4 May 2006. The present proceeding is the most recent proceeding commenced by Mr Rogers against these Respondents and it will be necessary to put this action in context. 4 The most immediate difficulty confronting Mr Rogers is the question of whether he has standing to maintain the proceeding and in particular the application for the interim orders he seeks. His immediate difficulty derives from the fact that on 23 February 2005, Deputy Registrar Baldwin made an order for the sequestration of the estate of Mr Rogers. It will be necessary to record the precise status of the bankruptcy proceedings in dealing with the application. 5 In formulating these Reasons, I will identify the basis for reaching the conclusion reflected in the order, however, I primarily direct these Reasons to Mr Rogers in order to explain the operation of the relevant rules as Mr Rogers is appearing on his own behalf. 6 Unfortunately, at the outset of the hearing, there was some confusion as to the state of the material filed and relied upon by Mr Rogers in support of the application. Mr Rogers had filed an affidavit on 7 April 2006 in support of the interlocutory application but he placed no reliance on that affidavit. Rather, Mr Rogers relied upon an affidavit filed on 11 April 2006 which exhibits documents described as "GR1" to "GR22" although exhibits "GR18", "GR20" and "GR21" have not been filed or served by Mr Rogers and therefore those exhibits form no part of the material relied upon. Mr Rogers also relies upon a further affidavit filed on 11 April 2006 which exhibits two documents described as "GR101" and "GR102". 7 The trustee of the estate of Mr Rogers was represented at the hearing by Mr G W Rodgers who I will describe as the "trustee's representative" so as to avoid any confusion between the Applicant and Mr Rodgers. The trustee's representative tendered with the consent of the Applicant and the Respondents a document marked "Exhibit A" for identification which is a deed dated 15 September 2004 made between Mr Rogers and four of the present Respondents concerning aspects of arrangements made in relation to a number of the properties the subject of controversy between the Applicant and the present Respondents. In order to secure finance for the acquisition of some investment properties, Mr Rogers approached, through a broker, Mr Russell Percival and Mr Paul Hare and ultimately entities controlled or associated with each of those individuals, including, Asset Loan Co Pty Ltd ("ALC"), Asset Loan Company Pty Ltd ("ALCPL") and Riverstone Nominees Pty Ltd ("Riverstone") as trustee for the Percival Family Trust. Mr Rogers also entered into arrangements with Mrs Judith Hare as trustee for the Hare Property Trust. 9 Monies were borrowed from one or more of these entities by Mr Rogers and entities controlled by him including a company called Living Space Holdings Pty Ltd which subsequently was placed in liquidation. A guarantee of the loan monies was given by the wife of Mr Rogers, Mrs Lynne Rogers. In respect of one of the properties, Ms Johanna Braas was also a borrower. 10 A number of properties were acquired by Mr Rogers and parties associated with him including the property located at 13 Moreton Street, Toogoom, a property at No. 2 Rommin Lake Crescent, Fingal Head in New South Wales and a property at 86 Mal Campbell Drive, Craignish in Queensland. Each of these properties was offered as security for the various advances. So far as the Fingal Head property is concerned, it seems that Mrs Lynne Rogers and Ms Johanna Braas became the registered proprietors of that property. 11 By 4 August 2004, ALCPL had made demand upon Mr Rogers for repayment of loan monies amounting to $437,573.40 and the parties were in controversy about their respective rights and obligations in relation to the various properties and the financing arrangements. On 20 July 2004, Mr Rogers issued proceedings in the Federal Court of Australia (Q136 of 2004) against ALC, ALCPL, Mr Hare, Mr Percival, Riverstone and Ms Judith Hare. As to the latter two parties, the proceedings were taken against them in their trustee capacity. The deed of settlement provided for a release, discharge and indemnity in respect of various matters and the discontinuance of the Federal Court proceedings. 13 Various disputes arose in relation to the deed of settlement and the implementation arrangements contemplated by the deed which resulted in further controversy between the Applicant and the Respondents. In particular, controversy arose concerning the requirement contained in the deed of settlement of 4 August 2004 for Mr Rogers to sell the Toogoom property to ALCPL by, on or about 15 August 2004 with clear title. It seems that the title was subject to enforcement processes in respect of two writs, one issued by Dale & Meyers Timber Trade Centre Pty Ltd and the other by Mr Scott Petersen seeking the recovery of certain debts. ALCPL had discharged the first mortgage but could not secure clear title due to the writs of attachment. The second matter of controversy concerned arrangements in relation to the purchase by Mr Rogers of two further lots at Toogoom located within an estate called Fraser Waters Estate (Lots 41 and 127) and the arrangements between Mr Rogers, Mr Hare and Mrs Judith Hare concerning the payment of deposits for the purchase of those lots, the ultimate settlement of the purchase for each lot and the basis upon which the title would be held and by whom. 14 On 15 September 2004, a second deed of settlement was entered into between Mr Rogers, ALC, ALCPL, Mr Hare and Mrs Judith Hare which provided for certain loans to be made to Mr Rogers, the acquisition and on-sale of Lots 41 and 127 and the distribution of the ultimate net proceeds of sale of Lots 41 and 127 after the payment of identified outgoings with ultimately the net profit, so defined, to be distributed equally between Mr Rogers and Mr Hare. One of the outgoings to be discharged from the proceeds of sale of Lots 41 and 127 was the performance of an indemnity obligation assumed by Mr Rogers in favour of ALCPL concerning the discharge of the writs of attachment which Mr Rogers had either failed to discharge or had not been able to originally discharge. 15 Otherwise, the deed of 15 September 2004 preserved the operation of the deed of 4 August 2004. 16 Further controversy arose between the Applicant and the Respondents concerning the property at 13 Moreton Street, Toogoom, the Fingal Head property, the implementation of the first and second deeds of settlement and conduct alleged by Mr Rogers of a disreputable kind on the part of the Respondents. Those allegations became the subject of further proceedings in the Federal Court of Australia (QUD224 of 2004) against ALC, ALCPL, Mr Hare, Mr Percival and Mrs Judith Hare and Riverstone in their trustee capacities as to the latter two. In March 2005, proceedings were issued by ALCPL in the Supreme Court of New South Wales (Proceeding No. 1600 of 2005) against Mrs Lynne Rogers seeking recovery of possession and other orders in relation to the Fingal Head property. 17 Again, the parties elected to resolve their differences in relation to the field of matters in controversy and entered into a third deed of settlement dated 8 September 2005. By that deed, Mrs Lynne Rogers consented to judgment in favour of ALCPL in respect of the New South Wales proceedings and Mr and Mrs Rogers agreed to deliver up vacant possession of the Fingal Head property to ALCPL subject to the terms and conditions of the document. The deed provided for a number of implementation arrangements and additional substantive matters including the consent by Mr Rogers to the discontinuance of the second proceeding in the Federal Court and judgment in favour of the present Respondents on a cross-claim by those Respondents in that action. Mr Rogers agreed to transfer the Toogoom property into the name of ALC and, subject to the transfer, ALC agreed to allow Mr Rogers to reside rent free in the Toogoom property for a period of six months and granted an option to Mr Rogers or his nominee to purchase the Toogoom property within a period of six months from transfer of the property, for a nominated price. The deed further provided for additional arrangements in relation to the discharge of the writs of attachment and other terms in relation to the Toogoom property. The deed further dealt with aspects of the Fingal Head property, particular arrangements in relation to the Mal Campbell Drive property and other matters. 18 In outlining the chronology of events in the course of the hearing, Mr Rogers says that the matters of controversy over the period leading up to the execution of the deed of settlement on 8 September 2005 were addressed by the deed and the intention was that all matters in dispute would be resolved by the deed and all rights in relation to the field of matters in issue would merge in and be dealt with by the deed. Nevertheless, by reason of the allegations mentioned shortly, Mr Rogers says that he was induced to enter into the deed by reason of unlawful conduct on the part of the Respondents. He asserts not only conduct he characterises as misleading or deceptive conduct but asserts conscious deceit on the part of the Respondents. He alleges unconscionable conduct and asserts a pattern of behaviour on the part of the Respondents which has caused him significant distress and anxiety. 20 The principal affidavit relied upon by Mr Rogers however is, in truth, a collection of assertions and allegations rather than a formulation of particular conduct by particular persons at a time, on a date or at a place directed to a particular issue. The very great difficulty apart from any other matter is that Mr Rogers does not establish facts in a coherent way which give rise to an arguable question concerning an identified right which might be protected by an interlocutory order. One of the central matters upon which Mr Rogers particularly relies is to be found, he says, at paragraph 7(k) of his more lengthy affidavit by which he contends that, "the Respondents concealed and encouraged Rogers not to repay loans as the Third Respondent (Mr Hare) would buy part of his business and this would extinguish the debts. Hare then failed to buy shares and called up the loan at penalty interest of 12% per month". No greater detail than that is given of this alleged arrangement by which the Respondents are said to have encouraged Mr Rogers not to repay loans or make payments in a timely way consistent with his obligations. 21 Other important matters alleged by Mr Rogers include conduct on the part of Mr Hare and Mr Percival of breaking into the home of Mr Rogers and Mrs Rogers to take files and papers in relation to the various property transactions, conduct of intimidating and harassing Mr Rogers and his family, conduct of threatening Mr Rogers and his family in various ways, committing perjury in proceedings before His Honour Justice Spender, asserting facts before the Supreme Court of New South Wales in proceedings for recovery of vacant possession of the Fingal Head property which were known to be untrue, entering into agreements without any intention of performing the terms of those agreements, aiding and assisting, for an entirely improper purpose, Dale & Meyers Timber Trade Centre Pty Ltd in taking bankruptcy proceedings against Mr Rogers and extracting profit sharing arrangements in relation to particular properties as an incident of the provision of finance by the Respondents which Mr Rogers would not otherwise have accepted but for alleged unconscionable conduct and undue influence. 22 In formulating the application for interlocutory relief and fundamentally, the affidavit material, Mr Rogers "must be able to show sufficient colour of right to the final relief in aid of which interlocutory relief is sought": Gleeson CJ, Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; [2001] 208 CLR 199 at 217, paragraph [11] or, "(1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction": Mason A-CJ, Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; (1986) 161 CLR 148 at 153. Sir Frederick Jordan in his work C hapters on Equity in New South Wales , 6 th Edition (1947) at page 146 simply put the jurisdiction to make an interlocutory order, in these terms, "the purpose of an interlocutory injunction is to keep matters in statu quo until the rights of the parties can be determined at the hearing of the suit" . An application for review of that order was filed on 25 February 2005 in the Federal Magistrates Court. On 15 March 2005, Federal Magistrate Baumann made an order staying the sequestration order pending the determination of the application for review. On 19 May 2005, Federal Magistrate Baumann dismissed the application for review and discharged the stay order of 15 March 2005. On 25 May 2005, Mr Rogers appealed to the Federal Court from the order of Federal Magistrate Baumann dismissing the application for review. Mr Rogers made a further application for a stay of the sequestration order pending the determination of the appeal. His Honour Justice Dowsett on 14 June 2005 dismissed the motion for a stay, ordered Mr Rogers to pay the costs of the motion and made directions in relation to the appeal: Rogers Trading as Living Space Building v Dale & Meyers Timber Trade Centre Pty Ltd [2005] FCA 862. On 5 December 2005, His Honour Justice Dowsett heard and determined the appeal by Mr Rogers, dismissed the appeal and ordered Mr Rogers to pay the costs of the appeal: Rogers v Dale & Meyers Timber Trading Centre Pty Ltd [2005] FCA 1891. 24 On 1 March 2005, the Respondents in Federal Court proceeding QUD224 of 2004 also being the Respondents in this proceeding, gave notice to the trustee of the estate of Mr Rogers for the purposes of section 60 of the Bankruptcy Act 1966 (Cth). Section 60(2) provides that an action commenced by a person who subsequently becomes a bankrupt is, upon his becoming a bankrupt, stayed until the trustee makes an election, in writing, to prosecute or discontinue the action. Section 60(3) provides that if the trustee does not make such an election within 28 days after notice of the action is served upon him by a respondent, the trustee shall be deemed to have abandoned the action. 25 The trustee made no such election for the purposes of section 60(3) of the Bankruptcy Act within 28 days of notice of the proceeding from the Respondents, or at all. On 8 December 2004, His Honour Justice Spender declined to make certain interlocutory orders sought by the Applicant but did make an order that upon Mr Rogers' undertaking "not to dispose or further encumber the property at 15 Moreton Street, Toogoom until the determination of the proceedings, it is ordered that the Respondents do not seek to take, deal with or recover possession of the property at 15 Moreton Street, Toogoom or otherwise deal with it until the determination of the proceeding". His Honour then made extensive directions orders for the conduct of the litigation. On 8 April 2005, His Honour made a further order which touched upon the Applicant's allegations of harassment by the Respondents by ordering that the, "undertaking of Respondents as natural persons made 8 December 2004, not to harass or intimidate Applicant remains in full force and effect". 27 On 6 October 2005, His Honour Justice Spender heard a notice of motion filed by the Respondents seeking an order that Proceeding QUD224/2004 be dismissed. His Honour considered the effect of the stay order by Federal Magistrate Baumann, the discharge of the stay, the dismissal of the application for review, the pending appeal before Justice Dowsett and the operation of section 60 and particularly section 60(3) of the Bankruptcy Act , in the circumstances of the case. His Honour also had regard to the provisions of the deed of settlement dated 8 September 2005 and the content of the orders made, as put to His Honour, by the Supreme Court of New South Wales. So as to avoid a question of whether an order for dismissal might give rise to a res judicata of underlying causes of action, His Honour, in the face of submissions from the trustee of the estate of Mr Rogers, made a declaration that, "action QUD224/2004 is deemed abandoned by operation of s60(3) of the Bankruptcy Act 1966 (Cth)", an order that "the proceeding be struck out" and "no order as to costs". An order that any Loan Agreements & Deeds of Settlement are void. An order for payment of loss or damage. An order varying any loan agreements or mortgages. An order refusing to enforce any or all provisions of contracts. An order declaring transfer of interest in properties void. An order for the return of interest paid, return of costs incurred as a result of any or all agreements between the parties. An order that the respondents or the fifth respondent transfer her interest in two blocks of land situated at Fraser Waters, near Hervey Bay to the applicant. Any other order that the court deems fit. An order for costs in the proceeding. 30 The Applicant does not depose to any facts which establish a present threat by way of an exercise of power of sale in respect of any property other than the property at Moreton Street, Toogoom. Although a determination of the issues in relation to the standing of the Applicant to seek orders restraining a dealing in the property at Moreton Street, Toogoom by the Respondents will have application to a threatened exercise of the power of sale in relation to the other properties, the present application is assessed in the context of the immediate threat by reason of the auction on 22 April. 31 In the claim for interlocutory relief, the Applicant also seeks an order by paragraph 7 of the claim that, "the Respondents do not harass, intimidate or coerce the applicant, his family or neighbours". 32 The foundation for the claimed relief is said by Mr Rogers in his application to be contraventions of sections 51AC , 52 and 60 of the Trade Practices Act 1974 (Cth). The remedial intervention he seeks from the Court is an injunction to restrain the sale, an injunction to restrain intimidation and harassment and orders pursuant to sections 87(1) , (1A)(a) & 87 (2), in these terms, "contracts declared void, contracts varied, refusing to enforce any or all provisions of contracts, orders for return of property, payment of loss and damage and orders relating to transfer of interests in land". 33 The further matter raised by Mr Rogers goes to the exercise of the power of sale of the property at Moreton Street, Toogoom. The lender (mortgagee) has entered into possession under the charge. The mortgagee has issued a notice of exercise of power of sale pursuant to section 84 of the Property Law Act 1974 (Qld). Mr Rogers says that the notice was served at number 13 Moreton Street, Toogoom notwithstanding that the mortgagee knew from documents provided to the mortgagee by Mr Rogers that he resided at number 15, Moreton Street, Toogoom. Mr Rogers contends that the Respondents deliberately misled him concerning the intention to exercise the power of sale by, on the one hand, negotiating arrangements which led him to believe that the power of sale would not be exercised and, on the other hand, addressing the notice of exercise of power of sale to a place where the Respondents knew he did not reside. 34 One apparently contradictory aspect of that contention is that Mr Rogers in his own application seems to describe the address of the Moreton Street, Toogoom property as interchangeably 13 or 15 Moreton Street, Toogoom. The arrangements which led Mr Rogers to believe the power of sale would not be exercised are the arrangements he made by the deed of 8 September 2005. The order of His Honour Justice Spender of 6 October 2005 declaring the earlier proceeding abandoned and struck out had the effect of discharging the order of 8 December 2004 preventing the Respondents from dealing with the property at Moreton Street, Toogoom. The notice of exercise of power of sale was issued after the order of Spender J and is dated 11 October 2005. 35 The Respondents say that the Applicant has no standing to raise any question in relation to compliance by the mortgagee with any pre-condition to the proper exercise of the power of sale. Only the trustee of the estate of Mr Rogers can agitate such a matter and, in any event, even if one assumes there to be substance in the point, it raises no matter of Federal jurisdiction . The trustees' representative also asserts that the question of whether the mortgagee has properly given a notice for the purposes of the Property Law Act 1974 (Qld) can only be raised by the trustee and he does not seek to do so. "Property" means "real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property". "The property of the bankrupt" for the purposes of s58(1) means the "property divisible among the bankrupt's creditors; and any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt" (s5(1)). The property divisible among the bankrupt's creditors includes, "all property that belonged to or was vested in, a bankrupt at the commencement of the bankruptcy", or is or has been acquired by Mr Rogers (or devolves upon him) after the commencement of bankruptcy and before his discharge (s116(1)(a)). 37 Section 116(1)(b) characterises as property divisible amongst the creditors, "the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his ... own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his ... discharge". The notion of property of the bankrupt within s5(1) of the Bankruptcy Act seems to have the same meaning for the purposes of both s58(1) and s 116 (1) of the Bankruptcy Act , consistent with the views of the majority in Cummings v Claremont Petroleum NL [1996] HCA 19 ; (1986) 185 CLR 124 and Cirillo v Citicorp Australia Ltd [2004] SASC 293 at paragraphs [75] --- [79] per Perry, Bleby and Gray JJ. 38 Accordingly, all legal and beneficial interests of the bankrupt and all rights, capacities and powers exercisable by the bankrupt in relation to those interests vest in the trustee and are divisible among the bankrupt's creditors. The powers referred to in s116(1)(b) of the Bankruptcy Act are "powers 'which are familiar to all conveyancers and are powers properly so called' as Farwell J pointed out In Re Rose; Trustee of the Property of E T Rose v Rose . In other words, the powers referred to are authorities to dispose of property or interests in property for the benefit of the donee of the power or of some other person": Cummings v Claremont Petroleum NL (supra), per Brennan CJ, Gaudron and McHugh JJ at page 133. In effect, Mr Rogers says a claim based upon conduct on the part of the Respondents that bears the statutory character of misleading or deceptive conduct or unconscionable conduct on the part of ALC or ALCPL (or the Respondents more generally) in connection with the supply of financial services reflected in the various deeds, is a claim for compensation for a wrong which Mr Rogers is entitled to assert. 41 The Respondents say that to the extent that such a claim, however it might be formulated, is one with respect to a legal or beneficial interest of the bankrupt in land or involves any right, power or capacity in relation to such an interest, the claim vests in the trustee. Each claim for final relief involves a claim for an order based upon conduct alleged to contravene the Trade Practices Act 1974 (Cth) which is the subject of a claim for a remedial order with respect to an interest of the bankrupt in relation to property so defined by the Bankruptcy Act . 43 Specifically, the orders, in effect, seek declarations that contracts and agreements are void, that security documents concerning particular properties are void, that mortgages and contracts ought to be varied, particular properties ought to be transferred to nominated parties, that proceeds of sale be attached, that orders ought to be made preventing enforcement of contractual rights and entitlements etc. The only party with standing to assert an entitlement to such remedial orders with respect to that subject matter is the trustee of Mr Rogers. Moreover, the claims for interlocutory relief reflect precisely the same difficulty. 44 As to the question of whether any of these claims either for final or interlocutory relief fall within the exemption of s116(2)(g) of the Bankruptcy Act thus entitling Mr Rogers to maintain a claim and more particularly a claim for an interlocutory injunction to restrain an exercise of a power of sale by a secured creditor in connection with the property at 13 or 15 Moreton Street, Toogoom, the position seems to be this. However, the words cannot be taken in isolation. They must, in accordance with the ordinary cannons of construction, be read in the context in which they appear. 2) [1935] HCA 48 ; (1935) 52 CLR 713 at 721, Sir Owen Dixon, explained the test to be applied to determine whether the character of the claim is one properly falling within the exemption. The test appears to be whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property (Wilson v United Counties Bank Ltd (1920) A.C. 102 at pp111 and 128 --- 133). Where the essential cause of action is the personal injury done to the person or feelings of the bankrupt, the right to sue remains with the bankrupt. 48 It may be that when Mr Rogers or his advisers formulate a statement of claim in the proceeding, a claim might emerge which, in terms of its material facts, reflects a claim within the exemption reliant upon conduct which involves a contravention of ss52 , 51AC or 60 of the Trade Practices Act 1974 (Cth) independently of any of the former rights of the bankrupt in property which have become vested in the trustee. At the moment, the material does not establish any such right. The alleged contraventions of the Trade Practices Act 1974 (Cth), which are mere conclusionary assertions are relied upon as the basis for final orders with respect to the interests of the bankrupt in property which interests have become vested in the trustee. 49 Accordingly, a consideration of the claims for final and interlocutory relief demonstrates that the claims are not claims for damages founded upon immediate reference to the distress and anxiety caused to the bankrupt without reference to his rights of property . The ultimate relief is expressly conditioned by remedies in relation to the rights of the bankrupt to property for the purposes of the Bankruptcy Act . 50 Claim 3 of the claims for final relief is an order for payment of loss and damage. It too seems to be a consequential claim necessarily connected with the bankrupt's interests in property. To the extent that the pleader of the statement of claim is ultimately able to plead material facts demonstrating a claim for damage or compensation calculated by reference to the pain, anxiety or stress caused to the bankrupt by reason of conduct of the Respondents conferring a cause of action upon the Applicant, such a claim might fall within the exemption contemplated by s116(2)(g) of the Bankruptcy Act . 51 The only claim which bears such a character at the moment is clause 7 of the claim for interlocutory relief which is in these terms, "an order that the Respondents do not harass, intimidate or coerce the Applicant, his family or neighbours". That claim is not an incident of any claim for final relief in the proceeding. In other words, that claim for interlocutory relief is not called in aid of a claim for final relief within the scope of s116(2)(g) of the Act. If a claim for final relief is properly formulated within the exemption and conduct occurs which might properly be the subject of an application for an interlocutory injunction, such a claim might well be made by Mr Rogers independently of his trustee in bankruptcy. However, what he seeks in this application is an injunction to restrain an exercise of power of sale in relation to a particular property by a secured creditor in aid of final relief in relation to that property. The interest Mr Rogers has in that property is an interest vested in his trustee. Further, the affidavit material does not establish facts and circumstances which demonstrate an arguable case of harassment, intimidation and other such matters by a particular person at any time or place. 52 Mr Rogers attacks the exercise of the power of sale by the secured creditor[s] on the basis of a failure to comply with the requirements of s84 of the Property Law Act 1974 (Qld). The interest of Mr Rogers in agitating that question is his interest as owner of the property the subject of the security. That interest has become vested in the trustee. It includes the rights, powers and capacities of the bankrupt in relation to that interest which, in turn, includes the right to agitate the question of whether the secured creditor has complied with the Property Law Act 1974 (Qld). I accept the submission that only the trustee can agitate that question and the trustee chooses not to do so. 53 I am not prepared to accept the submission that no question of Federal jurisdiction arises in relation to that matter. If appropriate affidavit material or a properly formulated statement of claim raised a question of relief based upon Federal causes of action such as contraventions of the Trade Practices Act 1974 (Cth) and a question arose justiciable at the suit of Mr Rogers (which presently seems unlikely) concerning compliance by the secured creditor with a State Act and that matter arose from a common substratum of fact giving rise to the Federal claims, the accrued jurisdiction of the Federal Court of Australia would be enlivened: Re Wakim; Ex Parte McNally & Anor [1999] HCA 27 ; (1999) 198 CLR 511 at paragraphs [135] to [150]. So too is the question of whether the secured creditor in publishing advertisements for the sale of the property has mis-described the property at Moreton Street, Toogoom as simply land rather than land upon which a house is built. Ultimately, to the extent that there may be a surplus after realisation of the securities, the trustee has an interest on behalf of the unsecured creditors in that surplus or the interests of the bankrupt in that surplus. Similarly, to the extent that Mr Rogers has an interest in the Fingal Head property, that interest is vested in the trustee and no doubt the trustee would take steps to determine whether an order of the Supreme Court of New South Wales as entered properly reflects the order as made especially if giving effect to the order entered will prejudice the interests of the unsecured creditors. Mr Rogers contends that the order as made by His Honour based upon the notice of motion in the Supreme Court of New South Wales is not reflected in the terms of the order entered by the Respondents. Although Mr Rogers makes the assertion, the relevant material is not incorporated in the affidavit material. In any event, the issue is either one to be agitated by the trustee or a party who holds the interest affected by the conduct, which may be Mrs Lynne Rogers. At the moment in time when Mr Rogers entered into that agreement he remained an undischarged bankrupt. His application for review had at that time been dismissed by Federal Magistrate Baumann, the Stay Order of 15 March 2005 had been discharged and Dowsett J had refused a further motion for a stay pending appeal. At 8 September 2005, when Mr Rogers entered into the deed of settlement, he had no standing to deal with any real or personal property of any description or any estate, interest or profit whether present or future, vested or contingent arising out of or incidental to any such real or personal property. Any rights and powers in relation to that property that would have been exercisable by Mr Rogers had he not become bankrupt, became, upon bankruptcy, property of the bankrupt divisible among the bankrupt's creditors and vested in the trustee. 56 It is not necessary for the present purposes to resolve the question of the status of the deed except to say that to the extent that Mr Rogers seeks to rely upon it as the source of rights, the status of the document further weakens a claim which is not otherwise established on the evidence or as a matter of law. 57 There are discretionary factors which influence whether an order for an interlocutory injunction might otherwise be made. In this case, because the Applicant is an undischarged bankrupt, the undertaking as to damages is essentially meaningless. Secondly, in order to restrain an exercise of a power of sale on the part of a secured creditor, an injunction order would not ordinarily be made unless the amount secured by the mortgage is paid into Court or, in a case where the amount owing is disputed, the undisputed portion of the debt is paid into Court. The Applicant for interlocutory relief is not in a position to make any payment into Court of the monies secured by the equitable charge. 59 I reserve the question of costs. I will seek to deal with those costs at the directions hearing on 4 May 2006. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Solicitor for the Applicant: The Applicant was self-represented. | application by an undischarged bankrupt for interlocutory relief consideration of the applicant's standing to seek interlocutory relief in aid of final relief as formulated consideration of previous proceedings, scope of the action and the relevant provisions of the bankruptcy act sections 5, 58(1)(a) and (b), 60(2), 60(3), 116(1)(a) and (b) and 116(2)(g) consideration of the test for determining the scope of the phrase "wrong done to the bankrupt" for the purposes of the bankruptcy act 1966 (cth). bankruptcy |
In the application, the applicant seeks reinstatement in his previous employment as an outdoor education teacher at Lilydale High School, compensation from the date of his dismissal for lost wages and earnings, and costs. 2 The applicant began employment at the Lilydale High School on 10 February 2003. He was dismissed from that employment, his dismissal being confirmed by a letter from the Director of the Office of School Education dated 9 April 2003. The reason given for the dismissal at the time was that, for the purposes of gaining employment, the applicant had made a statutory declaration in which he declared that he did not have any convictions, findings of guilt, or pending charges of a non-traffic nature in Victoria, or any other State of Australia, or under Commonwealth law. In fact, as the applicant conceded to the Court, he had been convicted of several offences in the County Court at Melbourne, in November 2002. 3 The applicant took proceedings in the Australian Industrial Relations Commission ('the Commission'), pursuant to s 170CE of the Workplace Relations Act . His capacity to do so was challenged on the basis that, because in any event his employment was due to cease in June 2003, he was completing a qualifying period of employment and his application was barred by subss (5A) and (5B) of s 170CE. Initially, on 12 August 2003, Deputy President Hamilton dismissed the applicant's application, on the basis that his employment had been for less than three months, and therefore his dismissal fell within s 170CE(5A). On 22 August 2003, the applicant appealed from the decision of Deputy President Hamilton. A Full Bench of the Commission gave its decision on the appeal on 13 January 2004. The Full Bench allowed the appeal in part. In essence, the Full Bench held that subs (5A) of s 170CE rendered invalid only that part of the application that related to the harsh, unjust or unreasonable ground. The Full Bench decided that, so far as the applicant's application relied on alleged contraventions of ss 170CK and 170CM, it was necessary to refer the application for appropriate further action. 4 That further action was conciliation by the Commission. On 6 February 2004 Senior Deputy President Williams of the Commission issued a certificate in accordance with s 170CF(2) of the Workplace Relations Act , certifying that all reasonable attempts to settle the matter by conciliation had been, or were likely to be, unsuccessful in respect of the grounds of alleged contravention of ss 170CK and 170CM. The Senior Deputy President stated that he was unable to make an assessment of the merits of the case, due to a conflict in the factual position and the necessity to hear evidence. 5 By reason of s 170CFA(4) and (6) of the Workplace Relations Act , the applicant then had seven days from 6 February 2004, ie until 13 February 2004, to lodge a document containing an election to take court proceedings, if he wished to do so. The applicant lodged his election on 6 February 2004, stating that he wished to proceed in this Court in respect of the grounds under both ss 170CK and 170CM. By reason of s 170CP(6), he then had a period of 14 days, or such further period as the Court might allow, in which to make his application to the Court. The fourteen-day period expired on 20 February 2004. As I have said, the application was not filed until 6 December 2005. 6 The respondent, the State of Victoria, by its Department of Education and Training, indicated at the first directions hearing that it wished to seek to have the proceeding dismissed as incompetent. At that directions hearing, I directed the filing of material in support of, and in opposition to, any application to exercise the undoubted power given by s 170CP(6) to enlarge the time within which the application can be made. 7 The principles upon which an application for enlargement of time in a case such as this should be determined have been the subject of comment in a number of cases. They are most conveniently set out for present purposes in the judgment of Marshall J in Jennings v Salvation Army [2003] FCA 1193 (2003) 128 IR 366 at [9] , where his Honour quoted from the judgment of a Full Court of the Industrial Relations Court of Australia in Roger Coyne v Ansett Transport Industries (unreported, Industrial Relations Court of Australia, Wilcox CJ, Ryan and Madgwick JJ, 24 September 1996). The mere absence of prejudice to the respondent is an insufficient basis to grant an extension of time. As I have said the lapse of time involved over one year and nine months from the date when the application should have been filed. A period of that length itself may be sufficient to defeat an application to enlarge time. As the Judicial Committee of the Privy Council said in Ratnam v Cumarasamy [ [1965] 1 WLR 8 at 12 ], "[t]he rules of court must prima facie be obeyed."... In all but very exceptional cases, they should be rigidly applied when, as here, more than one year has elapsed between the decision and the commencement of proceedings in this court. I accept that he is an unrepresented litigant, with no knowledge of the law. It is clear, however, that he had taken two steps in the Commission, instituting his proceeding there and appealing to the Full Bench, both of which involved time limits. Together with his certificate dated 6 February 2004, the applicant was given a note, making it clear to him that it was incumbent upon him to commence proceedings before an appropriate Court, and that lodgement of a notice of election did not have the effect of commencing any Court proceedings. Perhaps regrettably, the notice did not advise that there was a time limit attached to the commencement of proceedings in the Court, much less what that time limit in fact entailed. 10 The applicant, in his material, was inclined to blame the respondent for failing to give him advice as to the presence of a time limit, or its duration. It was no part of the respondent's function to give the applicant such advice. It was no part of the respondent's function to anticipate that the applicant would wish to bring proceedings in the Court. In particular, it was no part of the respondent's function to encourage the bringing of those proceedings, and the consequent expenditure of public money. 11 The applicant relied in part on the fact that he had been misled by the fact that the respondent had commenced a proceeding in the High Court of Australia, challenging the correctness of the decision of the Full Bench of the Commission and, with the applicant's consent, had that proceeding remitted to this Court. That proceeding was discontinued by the respondent on 8 April 2005, by filing a notice of discontinuance in this Court. To the extent to which the applicant might have been misled by the continuance of that proceeding up until that time, he could not have been misled after that time by that proceeding. Almost eight months elapsed after the discontinuance of that proceeding, before the applicant commenced his present proceeding in this Court. 12 The applicant told me from the bar table that it was not until four weeks before he commenced this proceeding that he spoke to a lawyer. He apparently spoke to a lawyer of his acquaintance about another matter, and the issue of his dismissal from employment was raised incidentally. He then received advice, so he told me, that there was a time limit attached to the bringing of a proceeding of this kind and that the time limit was well and truly exceeded. Notwithstanding this advice, it was another four weeks before the applicant filed his proceeding in this Court. That is a period double the time limit provided for in the statute. 13 The applicant relied primarily on the proposition that he is a very heavily committed, and very busy, person. He is, so he said, the head of intelligence for an organisation known as the Jewish Defence League, which has the task of investigating and dealing with Muslim and Arab terrorist threats and neo-Nazi groups throughout the world. He told me that he is one of 16 people involved in that organisation in Australia, but there are many more elsewhere in the world. It is apparently an unpaid job, but a very demanding one, and draws on what the applicant said is his background in military intelligence. Much of this it is necessary for me to take on faith, because it is not dealt with in any detail in the applicant's affidavit material, but I accept the fact that the applicant is very heavily committed and very busy. To some extent, however, there is an issue of priorities involved. Even the busiest person will find time to do something that has to be done before a time limit expires. 14 I should also mention that the applicant revealed to me that, since 2001, he has been enrolled as a law student at Griffith University in Queensland. Apparently that enrolment is more for the purpose of obtaining a library card, and using the resources of the university, than it is for actually studying law. The point that I take from it is that the applicant had available to him library facilities that, at the very least, would have enabled him to investigate the issue of time limits, had he chosen to do so. 15 The second principle quoted by Marshall J in Jennings relates to action taken otherwise than in the Court to contest the termination. There is no material before me suggesting that the applicant has in any way done anything that would have kept the respondent informed of the proposition that he regarded the issue of his termination of employment as still a live one. 16 The next two principles involve the issue of prejudice to the respondent. The respondent attempted to make a case of prejudice arising from the delay. According to its affidavit material, both the principal of Lilydale High School at the time, and the officer who signed the letter of dismissal, are no longer employed by the Department of Education and Training. The affidavit does not say that it is impossible to obtain information from those persons for the purpose of instructing counsel and solicitors in the case. Nor does the affidavit material indicate that those persons will be unavailable to give evidence, or will have no recollection of the circumstances of the dismissal. The affidavit material also says that the respondent discontinued the earlier proceeding in this Court, remitted from the High Court, on the basis that the applicant had not taken any steps to pursue his claim since filing his notice of election on 6 February 2004. The reason for discontinuing the proceeding was that the respondent considered the expenditure associated with prosecuting the proceeding to be unjustified. Counsel for the respondent conceded today that any point that might have been raised in that case, as to want of jurisdiction in the Commission, could be raised in the present proceeding, as to want of jurisdiction in the Court. There appears to me to be no reason why the same point could not be agitated in this proceeding. Given the application of s 347 of the Workplace Relations Act , which would prevent the successful party from claiming costs of a proceeding in most circumstances, it is difficult for me to see how the discontinuance of that earlier proceeding, in reliance on the applicant's failure to institute the proceeding he has now instituted, could be said to amount to prejudice. I therefore proceed on the basis that the respondent has suffered no prejudice, but taking into account the fourth principle from Jennings , which is that the mere absence of prejudice is an insufficient basis to grant an extension of time. 17 The fifth principle relates to the merits of the proceeding. The applicant made it very clear that he is particularly interested in attempting to demolish the validity of the ground that was given as the reason for his termination. That ground, of course, was the making of a false statutory declaration as to prior convictions. I drew to his attention that, even if he were able to establish that that ground was entirely false, that would not itself bring him success in the proceeding. His proceeding in this Court is necessarily confined to the particular grounds that he has raised. Under s 170CK of the Workplace Relations Act , the applicant claims that he was dismissed for reasons that included those found in subs (2)(f) of that section, particularly political opinion, national extraction or social origin. In substance, the applicant claims that he was discriminated against and dismissed in consequence of the fact that he holds his position in the Jewish Defence League, and the fact that he is the illegitimate son of Adolf Hitler, thereby giving rise respectively to the grounds of political opinion on the one hand and national extraction or social origin on the other. 18 There is no doubt that, at the time leading up to the dismissal, there was considerable publicity about the applicant's involvement with the Jewish Defence League and his claims as to his biological origins. The matter was, as the applicant put it, leaked to the Herald Sun newspaper by a fellow teacher, after one of the students at the school had discovered evidence of it whilst researching for a school project on the internet. The Herald Sun sensationalised the issues by suggesting that the applicant was a terrorist, or someone associated with terrorists, working in the school system in Victoria. The matter was also taken up on a radio station, 3AW, by one of its hosts, Neil Mitchell, who apparently interviewed the Minister for Education and Training, Ms Lynne Kosky, and, as the applicant put it, 'seriously embarrassed' her. 19 The applicant would therefore seek to make the case that the Minister had a direct hand in the dismissal, and that it was done for reasons of his involvement in the Jewish Defence League and his biological origins, being his national extraction or social origin. On these issues counsel for the respondent conceded that the respondent would carry the onus of proof. That is to say, it would be necessary for the respondent to prove on the balance of probabilities that whoever made the decision to dismiss the applicant from his employment did not have as a reason for that decision the applicant's political opinion, or his national extraction or social origin. There is material before the Court in which it is suggested that the only reason for the dismissal was the applicant's conviction for several offences in November 2002 and his failure to reveal those convictions in his statutory declaration. There is, however, one sentence in the briefing paper to the person advanced by the respondent as the decision-maker, drawing attention to the publicity surrounding the applicant's continuing employment. On the assumption that the decision-maker was aware of the nature of the publicity, this gives rise to the possibility that, at least, the respondent would have to go into evidence in order to attempt to satisfy the onus of proof. 20 One further matter about the merits needs to be mentioned and that is as to the relief sought by the applicant. Given that the employment was for a limited duration and, as I have said, due to expire in June 2003, it could not be said that reinstatement in employment was any longer a possibility. The position that the applicant occupied has gone and it would not seem possible for the Court to compel the respondent to create another position for him. The temporary nature of the position would seem to preclude that. As far as compensation is concerned, it would also seem fairly clear that the maximum compensation that the applicant could hope to achieve would be the remuneration that he had lost for the remainder of that term of employment, as a result of the dismissal. The amount of money at stake would therefore not appear to be very significant. Indeed it might be the case that, if the applicant were represented by lawyers, as he is not, he would find himself out of pocket at the end of the day, even if he were to succeed, because he could not also claim costs, having regard to s 347. 21 There appears to be no substance in the ground raising contravention of s 170CM of the Workplace Relations Act , because the applicant appears to have been given pay in lieu of the period of notice required under that section. 22 The sixth of the principles that were considered in Jennings does not appear to be applicable in the present case. 23 It therefore appears to me that I have to decide whether to grant the applicant the extension of time he seeks by balancing, on the one hand, the very long and not very satisfactorily explained delay before commencement of proceedings and, on the other hand, the prospect of success that might arise from the fact that the respondent would carry the onus of proof on the grounds under s 170CK of the Workplace Relations Act . The balance is therefore between the serious lapse of time and the possibility of success, arising from the fact that the respondent has the onus of proof on the crucial issues, and there is some slight evidence that at least the circumstances that the applicant claims were the reasons for his dismissal might have been present in the mind of the decision-maker. It is a difficult balance to make, because it is a balance between two different things. What tips it seems to me to be the relatively inconsequential nature of any relief that the applicant could claim if he were successful. As I have said, in any event, a relatively small amount of money would seem to be all that he could claim successfully, and even that might be subject to questions of duties to mitigate loss and damage, and so forth. 24 As the first of the principles which are quoted in Jennings says, the prima facie position is that the time limit should be complied with unless there is an acceptable explanation of the delay which makes it equitable to extend it. Having regard to the proposition found in the judgment of McHugh J to which I referred earlier, it seems unlikely, in the circumstances of a case such as the present, that it would ever be regarded as equitable to extend a time limit to the extent required in the present case. 25 For those reasons, I refuse to grant to the applicant the extension of time that he seeks. It follows that it will be necessary for me to dismiss his application. The application for an extension of time in which to commence the proceeding be dismissed. 2. The application filed on 6 December 2005 be dismissed. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | employment termination discrimination proceeding not commenced within statutory time limit whether time should be extended effect of long delay not explained satisfactorily relevance of prospect of success on issues on which respondent would carry onus of proof relevance of relief being limited to small amount of money relevance of absence of prejudice to respondent industrial law |
The appellant is a national of Pakistan who is a Shia Muslim claiming a well-founded fear of persecution in that country by reason of his association with a group known as the TNFJ. 2 After the refusal of his application by a delegate of the Minister, the appellant lodged an application with the Refugee Review Tribunal. On 21 November 2005, the Tribunal advised the appellant that as it was unable to make a decision in his favour on the information before it, he was invited to an oral hearing. The appellant signed a Response to Hearing Invitation form indicating he did not wish to attend the hearing. Consequently, no hearing was conducted and the Tribunal affirmed the decision of the delegate. Naturally, an important aspect of that finding was the fact that the appellant had not attended the hearing in order to supplement the information which the Tribunal had before it. 3 The appellant then filed an application in the Federal Magistrates Court seeking relief in the nature of prerogative relief to set aside the Tribunal's decision. Scarlett FM affirmed the decision of the Tribunal on 16 June 2006 and it is from that judgment that this appeal is brought. I was born on 06/12/1976 in the city of Mian Channu in district Khanewal of Punjab province Pakistan. I hail from a religious family and we have all the affiliations with Tehrik Nafaed Faqia Jafaria (TNFJ) mian channu district. As I am a born Shia Muslim and very soon I was a front line worker and preacher of the shia faith within the TNFJ. SSP is also a very strong in our area and they are very strong hardliner militant people and they use to create disturbance in our meeting many times. The SSP workers in Khanewal kidnapped me in the month of February. I was blindfolded and was taken to a place far away from Khanewal city. It was almost a jungle. They took me to a house where I saw the armed men and there the SSP people mercilessly beat me. After that shocking death of my cousin the SSP lodged an police report (FIR) against my brother. This is a vital proof of religious heated Sunni society. I am going through a great level of stress; my family members are hiding because of fear of Sunni hardliners approach. As a Shia Muslim I need a protection visa. 6 I have read the decision of the learned Federal Magistrate. It is perfectly conventional in form and points out the fundamental difficulty which this appellant has by reason of his failure to attend the Tribunal's hearing. 7 In my opinion, the appeal is totally without merit and should be dismissed. | appeal dismissed migration law |
The Tribunal had affirmed a decision of a delegate of the first respondent to refuse to grant the appellant a protection visa. She claims to have been a Falun Gong member since 1997 and that she participated in Falun Gong activities in Beijing in 1999 when such participation was banned. The appellant claims to have been detained by police for ten days, that she 'nearly became mentally ill' and was physically and mentally tortured. After her release, the appellant claims she continued to practice Falun Gong although she was strictly supervised by local police. The appellant claims she cannot return to China because of her well-founded fear of persecution as a Falun Gong practitioner. The Tribunal found the appellant was unable to answer basic questions regarding Falun Gong and she did not know the relevant exercises involved in the practice of Falun Gong. Before the Tribunal the appellant claimed that she was not feeling well but the Tribunal did not consider this a satisfactory explanation of the appellant's lack of knowledge of Falun Gong. Given the finding that the appellant had not practised Falun Gong in China, the Tribunal did not accept her claims in relation to the mistreatment or detention. Consequently, the Tribunal was not satisfied the appellant had any well-founded fear of persecution in China. By amended application the appellant relied upon two grounds of appeal: first, that the Tribunal failed to carry out its statutory duty by breaching s 424A of the Migration Act 1958 (Cth) ('the Act'); and second, that the Tribunal did not believe the appellant was a Falun Gong practitioner due to bias. 5 The Federal Magistrate rejected the first ground, and held that the Tribunal did not breach s 424A of the Act as it did not rely on any information that was necessary to provide to the appellant for comment: at [22]-[23]. His Honour found the Tribunal's decision was based upon adverse credibility findings which arose from an assessment of the appellant's oral evidence. 6 His Honour also rejected the second ground of appeal. At the hearing the appellant submitted that the Tribunal was biased because it did not believe her, however his Honour found that the Tribunal's disbelief did not disclose any form of bias: at [27]. 8 The first ground of appeal asserts that the Tribunal was biased because it did not believe, and failed to consider, the appellant's claims. I agree with the Federal Magistrate's finding, that there is no basis to conclude that the Tribunal's decision was affected by actual or apprehended bias: SCAA v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 668 ; VFAB v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 872 ; (2003) 131 FCR 102. 9 The second ground of appeal contends that the Tribunal failed to perform the statutory duty imposed by s 424A of the Act. As the Federal Magistrate found, the Tribunal's decision turned on the Tribunal's assessment of the appellant's evidence at the hearing and did not rely upon any information which fell within the scope of the obligation in s 424A(1). His Honour found the Tribunal was not required to give written particulars of the information referred to under the heading 'Country Information' because that material fell within the exception in s 424A(3)(a) of the Act: Minister for Immigration & Multicultural & Indigenous Affairs v NAMW [2004] FCAFC 264 ; (2004) 140 FCR 572. I agree with the conclusion and reasoning of the Federal Magistrate. 10 Mr Jordan of counsel, who appeared for the first respondent, brought to my attention the High Court of Australia decision in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592 (' SZBEL '), and indicated that in light of s 422B of the Act (which did not apply in SZBEL but does in this appeal) the principles enunciated by the High Court of Australia may not be relevant to my considerations. I need not examine this issue because in my view, at the hearing, the Tribunal did identify the issues upon which its decision was based and gave the appellant the opportunity to address the issues and make submissions. Accordingly, there is no basis upon which to find the Tribunal breached procedural fairness in circumstances such as those in SZBEL assuming that the principles enunciated therein apply to this appeal. I will also make orders that the title of the first respondent be changed to Minister for Immigration and Citizenship and the Tribunal be joined as the second respondent to this appeal. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | no point of principle migration |
Alternatively, it seeks an order extending time for compliance with the condition prescribed in s 625(3)(c)(i) of the CA. Relief is required due to inadvertent delay. 2 On the hearing of the application I granted an extension of time pursuant to s 1325A(2) of the CA. I informed counsel that I would publish short reasons briefly after the hearing. These are the reasons. I am satisfied that it has been served with the papers and has had an opportunity to consider its position. 4 Despite MacMahon's failure to make the application for quotation by the time limit of 29 May 2008, the Australian Stock Exchange (ASX) nevertheless has subsequently approved the application subject to certain conditions. Those conditions are not unusual conditions in circumstances similar to the present where shares have not been but are likely to be issued at some future time. Although Ausdrill did not oppose relief being granted, helpful assistance was provided in relation to the most appropriate approach to be taken. On 22 May 2008 MacMahon lodged a bidder's statement as defined in s 9 of the CA with ASIC in relation to its proposed acquisition of all the fully paid ordinary shares in Ausdrill by way of an off-market takeover offer. The bidder's statement was also given to Ausdrill and lodged with the ASX on 22 May 2008. Pursuant to the bid, the bid period (see the definition in s 9 of the CA) was to start when the bidder's statement is given to the target. Therefore it commenced on 22 May 2008. 7 Between 5 June 2008 and 6 June 2008, MacMahon dispatched copies of the bidder's statement, with the relevant dates inserted, to all holders of fully paid ordinary shares in Ausdrill who were recorded on the Ausdrill register of members as at 26 May 2008. 8 The offer period commenced on 6 June 2008 and is currently scheduled to close on 15 August 2008 unless it is further extended. The offer involves an offer of shares in MacMahon to Ausdrill shareholders. It represents that MacMahon would apply to have any MacMahon shares so issued to Ausdrill shareholders under the offer admitted to quotation on the ASX. It does not 'guarantee' admission. 9 As the start of the bid period was 22 May 2008, s 625(3)(c)(i) of the CA requires MacMahon to make an application to the ASX for the quotation of the maximum number of MacMahon shares that MacMahon would be required to issue under the offer by 29 May 2008, i.e. within 7 days. In fact it did not do so until the evening of 10 July 2008 due to inadvertence. There is evidence that 'through an administrative oversight' MacMahon's solicitors did not advise MacMahon of the timing requirements of s 625(3)(c)(i). That omission was discovered on 10 July 2008 when the solicitors did immediately advise MacMahon of the obligations under the section and on the same day at about 5.30 pm, MacMahon lodged the application for quotation with ASX. The application was lodged after trading on the ASX and outside of normal business hours. For that reason the motion refers to 11 July 2008 rather than 10 July 2008 as the relevant proposed date for compliance with the requirements of s 625(3)(c)(i) even though the lodgement was on the evening of 10 July 2008. 12 The date on which the error was discovered and the prompt response that discovery caused have been adequately explained. It was clearly, I think, a situation, as counsel for MacMahon, Mr AJ Power put it, a matter of 'falling through the cracks'. This is a commercial transaction of some significance. There is no evidence or reason to suppose that MacMahon would wish to jeopardise its commercial prospects through deliberate regulatory non-compliance. 13 The primary consideration would appear to be the interest of offerees. The intent of the subsection must be to ensure that investors receive the benefit of that which they have accepted. They should not be left with securities that are unlisted when they have accepted securities with a reasonable expectation they will be listed. As has been observed in other circumstances (see for example Re Pinnacle VRB Ltd (No 9) & (No 10) (2001) 40 ACSR 56) , the acceptors would be prejudiced if after acceptance of the offer the bidder did not proceed with an application to have the relevant shares quoted on the ASX. 14 Ausdrill shareholders who have accepted the offer have not yet suffered any real prejudice or loss as a result of MacMahon's delay in making the application for quotation. Their entitlement to receive the quoted shares and to trade them on the ASX has been unaffected by the delay in making the quotation. It is an entitlement which is yet to materialise. 15 The consequences of delay in making the application for quotation is similar to the circumstances in Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 128 FCR 581 and in Laserbond Limited (ACN 057 636 692), in the matter of Laserbond Limited (ACN 057 636 692) [2007] FCA 2056. In Re Insurance Australia the purpose and effect of granting the orders was that doing so would simply ensure that investors who had applied for relevant shares would receive securities in accordance with the applications they had made. Using this approach, it follows that s 1322(4)(d) enables the Court to extend the time periods referred to above in ss 723 and 724 even though no absolute positive obligation to make the application for listing and to achieve quotation on the ASX is spelt out in the time periods designated in those sections. 22 In addition to the statutory requirements to be taken into account by the Court pursuant to subs (6) of s 1322 , there is, as with the exercise of any discretion, a requirement to exercise it judicially having regard to the subject matter, scope and purpose of the specific provisions and the general legislative framework. It must also be exercised having regard to the interest of all parties affected and the public interest in ensuring compliance with statute law and company constitutions. Evidence of a blatant disregard of the provisions of the Act or the constitution of the company may lead to refusal of relief. The view taken in Primelife Corporation Ltd v Aevum Ltd [2005] NSWSC 269 by Hamilton J was that his Honour was satisfied that in the context of the takeover provisions of the CA, both those sections provided the Court with the power to make the requisite orders. (4) The failure to vary will mean, subject to any remedial court order, that the bid has lapsed and there are no extant offers. If an application for a remedial order is the subject of a s 659B prohibition (which it is unnecessary to decide) the prohibition does not apply in this proceeding because the bid period had technically come to an end at the time the application was made. ": per Lee J in Diamond Rose NL v Striker Resources NL (1998) 85 FCR 76 at 81D-E, citing Hamilton v Property Investments Ltd [1983] WAR 317 and Sanwa Australia Finance Ltd v Ground-Breakers Pty Ltd (In Liq) [1991] 2 Qd R 456. So is s 1325D: Pinnacle at [17] - [19]. In Winpar, the trial Judge (Santow J) found that the solicitor, advising on a selective reduction of capital, considered the concluding words of s 256C(2), which required a special resolution at a meeting of those members of the company whose shares were being cancelled. The solicitor construed the words as meaning that the resolution could be considered at the general meeting of all members to consider the reduction of capital: Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2000) 157 FLR 59 at [31] - [33]. The Court of Appeal regarded this view as wrong but, the solicitor having acted honestly, held there was an appropriate basis for s 1322(4) relief: CA at [76]. In the end, his Honour only relied on s 1325A(2) of the CA. That subsection specifically deals with contraventions of s 625. 18 I would respectfully agree that it appears in the present circumstance to be the most appropriate source of power to grant the relief. As the available relief it provides for is in the widest terms, I propose to simply extend the time for compliance with s 625(3)(c)(i) of the CA until the actual date of lodging (or at least the next business day). In my view, that is the most appropriate section and the most appropriate relief. I am satisfied on the basis of the principles discussed, that the circumstances warrant such relief being granted. For the purposes of the offers described in Appendix A to the plaintiff's bidder's statement dated 22 May 2008, the compliance with s 625(3)(c)(i) of the Corporations Act 2001 (Cth) is extended until 11 July 2008. 2. The plaintiff and all other interested or affected parties have liberty to apply to vary these orders upon first giving 24 hours written notice. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | extension of time for compliance with s 625(3)(c)(i) of the corporations act sought discretionary considerations most appropriate form of and basis for relief corporations |
In these reasons the word "waters" is used with the meaning attributed to it by the Act. The word "water" is used with the meaning attributed to it by the Water Act (2000) (Qld). On 30 September 1998, by force of amendments to the Act, all applications lodged with the Tribunal became proceedings filed in the Court. On 18 October 1999 the Court ordered that the application be combined with application QG 6094 of 1998. On 8 October 2004, the Court amended the application by removing land and waters south of Bells Peak South from the area previously claimed. The subject land and waters are hereinafter referred to as the "determination area", which term has the meaning attributed to it in Schedule 1 to these reasons. It comprises six separate "parcels". Those parcels will eventually be described as lots 1 to 6 on AP 9675 and are hereinafter referred to by such lot numbers. 3 The applicant claims that the Mandingalbay Yidinji people traditionally owned a much larger area which included those six lots. However they accept that native title over parts of that area has been extinguished. Other parts are subject to joint claims by the Mandingalbay Yidinji people and the Gunggandji people. The boundaries of the six lots have been drawn to exclude those parts. In Schedule 2 the six lots are divided into Parts A and B. Part A contains lots 2, 3 and 4 which comprise unassigned Crown land. Part B contains lots 1, 5 and 6 which comprise land appropriated for particular purposes not inconsistent with the continued non-exclusive use of, and access to, it by native title holders. 4 The Tribunal gave notice of the application pursuant to, and in accordance with, s 66 of the Act. Pursuant to s 84(3) of the Act, the State of Queensland, Cairns City Council, Cairns Port Authority, Ergon Energy Corporation Limited and Telstra Corporation Limited were joined, and remain, as parties to the proceedings. One hundred and thirty-nine other persons, categorised as indigenous people, professional fishers, irrigation and water supply recipients and tourist operators, were also joined as parties. They have all since withdrawn from the proceedings by giving written notice pursuant to s 84(6) of the Act. On 30 September 1998 the application was referred to the Tribunal for mediation pursuant to s 86B of the Act. The parties have reached agreement upon the terms of a draft determination. Division 1C of Pt 4 of the Act provides that some or all of the parties to native title proceedings may negotiate an agreed outcome for an application or part thereof. Section 87 of the Act empowers the Court, if it is satisfied that such an order is within its power, to make an order in, or consistent with, the terms of the parties' agreement without holding a full hearing. Yabalam and his wife Biddie had four children, who were, in birth order, Tommy Read, Maggie Mundraby, Fred Mundraby and Amy Hyde, but the spokesmen for the current group are a sub-set of Fred Mundraby's descendants, namely, Basil Vincent Mundraby (aka Vincent Mundraby Sr), his nephew Alf Mundraby and his son Vincent Mark ("Boy") Mundraby. They know that their family name "Mundraby" has its origins in the missionaries' attempts to pronounce and write the indigenous personal name, Mandi Ngarrbay. Dumbunji, or Mount Gorton, lies in the Murray Prior Range, 3 kilometres north-east of the northernmost point of the claim area. Birdsell's Yarrabah genealogy sheets El and X-5 recorded Yabalam's and Fred's relationship, but not their place of birth or origin. Dixon (1991a:132, 134 and elsewhere) identified Ngumbunji as the Yidiny / Yidiy language name for Mount Gorton, so the straightforward interpretation is to take this as evidence for the two men's connection to the Mount Gorton area, i.e. to the mountain itself and to its associated country. Gungganyji people (with their children), who were the traditional owners of the land where the central mission site was situated, as well as the eastern portion of the Reserve. Yidinyji people (with their children), some of whom were the ancestors of the current Mandingalbay Yidinji claimant group; they were traditional owners on the western portion of the Reserve (Rigsby 2002:113). Had him removed to my room and attended. His mother (as is their custom in times of illness) cut a vein on the top of his head to bleed him with a piece of glass and cut too much and the poor little fellow lost a great quantity of blood before we could manage to stop the flow. He is in consequence of the great loss of blood very weak. I laid him on my bed and a cup of hot tea and a piece of bread and jam soon made the little chap feel better but it was a narrow escape from bleeding to death. " (Rigsby 2002:179). Furthermore, Fred Mundraby's personal information card (in the Menmuny Museum) listed his birth year as about 1883, which made him about ten years old at the time of his illness. Sometimes they and others describe themselves as the Mandingalbay "clan" group. He is confident, however, that it was a personal name. (Rigsby 2002:182). When Yabalam, his wife Biddie and their son Fred came in to the old mission site across the Range, they did not come as strangers. The Manggarra Yidinyji people who came in were not refugees from the Atherton Tableland or some other distant place: they were the next-door neighbours, and they were relations of Minminiy and other Gungganyji people who were the traditional owners of the country around the mission. (Rigsby 2002:182). Rigsby told them that their omission from the earlier genealogy meant that they were not members of their claimant group, that they would not share in the benefits to be gained by a native title consent determination, and suggested that the genealogy should be expanded to include all descendants of Yabalam, which the claimants agreed with. Others visit their country on a regular, e.g. weekly basis. They know particular places in the country by their indigenous language names and they use them, not English names. And although they no longer produce all their living and other needs from their own land, hunting, fishing and gathering remain important and meaningful pursuits. Claimants continue to use indigenous language names for many plants and animals, particularly for those species which are edible or used in making artefacts. Moreover, parents and grandparents pass on knowledge of traditional resources and techniques of taking or manufacturing them to their children and grandchildren". (Rigsby 2002:56). There had been a fire and we went hunting after the fire to get food for our families. While we were there we were visiting this cave there, there are two caves up high on the ridges, we had to go and check it out and make sure it hadn't been disturbed. We go round, especially after a fire when access is easier, and we check out the caves and landmarks and the middens left by our old people and we manage our interests in this way, we look after the forest and that's how Murris manage it. We check the damage the fire has done to our land, our caves, our animals and lakes. Then we'd clean it out right there too, gut it. We'd make afire right there along side it to burn the hair off and gut it, then we'd carry it home to have a big feast, lots of Mandingalbay Yidinji families at that feast. I've gone that a lot. Made a fire on the banks of a creek that they run down to after they get shot, and fall. Where the cassowaries run to. Then carried them back to Buddabaddoo. echidna) bandicoots, turkeys, birds, rock wallabies there's plenty of tucker in our country. We can live and camp out there for days. For each such generation, the majority of members of the claimant group lived on the land and had access to other parts of the land by foot and canoe, and now also by motor vehicles, power boats and the like. The majority of members of the claimant group in each generation have lived continuously within the claim area since its inception in 1893 as an Aboriginal mission. Indeed, rights are so strongly allied to responsibility that people with the strongest traditional-customary rights in an area often make their initial up-front statement of ownership in such terms as "We are the people who look after that area". The excavation was immediately next to the widely known Shield Rock / Walba Bigun site, which lies outside the claim area but is part of Mandingalbay Yidinji traditional country. Had it been extended a bit further, could have dislodged the large boulder and caused it to roll down the hill onto the roadway. But more importantly, Mandingalbay Yidinji people considered that the actions of the construction crew might have disturbed and upset the Story-Woman who lives there and the spirits of the Old People who look after the land. Their statements not only expressed deep ties of sentiment to the land, but also their sense of responsibility to it Rigsby reports that a confrontation took place in which the Mandingalbay Yidinji native title holders sought to assert their rights with force. Examples include the proper introduction of strangers to the sites, and the avoidance of loud or disrespectful conduct at them. Proper introduction may require the traditional owners to "talk Language" and introduce the visitors to the spirits there. An improper approach may threaten the community and the traditional owners by antagonising and aggravating the spirits. But sites are seen also as resources themselves, the sources of the spiritual power responsible for the maintenance of the land and the social order. with open vistas of grass, free of undergrowth, etc.). Claimants frequently say that they do this to promote the growth of new grass for wallabies and other species, but they also acknowledge they do it as much so for aesthetic reasons (Rigsby 2002:206). Marking the land is something the claimants believe that "Stories" / Ancestral Beings did during the Story-Time. The rich regional oral literature recounts the deeds of many Story-Beings as they fashioned the landscape and its topographic features, and the traditional owners consider that their prerogative of marking and changing the landscape comes to them by their descent from the Stories. Marking the landscape perhaps carries some deeper meanings, especially cutting the surface, given that the soil is, in a diffuse sense, identified with the Ancestral Beings. Recall Rigsby's remarks about the road construction crew taking fill from near Walba Bigun "Shield Rock". The available historical record prior to population reduction during the colonial period indicates that owners displayed very low tolerance for people intruding into their lands and using their resources without permission or some prior understanding. Today the Mandingalbay Yidinji and fellow Aboriginal Yarrabah residents still exercise such control as they can over their homelands by insisting that Aboriginal non-owners ask for permission, and, in turn, they reinforce their traditional ownership by recognising and respecting other groups' property rights in land by refraining from trespass and intrusion on it. Similarly, there are the songs, dances, and the language of the neighbouring Yedtinji. Their legends are kept before them by the various physical manifestations of the stories which they serve to explain. Like all Aboriginal people they have maintained very close bonds with their tribal lands, lands which are full of spiritual significance for them, were painted in cave-drawings by their forefathers, and were explained and glorified in legend. The claimants and their neighbours may no longer act and believe just as their ancestors did, but they by no means have abandoned or lost all that which their ancestors held dear. Importantly, they retain strong attachments of belief and emotion to their traditional lands. Indeed, it is in regard to land that they actively and clearly express and demonstrate traditional beliefs and practices". The most obvious examples of cultural property are the Story-Places (sometimes called "sacred sites") found on Mandingalbay Yidinji lands, together with their associated oral narratives. These, along with the paint designs, songs, dances and names associated with them, are the cultural property of the Mandingalbay Yidinji. Most significantly, the land itself in the specific claim area is in Aboriginal doctrine held to be the source of the aboriginal title-holders' membership and group identity. This is a core proprietary right of the aboriginal title-holders alone. There is such a Story Track between Fitzroy Island and Walsh's Pyramid which, some people believe, was formed when Jarruga "Scrub-Hen" travelled from Fitzroy to the Pyramid. Other people believe her direction of movement and her pathway were different again. For example, Vincent Mundraby Sr and Alf Mundraby took Rigsby to visit Guliga (which means "wild, angry"). Guliga is a fresh water lagoon in the Buddabadoo area, which lies outside the claim area but is part of Mandingalbay Yidinji traditional country, where some years ago a spirit Whirlpool surrounded Vincent Sr and frightened him after he broke three traditional laws for the place. First, he remained in the Guliga and Buluba areas after sundown, whereas traditional law says to stay away from them after dark. Second, he fished there after sundown, whereas traditional law says that people should hunt, fish and gather there in the daytime, not at night. Third, he took more than he and his family could eat that day; traditional law says that people should take only as much as they need and can use. Even when people no longer speak their indigenous languages, they continue to speak of them as their languages and to identify strongly with them (Rigsby 2002:210). Many people of all ages know and use the Yidiny / Yidiy words and names for plant and animal species, place names, personal names, etc. and to sing songs in the language. they are handed down the generations in family lines. They also establish special connections between the persons and the countries they name. We can also regard these traditional names as intellectual property because they are not available for anybody and everybody to bestow and use but only senior traditional owners of the country named can make the decisions and bestow the names. For example Djullja Mundraby, a young boy, is named for Jalja, a place that lies outside the claim area but within the Mandingalbay Yidinji traditional estate. People do not acquire property rights and interests in land by inheriting them on the deaths of predecessors, but they gain them automatically, as it were, at birth from their fathers and mothers. The contemporary ethnographic evidence is comprehensive and conclusive on this point, but in classical times by the serial patrifilial principle, people did not gain full or core rights from women, except where there were no other heirs, and occasionally by adoption and the like. Resolution necessarily involves both groups, so the statement of rights and interests needs to make this clear rather than to be read as though it delivers the right to resolve such a matter (or impose a resolution) solely to the claimant aboriginal title group or groups. I went then to walk our country with my dad and he pointed out lots of thins to me and told me stories that went with the country. We'd go hunting in the wet when ail the tucker comes down from the ridges, easier to get then. You know its uncles and fathers that train up our boys, my sons still too young, but soon 1 take them too, bring their uncle Alf too. Nevertheless, group heads and leaders, such as Yabalam and Minminiy, explicitly granted rights to live on their lands and to hunt, fish and gather over it to the non-Gungganyji and non-Mandingalbay Yidinji Aboriginal people who were sent to the Yarrabah Mission or who were born there. As well, people taught the newcomers where the special places were and the law and custom connected with them, so that they could occupy, use and enjoy them too without giving offence to the Stories and the spirits of the Old People. I note that there are no conflicting native title claims over the subject areas. The other claimant group in the immediate vicinity is the Gunggandji people. The history of this application and other applications in the area demonstrates that both peoples have carefully identified the land with which they traditionally relate. Clearly, the Gunggandji people and the Mandingalbay Yidinji people were in the area in 1892 when a mission was established in 1892. Equally clearly, they have maintained their contact with the area ever since. The question is, then, as to the position between the establishment of British sovereignty in 1788 and 1892. 18 I turn to the history of European contact. Cook visited in June 1770. He arrived at Cape Grafton on Saturday 9 June 1770. On the previous day, when further to the south, he saw people on small islands off the northern point of Rockingham Bay. At about 6.00 am on Saturday 9 June, he identified and named the "Frankland Isles", (now the Frankland Islands) and later, Cape Grafton. Banks recorded the sighting of people on the Frankland Islands. That night fires were sighted on the shore of Cape Grafton and during the day, people were seen. On Sunday 10 June Cook sailed around Cape Grafton and entered what is now Mission Bay. He, Banks and Solander went ashore looking for fresh water. They found streams but access was too difficult. They neither encountered people, nor saw signs of habitation. 19 On 26 June 1819 Allan Cunningham visited on the ship "Mermaid". He landed on Fitzroy Island and found water. Traces of natives were noticed in various parts such as the remains of fires, large holes formed in the search for grubs or larvae of insects and two old huts were discovered on an angle of the shore ... . Quantities of burnt shell were strew'd around their fires, the remains of their mussel or cockle feasts, and a canoe form'd from the stem of a Tree 12 feet long, with an outrigger and paddles, was found, hauled up among the mangroves - a fishing, line and hook made by grinding a shell down was taken from a Hut. He later moved to Green Island. He claimed to have traded with the people of Cape Grafton prior to his departure in 1858. 22 The above summary is sufficient to identify an apparently permanent occupation of the region by Aboriginal peoples as far back as 1770 and continuing until about 1858. There is every reason to assume that occupation continued thereafter and until 1892 when the mission was founded. By that time there were clearly two distinct groups, the Gunggandji people and the Yidinji people, of which latter group the Mandingalbay Yidinji people are part. There is no reason to conclude that the division was recent. Had it been, one might reasonably have expected the fact to have been reported. It seems more likely that it was an established fact of life as far as the Aboriginal people were concerned. If there were two groups, then they probably identified areas as being the exclusive province of one or other of them. This is their own traditional understanding of their history. There is no reason to doubt it. 23 The Gunggandji people claim the area of a peninsular which is bounded by Mission Bay to the north, the Coral Sea to the north-east, east and south-east, and the Murray Prior Range to the south-west. To the west of the Gunggandji claim lies a combined claim by both peoples. Further to the west lies the land of which the Mandingalbay Yidinji people claim to be traditional owners. It stretches from Trinity Bay and Trinity Inlet in the north and north-west to Bell Peak South in the south. In the north much of the area has been dealt with in ways which have extinguished native title. Lot 1 is on Trinity Bay and lots 2, 3 and 4 are on Trinity Inlet. Lots 5 and 6 are further to the south. They are adjoining. 24 The people encountered by Cook, Banks, Cunningham and Mein were probably Gunggandji coastal dwellers rather than the Yidinji people who lived further inland. It seems quite unlikely that there would have been substantial cultural, social or technological differences between them. The former concentrated on resources available from the ocean, whilst the latter probably resorted to Trinity Bay and Trinity Inlet. If the Gunggandji people had canoes and built huts, it seems likely that the Mandingalbay Yidinji people did so. If the Gunggandji people traded, then presumably, the Mandingalbay Yidinji people did so. 25 The claim group is comprised of the descendants of a man called "Jabalum" and others recruited by adoption in accordance with traditional laws and customs. His name is sometimes spelt in other ways. Professor Rigsby suggests that the usual spelling is now "Yabalum". However I understand the preferred spelling to be "Jabalum". Professor Rigsby suggests that Jabalum was born about 1853. Although this estimate is based on rather tenuous evidence, it is probably reasonably accurate. His birth therefore pre-dated Mein's arrival in the area. According to oral family history, Jabalum was chief of a clan or group. That clan occupied the larger area of which the determination area is part. He is mentioned in early mission records as the father of a child. In 1972 a researcher conducted a lengthy interview with a grandson. There is thus no reason to doubt that Jabalum existed. It seems that his descendants are the only known survivors of that sub-group of the Yidinji people who occupied the determination area prior to 1892. 26 Early maps prepared by government officials and others, offer general support for the claim. They indicate that the Yidinji people or the Yidinji people and the Gunggandji people occupied areas which included the determination area. They include maps drawn by the then Commissioner of Police, W. E. Parry Okeden (1897), by W. E. Roth (1910, but based on 1898 research concerning language distribution), U. McConnell (1939), D. S. Davidson (1938) and L. Sharp (1939). In 1974 Norman B Tindale published his work, 'Aboriginal Tribes of Australia' which has become a standard reference work on the subject. His research also offers some support for the claim, but he appears to have been equivocal concerning the northern areas on Trinity Bay and Trinity Inlet. His field work dated from as early as 1938. Professor Rigsby's report demonstrates that the Mandingalbay Yidinji culture includes a great wealth of folklore concerning geographical features within, and around, the determination area. 27 In this very brief summary I have not done justice to the detail in Professor Rigsby's report, nor to the helpful summary of it provided by Mr Southon in his affidavits and oral evidence. It is an available inference that the Mandingalbay Yidinji people have occupied the determination area continuously since prior to 1770. That is the only matter about which I have felt concern. I am now satisfied in that regard and that it is appropriate to make the consent determination sought by the parties. 35 In the event that the agreement referred to in paragraph (c) of Schedule 4 is not registered on the Register of Indigenous Land Use Agreements within six months of the date of this order or such later time as the Court may order, the matter is to be listed for further directions. 36 Each party to the proceedings is to bear its own costs. They recognise that the Mandingalbay Yidinji People are the lawful holders of native title in the determination area. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. The determination area is shown on the determination plan. To the extent of any inconsistency between the description of the determination area in this Schedule and the determination plan, the description in this Schedule prevails. Note: the location references given in the tables in the Schedules are for ease of reference only and do not form part of the determination. Note: a reference in this determination to a lot number is a reference to the lot on the determination plan as described in the table below. Area Location 1. Part of Lot 111 on NR7962 Giangurra Reserve 2. Lot 36 on AP7416 formerly described as part of Lot 36 on USL9876 Trinity Inlet 3. Part of Lot 34 on USL9876 Trinity Inlet 4. Lot 16 on USL9897 Redbank Creek 5. Part of Lot 933 on AP6360 formerly described as part of Lot 933 FTY934 State Forest 6. | determination of native title native title |
2 The first question is whether the appellants should now be permitted to amend the notice of appeal so as to raise what amounts to a fresh issue in substance. That amendment is opposed and will be refused. A detailed history is necessary to explain why that is so. 3 The case determined by the learned Federal Magistrate was an amended application containing two grounds and associated particulars. The Tribunal exceeded its jurisdiction, in failing to accord the Applicants procedural fairness, as required under section 424A(1) of the Migration Act 1958 . The Refugee Review Tribunal did not follow the proper procedure as required by the Migration Act 1958 . Thus, the procedures that were required by the Act or regulations to be observed in connection with the making of the decision were not observed. Applicant is facing a serious political charge and there is a likelihood of applicant's serious persecution upon his returns. By not dealing with this matter, there was a constructive failure to exercise jurisdiction on the part of the Tribunal, and or lack of procedural fairness. Neither, RRT accepts that claim nor investigate the matter through Australian High Commission, Bangladesh. By not dealing with this matter, there was a constructive failure to exercise jurisdiction on the part of the Tribunal, and or lack of procedural fairness. Notwithstanding that apparent limitation, the learned Federal Magistrate dealt with all of the stated grounds and particulars. At that stage, the only information which was clearly identified as allegedly falling within s 424A of the Act was conventional country information. There is some indication of a contention that the Tribunal's reasoning processes were also caught by that section. Each basis for reliance upon s 424A was rejected by the learned Federal Magistrate and all other grounds were rejected. Constructive failure of jurisdiction going to satisfaction: procedural unfairness. The tribunal exceed its jurisdiction, in failing to accord procedural fairness as required under section 424A(1) of the Migration Act 1958 . Constructive failure of jurisdiction going to satisfaction: misconception of duty. It was not open for the Tribunal to satisfy itself that it would be reasonable for the applicant to relocate. 8 The precise information that it was suggested should have been dealt with as provided for by s 424A could not be discerned from the written and oral submissions on behalf of the appellants. Counsel was simply unable to identify that information. 10 I awaited the judgment of the Full Court in SZEEU & Ors v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCA 214 before coming to my decision and gave the parties the opportunity of making submissions in light of that judgment. Firstly an entirely new point should not be permitted to be raised at this stage of an appeal in judicial review proceedings. Secondly the proposed ground raises a question of fact, namely, what was provided by or on behalf of the appellants to the Tribunal for the purposes of s 424A(3)(b). Counsel for the appellants submitted that it can be deduced from a reading of the decision of the Tribunal, taken with the documents which were before the Tribunal, that it had relied upon material supplied only in the visa application. However, counsel for the Minister correctly points out that that conclusion cannot be drawn in the absence of a transcript of what took place before the Tribunal. If the issue had been raised in the Federal Magistrates Court, the factual issue could and would have been properly investigated. 12 The Federal Magistrates Court exercised jurisdiction to judicially review the decision of the Tribunal. The appeal to this Court is to correct error in the decision of the Federal Magistrates Court. The ground of appeal sought to be relied upon does not relate to any such error. Furthermore, the ground involves a question of fact not raised before the Federal Magistrates Court. The application to amend is misconceived ( Coulton v Holcombe [1986] HCA 33 ; (1986) 162 CLR 1). The application to amend is refused. 13 The consequence is that the case for the appellants stands or falls upon the use by the Tribunal of country information concerning document fraud in Bangladesh without having complied with s 424A in relation to that information. That basis was rejected by the learned Federal Magistrate, based upon Full Court authority in Minister for Immigration and Multicultural and Indigenous Affairs v NAMW [2004] FCAFC 264 ; (2004) 140 FCR 572. Counsel for the Minister submits that authority since then has confirmed that position. It is sufficient to refer to QAAC of 2004 v Refugee Review Tribunal [2005] FCAFC 92 and VJAF v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 178. 14 The appeal must be dismissed. The appellants are to pay the costs of the Minister. As the appeal is to be dismissed there is no need to make any order concerning regularising the parties to the proceeding. | practice and procedure amendment to raise fresh issue on appeal rejected information not about appellant migration migration |
His Honour gave judgment on 29 November 2005 dismissing the application before him as an abuse of the process of the court and making orders preventing the applicants from initiating, without the leave of the court, further proceedings to review the decision of the delegate of the respondent ('the Minister') dated 14 November 2003 and the decision of the Refugee Review Tribunal dated 5 February 2004 and handed down on 25 February 2004. 2 His Honour set out at paragraphs [2] to [7] of his judgment the procedural history of the various matters in which the applicants have sought relief in addition to the two decisions expressly referred to in his Honour's order. They initially applied to the Federal Magistrates Court on 24 March 2004 but that application was summarily dismissed on 5 November 2004 for non-compliance with the court's orders ( SZDCR v Minister for Immigration [2004] FMCA 1094). The applicants sought leave to appeal from that decision by filing an application in this court on 8 November 2004 which Conti J dismissed with costs on 13 May 2004 ( SZDCR v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 712). 3 The applicants then sought special leave to appeal from the High Court of Australia which on 8 September 2005 dismissed the application ( SZDCR v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA Trans 728). 5 The Full Court of this Court in Zubair v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248 ; (2004) 139 FCR 344 at 352-354 [28] - [32] held that where there had been a merits review of the original decision-maker's decision the right of complaint concerning the procedures by which the original decision-maker's decision was obtained became subsumed in the merits review and that it was only errors it the reviewer's decision-making process that were amenable to judicial review on an application such as the present: see too Twist v Randwick Municipal Council [1976] HCA 58 ; (1976) 136 CLR 106 at 116. 6 The applicants were notified by a letter from the registry dated 23 February 2006 that the matter was for hearing today. The applicants' address for service is in the River Haven Caravan Park at Wood Wood in Victoria. Mr Carter, who appears for the Minister has informed me that on previous occasion the applicants have appeared, including before the Federal Magistrate from whose decision this application is brought, notwithstanding an affidavit of the first applicant sworn 5 December 2005 in which he said he was so sick he was not able to attend the hearing. The Federal Magistrates Court file reveals that " Applicant in person " appeared before his Honour at the hearing, although it does not say which of the two applicants was being referred to. 7 The matter was called outside the court today and there was no appearance. I am satisfied that the applicants have had a sufficient time to receive notice of the hearing and to make some form of communication in the event that the hearing was inconvenient because of their location in Victoria. There being no appearance I am of the opinion that I should dismiss the application. 8 The Minister has sought costs fixed in the sum of $750. | no question of principle migration law |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs ("the delegate") to refuse to grant a protection visa to the applicant. 2 The applicant is a citizen of India. He arrived in Australia on 1 September 2005. He entered on a temporary business visa. The visa was granted after he advised immigration authorities that he wished to come to Australia for business discussions on behalf of his employer and that the employer was paying for the trip. He claimed to have a well-founded fear of persecution because of his membership of the Tamil Nadu Liberation Army ("TNLA"). The applicant claimed that he was persecuted by the Indian authorities and the Bharatiya Janata Party ('BJP') for his involvement with the TNLA. He also said that he was under threat by members of the TNLA because he quit the party without their knowledge. The applicant's claims included being arrested by police, having fabricated charges filed against him, suffering economic hardship, being accused of involvement in terrorist incidents, being tortured by police and being forced to go into hiding. The applicant also claimed that he may have problems with the Liberation Tigers of Tamil Eelam ("LTTE") as the applicant took orders from people whom he believed were members of the TNLA but who were actually members of the LTTE. 3 The Tribunal found that the applicant was not truthful about matters which were critical to his claim to be a refugee. He was unable to demonstrate significant knowledge of the TNLA. He provided contradictory information as to his employment over the five years prior to his departure from India. The Tribunal found that the applicant's evidence that, during this period he had at times been unemployed, been in prison and been engaged in casual work was contradicted by information provided by the Secretary of the Indo-Australian Chamber of Commerce and by statements made in the applicant's visa application. The Tribunal was not satisfied that the applicant had a well-founded fear of persecution by reason of his political opinions or other Convention reason should he return to India. 4 The applicant sought judicial review of the Tribunal's decision in the Federal Magistrates Court. His grounds included claims that the decision was not made in good faith; that there had been breaches of the rules of natural justice; that the Tribunal did not consider the reasonableness of relocation; the use of adverse information by the Tribunal; that the Tribunal failed to give proper and adequate reasons; that the Tribunal failed to exercise its jurisdiction; and that the Tribunal failed to consider all claims and issues. 5 The Federal Magistrate dismissed the application under r 44.12(1)(a) of the Federal Magistrates Court Rules ('the Rules') as there was no arguable case raised. In coming to that conclusion, his Honour noted that particulars in support of the grounds were not provided, that the grounds amounted to factual challenges, that the Tribunal did not consider relocation, and that a letter was sent to the applicant which satisfied the Tribunal's obligations under s 424A of the Act. 6 The notice of appeal to this Court was made on the grounds that the Federal Magistrate and the Tribunal did not consider that the applicant's fear was Convention based and that the Tribunal did not appreciate the evidence. 7 An order made under r 44.12(1)(a) of the Rules is an interlocutory decision: see r 44.12(2) Leave to appeal is required. 8 At the hearing of the "appeal" the applicant appeared in person. He had the assistance of an interpreter. He reasserted that the facts upon which his claim for a visa was made were true and that he had no knowledge of how the business visa was obtained. He said that he could not go back to India. 9 The principles to be applied in dealing with an application such as the present are laid down in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. 10 In my opinion the learned Magistrate's decision is not attended with sufficient doubt to warrant reconsideration by this Court. Moreover, were leave to be granted to appeal, there is no prospect that the applicant could succeed on the grounds on which he seeks to rely. 11 The application should be refused with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. | no point of principle migration |
On 18 August 2006 Scarlett FM dismissed with costs an application for judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') handed down on 27 October 2005. 2 Relevantly, the applicant was required to file a notice of appeal within 21 days from the date that judgment the subject of the appeal was pronounced: O 52 r 15(1)(a) of the Federal Court Rules . Accordingly, the applicant was required to file a notice of appeal by 8 September 2006, but instead filed an application for an extension of time six days later on 14 September 2006. The applicant therefore seeks an order under O 52 r 15(2) of the Federal Court Rules granting leave to file and serve a notice of appeal out of time. 4 The Federal Magistrate delivered an ex tempore judgment on 18 August 2006. The applicant appeared in person assisted by an interpreter when judgment was delivered. Whilst I do not consider the explanation advanced by the applicant to account for his delay in filing a notice of appeal adequate, the delay itself is not significant (six days). Accordingly, I will proceed on the basis that if, on consideration of the merits of the appeal, the appeal is bound to fail, I will not allow the application. Alternatively, if there is merit in the proposed grounds of appeal, I will grant the application for an extension of time and consider hearing the appeal instanter. It is therefore necessary, before moving to the merits of the applicant's purported appeal, to set out the background to the matter. The applicant claims he has been discriminated against because of his membership of the Harijan or Untouchable caste and, as a result, claims to fear harm from upper class Hindus. The applicant claims he is one of the few people who are educated, with most members of his caste being illiterate, however his education and employment opportunities have been denied. The applicant claims he joined Panchayat, a local village body, and gave lectures, and as a result has been beaten and threatened by those opposed to the Mandal Commission, a group proposing the reservation of seats in education and government jobs for lower castes. 6 The applicant further asserts his involvement in certain political activities to oppose upper class people in the area. In particular, he claims to have had involvement with, and influence from, the Bahujan Samaj Party and to have organised a rally in 2004 where people were beaten by police. The applicant claims he was arrested but then released being warned not to participate in politics. When preparing for elections in 2005 the applicant claims his car was stopped and he was beaten and threatened. The applicant claims he received a death threat letter and he subsequently moved his family to a relative's village and he left India. The applicant claims that local authorities are controlled by upper class Hindus and they cannot protect him. 7 A delegate of the first respondent refused the application for protection visa and the applicant subsequently applied for a review by the Tribunal of that decision. The Tribunal had regard to independent evidence which indicated the caste system was still operating in India and that a degree of discrimination and occasional oppression is experienced by scheduled caste members. However the independent evidence also demonstrated that the central government has taken active measures to redress discrimination although caste oppression regularly occurs and there is evidence of inter-caste violence. 9 The Tribunal accepted that the applicant may have suffered discrimination as a scheduled caste member and that he was a supporter of the rights of scheduled caste members. The Tribunal also accepted that the applicant had been targeted by local higher caste members. However, despite such discrimination, the Tribunal found that, as the applicant had high school education, it would be reasonable for him to relocate to an urban area to avoid caste conservatism of rural areas and avail himself to affirmative action programs and if necessary, governmental protection. RRT made incorrect statement that my claims are unfounded because I have been able to obtain high school education. There have been a recent case in Haryana where several houses of untouchables have been burnt, Neither the Government gave any protection nor any body else. RRT has suggested that I can settle elsewhere in India, but it is a fact that caste system is widely prevalent in all over India. 12 The Federal Magistrate summarised the applicant's claims (at [3]) and the Tribunal's findings in respect of those claims (at [7]-[9]), and then dealt with each of the grounds in the applicant's amended application. 13 His Honour found that the Tribunal did not fall into jurisdictional error: at [11]-[29], and could not find any apparent jurisdictional error in the Tribunal's decision. 14 Considering evidence given by the applicant to the Tribunal, which indicated that the applicant's inability to relocate was linked to economic difficulties, rather than as a result of his claims that he would suffer persecution, the Federal Magistrate agreed with the Tribunal's finding that relocation to avoid persecution was reasonable. The Federal Magistrate asserted that the Tribunal considered the caste system in rural and urban areas and accepted that the applicant had suffered discrimination and harassment in his local area. They did not however accept that he could not relocate. No jurisdictional error was found to be apparent on the Tribunal decision as consideration was given as to whether there was a well-founded fear of persecution in India as a whole, not just in the local area of the applicant, and whether relocation was appropriate. 15 The Federal Magistrate also found that the Tribunal did not breach s 424A of the Act as independent country information is excluded from the operation of s 424A: s 424A(3)(a). The Tribunal denied the applicant procedural fairness. His Honour not only considered all the grounds of appeal raised by the applicant, but also considered whether the decision contained any jurisdictional error. He concluded that the Tribunal had not. The purported grounds of appeal I now must consider are the same grounds of appeal agitated before the Federal Magistrate. In my opinion, the approach of the Federal Magistrate and his Honour's conclusions were clearly correct. 18 In relation to the first ground, I agree with his Honour that there was no error of law in the Tribunal's finding that the applicant could relocate in India as it found that the persecution claimed to be suffered by the applicant was localised in rural areas. The Tribunal correctly applied the principles identified by Branson J in SYLB v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 87 ALD 498, and assessed the personal considerations of the applicant to find that he could reasonably be expected to relocate within India. Therefore, no error arises in that regard. 19 The second purported ground of appeal alleges that s 424A of the Act was not applied correctly. I agree with the Federal Magistrate's finding that there was no breach by the Tribunal of s 424A. As his Honour found at [25], the information relied upon was independent country information, which falls within the exceptions in s 424A(3)(a) because it is information 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. Furthermore, as his Honour noted, the Tribunal did put matters relating to the independent country information to the applicant at the hearing. 20 The three further grounds were not raised before the Federal Magistrate but can be considered on their merits. The third and fifth purported grounds in substance allege the same error and so I will consider the allegations together. As I have found above, the Tribunal put the independent country information to the applicant at the hearing. Even though it was not required to put such information to the applicant according to the exception in s 424A(3)(a) , the Tribunal clearly put the applicant on notice that it would be considering the independent country information and in these circumstances there can be no breach of procedural fairness or natural justice. 21 Further, I do not need to consider any common law rules relating to natural justice as s 422B of the Act was in force at the time the applicant made his application to the Tribunal on or about 10 June 2005. 22 The fourth ground asserts that the Tribunal's findings were biased. There is no basis upon which I can conclude that the allegation of bias is 'distinctly made and clearly proved': Minister for Immigration & Multicultural Affairs v Jia Legeng [2001] HCA 17 ; (2001) 205 CLR 507 at 531, [69] per Gleeson CJ and Gummow J. There is simply no evidence to support such a contention. I will allow the first respondent to be correctly names at as the Minister for Immigration and Citizenship. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | no point of principle migration |
The Tribunal had affirmed a decision of a delegate of the Minister to refuse to grant a protection visa to the appellant. She arrived in Australia on 24 May 2003. On 24 June 2003 she applied for a Protection (Class XA) visa which was refused by a delegate of the first respondent on 30 June 2003. On 21 July 2003 the appellant then lodged an application for review to the Tribunal. The Tribunal affirmed the delegate's decision. She claimed that since riots in May 1998 she had been afraid to go anywhere without someone by her side. She claimed to have witnesses and experienced unfair and unjust treatment of Chinese by native Indonesians. Her parents had to pay a lot of money to renew their ID and she herself had to pay double the price to renew her passport. She further claimed that she faced difficulty with Muslims if she refused to donate money to them. She cited one particular incident where she refused and the man yelled at her and returned the next couple of days, stating that she was a stingy lady like other Chinese and that she should be ashamed of her religion for not teaching her to be a generous person. She claimed that she would face the same troubles during the next Election Day in 2004. Finally, she stated that the Indonesian authorities discriminated against Chinese. They would receive a report but not do anything about it. 4 Aside from a brief cover letter from the appellant's Migration Agent summarising her claims in her application to the delegate, the appellant did not submit anything further with her review application to the Tribunal. 6 On 18 September 2003 the Tribunal sent the appellant an "invitation to hearing" letter, both to her authorised recipient and to her at her residential address (both by registered post), inviting her to a hearing on 27 October 2003. Neither letter was returned to sender. 7 The Tribunal said that it telephoned the appellant's advisor in early October 2003 on three occasions leaving messages seeking news of the appellant. The telephone calls are not relevant, however, to determine whether the Tribunal complied with the Act. The appellant did not attend the hearing. 8 The Tribunal proceeded to make a decision pursuant to s 426A of the Migration Act 1958 (Cth) (the Act). 9 The Tribunal set out the appellant's claims taken from her protection visa application. In its finding and reasons, the Tribunal considered these claims. 10 The Tribunal said that although it accepted the appellant's claim that she had bad memories of the May 1998 riots, the appellant herself had not suffered serious harm in any outbreaks of rioting in the past. Nevertheless, the Tribunal accepted that the appellant had a real subjective anxiety about whether she might be harmed in the future given the sporadic outbreaks of violence and rioting in which harm had been experienced by ethnic Chinese. The Tribunal went on to note, however, that independent evidence showed that ethnic Chinese were not specifically the targets of systematic harm in Indonesia. The Tribunal was therefore not satisfied that the appellant, on grounds of race, had a well-founded fear of persecution. After further reference to independent country information, the Tribunal concluded that this information did not indicate that authorities in Indonesia were unwilling or incapable of providing protection, even if random rioting in the future could result in harm to the appellant. 11 The Tribunal then considered the appellant's extortion claim. Although the Tribunal recognised that extortion could occur for a Convention reason, it was not satisfied that this was such a case. It found that, in any event, the appellant's evidence did not suggest that she suffered serious harm in dealing with demands for money. 12 The Tribunal concluded that the appellant had not suffered serious discrimination or harm in the past and did not have a real chance of being seriously harmed in the future. It found that Indonesian authorities did not condone attacks on ethnic Chinese. It further found if the appellant returned to Indonesia, she would not face harm or mistreatment amounting to persecution by reason of her ethnicity. She claimed that she had never received the Tribunal's decision from the Tribunal which, as already noted, was handed down on 20 November 2003. The appellant was unrepresented and gave evidence that the application for review sent to the Tribunal had not been signed by her. She also claimed that she did not know what happened to her original protection visa until she was detained by the Department in May 2006. At the suggestion of the Minister and pursuant to Part 12 of the Federal Magistrates Court Rules 2001 (Cth), the Court assigned counsel to assist her in the presentation of her case. 15 After counsel was assigned, an amended application was lodged which abandoned all grounds in the original application. In the amended application the appellant asserted that the application she had lodged for a protection visa was invalid, therefore, pursuant to s 47(3) of the Act, the first respondent through his delegate should have declined to consider the application rather than considering it on its merits, which he did. The appellant therefore claimed that the Tribunal did not have jurisdiction beyond holding that the decision of the first respondent's delegate was invalid and not permitted under s 47(3) of the Act. The appellant claimed that the Tribunal erred in law by considering the application for a protection visa on its merits and by affirming the decision of the delegate of the first respondent. The appellant contended that as the Tribunal's decision was not authorised by the Act, it was infected with jurisdictional error. 16 The appellant's case was that the protection visa application (Form 866) "was invalid". She contended that the statutory declaration in the protection visa application was not completed as required by the directions in Form 866 as she was not aware that she was signing a statutory declaration; the contents were not interpreted for the appellant; and the declaration was not signed before a person who was eligible to witness the statutory declaration. She argued that, in those circumstances, because of the effect of ss 45 and 46 of the Act and reg 2.07 of the Migration Regulations 1994 (Cth) (the Regulations), the appellant had not made a valid application. The application must be made on the relevant form (Form 866). Section 47(3) relevantly provides that the Minister "is not to consider an application that is not a valid application" and s 65(1) provides that the Minister can only consider an application on its merits if a valid application has been made. 17 The appellant did give evidence, however, that the substance of the claims appearing in the typed statement attached to the protection visa application (that she claimed to have never seen before) was correct. 18 The Federal Magistrate held that reg 2.07 only requires substantial compliance with the directions in Form 866, not strict compliance (cf Bal v Minister for Immigration and Multicultural Affairs (2002) 189 ALR 566; SZGJO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 393). The Federal Magistrate held that significantly more than the "bare bones" of the appellant's claims were provided with the protection visa application and that there had therefore been substantial compliance. 19 The Federal Magistrate held that the appellant signed the statutory declaration although she was not aware she was signing a statutory declaration. He found that she did not read or speak English and that the statutory declaration was not translated to her. The Federal Magistrate held that as the appellant had an agent who was authorised to act for her at the time the form was completed and lodged, and that the appellant signed the form in three different places, there was substantial compliance, notwithstanding any deficiencies in the completion of the statutory declaration (cf NAWZ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 199). In addition, he held that Parliament could not have intended such strict compliance, that the deficiencies noted in the statutory declaration would invalidate the application. He found the protection visa application to be valid. There was, therefore, no jurisdictional error. 20 In addition, the Federal Magistrate held that the Tribunal decision was a privative clause decision and, for that reason as well, the application had to be dismissed. That would, of course, follow from his first finding that there was no jurisdictional error. In the further alternative, he held that had he found any jurisdictional error, he would not have been minded to grant relief in the circumstances of the case as "the applicant effectively sat on her hands for three years after she made her protection visa application, doing very little to follow it up. 22 The appellant's notice of appeal was filed in this Court on 3 May 2007. The notice of appeal claims that she had not at that time received a copy of the judgment of the Federal Magistrate and that when she did, she would make a proper affidavit and notice of appeal. The notice of appeal states that she would get legal advice as soon as she had received a copy of the judgment. It further states that she is of the opinion that his Honour failed to take into consideration important issues which she would elaborate on upon receiving the judgment and reading the transcript. 23 No amended notice of appeal and no affidavit have been filed. The applicant appeared before the Federal Magistrate and was present when the Federal Magistrate delivered his ex tempore decision. She therefore had notice of the decision and the reasons for his decision on that date itself. She lodged her notice of appeal in the Federal Court exactly 21 days after this decision was made. Thus it is that the Court is forced to speculate on the issues raised. 24 No error has been demonstrated by the way in which the Tribunal exercised its statutory obligations pursuant to s 425(1) to invite the appellant to a hearing. The Tribunal sent the invitation to hearing notice on 18 September 2003 to the appellant's nominated authorised recipient's address and her own address. As it was sent by post, the appellant was deemed to have received it seven working days after its date (s 441C(4)). By s 425A(3) and reg 4.35D(3), the hearing was not to take place until at least 14 days after the applicant received the hearing invitation. The hearing date of 27 October 2003 complied with those regulatory obligations. 25 The appellant's case before the Federal Magistrate was that her protection visa application was no application because it did not comply with Form 866 and because the statutory declaration was signed before the protection visa application was completed. The Federal Magistrate has found that she did sign the document but could not and did not read it, and it was not translated to her. However, no finding has been made as to what the form contained when she signed it. No finding has been made whether the statutory declaration was taken before an authorised person. 26 However, the Minister argued that the absence of those findings and the findings made by the Federal Magistrate could not lead to the conclusion contended for by the appellant. 27 In this case, there is no suggestion that the final application submitted to the delegate contained other than the substance of the appellant's complaints. This is also not a case like SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 , where the appellant was advised of the hearing and advised not to attend. Although she said she did not receive the invitation to hearing, the evidence was that it was sent to both her agent and herself. The letter sent to her was not returned. 28 The only question in this case is whether the signing of the blank application means that the application was invalid. 29 Section 47(1) of the relevant Act requires the Minister to consider a valid application for a visa. Section 47(3) precludes the Minister from considering an application that is not a valid application. Section 65 requires the Minister, after considering a valid application for a visa, to grant the visa (s 65(1)(a)) or refuse to grant the visa (s 65(1)(b)). Section 46 addresses the requirements for a valid application for a visa. Regulation 2.07(3) of the Regulations provides that an applicant must complete an approved form in accordance with any directions on the form. The prescribed form for a Protection (Class XA) visa is Form 866. That form provides for a statutory declaration to be completed by the applicant. 30 The Minister contended that the failure of the appellant to complete the form did not mean that the application was not valid. Section 98 provides that a non-citizen is taken to have filled out his or her application form "if he or she causes it to be filled in or if it is otherwise filled in on his or her behalf. I think the Minister's contention in that regard must be accepted. The application may be taken to have been filled in by the applicant. 32 The appellant said in her submissions to this Court that she signed the blank application in the presence of the migration agent's secretary. In her evidence before the Federal Magistrate she suggests, without making it clear, that she signed the blank application in the migration agent's presence. The appellant's signature is witnessed by a person who has identified himself or herself as a "JP". The migration agent did not witness the appellant's signature. However, there is no evidence that the migration agent's secretary is not that person or not a "JP". There is, therefore, no evidence that the application was not signed in accordance with the form's own instruction. 33 Even if there were, the Minister says that the decision made by the delegate of the Minister and the Tribunal are still valid. (2) If the Minister deals with a visa application in a way that complies with Subdivision AA, AB and this Subdivision, the Minister is not required to take any other action in dealing with it. It follows that non-compliance by the Minister with s 47(3) does not mean that the decision to refuse to grant the visa is not valid. In Minister for Immigration and Multicultural and Indigenous Affairs v WAIK (2003) 79 ALD 152, the Full Court was concerned with an application for a protection visa which was said to have been signed by a person under the age of 18 and therefore was not a valid application because it was not completed in accordance with the directions on the form (Form 866). In the light of s 69, it cannot be said that the application for a protection visa signed by the Applicant was a nullity simply because he did not complete it in accordance with the directions contained on it. No suggestion was made on behalf of the Applicant that he did not understand the nature of the application or that he did not have the capacity, even if he was under 18, to make an application for a protection visa. The only contention was that, because the application form was not completed in accordance with the directions contained on it, it was not a valid application by reason of the operation of reg 2.07(3) and that, accordingly, the Minister was prohibited, by s 47(2), from considering the application since it was not a valid application. 30 If an application that is not a valid application for the purposes of s 46 is considered pursuant to s 65, the resultant decision is preserved by s 69. The decision of the Minister's delegate purporting to reject the application is a valid decision, even if it involved a contravention of s 47, because the decision was rendered valid by the operation of s 69(1): see Thayananthan v Minister for Immigration and Multicultural Affairs [2001] FCA 831 ; (2001) 113 FCR 297 at 33 [26] and Soondur v Minister for Immigration and Multicultural Affairs [2002] FCAFC 324 ; (2002) 122 FCR 578 at 593 [49] . 31 The Tribunal had jurisdiction to review the decision of the Minister's delegate under s 411(1)(c) because it was a decision to refuse to grant a protection visa. The fact that the Minister was prohibited by s 47(2) from considering the application, assuming that it was not a valid application, does not mean there was no decision within the meaning of s 411(1)(c). Whether or not the Minister was prohibited from considering the application, the Minister's delegate did so and made a decision to refuse a protection visa. There was no jurisdictional error on the part of the Tribunal even if the Applicant was under 18 and the application was not a valid application within the meaning of s 46 of the Act. 35 A similar result was reached in NAWZ v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 199. It is unlikely to have been the purpose of the legislation: cf Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 390-391; to require the automatic invalidity of a visa application that an applicant has caused another to complete: cf s 98; but which is unsigned, for example, because of the paralysis of the applicant or, for that matter, of the oversight of the applicant or of his or her agent: cf Ly v Minister for Immigration and Multicultural Affairs [2000] FCA 15 at [32] . 18 We do not consider that the irregular manner of filling in and signing of the false application resulted in the invalidity of the application. It was a false application but it was, in formal terms, a valid application. Substantial compliance was sufficient: Bal v Minister for Immigration & Multicultural Affairs 189 ALR 156; Wu v Minister for Immigration and Ethnic Affairs (1996) 64 FCR 245. 37 It follows that the appellant's application was a valid application. It follows that both the delegate's decision and the Tribunal's decision on review were authorised by the Act. That was the conclusion of the Federal Magistrate. No error has been demonstrated. 38 The appeal must be dismissed and the appellant must pay the respondent's 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 Lander. | appeal from a decision of a federal magistrate non-attendance at hearing whether the protection visa application was invalid whether the tribunal's decision was authorised by the act appeal dismissed. migration |
They provide members with indemnity for claims arising from the members' medical practices. Through subsidiaries, (Australasian Medical Insurance Limited (AMIL) and Professional Indemnity Insurance Company Australia Pty Ltd (PIICA) respectively), they have since 2003 provided indemnity to their members under contracts of insurance. It is now proposed that United and MDAV amalgamate (the word they use is "merge") their respective operations through schemes of arrangement under the Corporations Act 2001 (Cth) and a scheme under the Insurance Act 1973 (Cth). This application is concerned only with the Corporations Act schemes and is for an order for the convening of meetings of the members of United and MDAV to consider the schemes. 2 The nature of the schemes can briefly be described. A new company is to be incorporated. Under the Corporations Act schemes the current members of United and MDAV will become members of the new company and United and MDAV will become its subsidiaries. This common enough arrangement would be straightforward in the case of companies limited by shares. The new company would acquire the shares of the existing companies from their shareholders who, in exchange, would receive shares in the new company. With companies limited by guarantee what is required is a little more complicated. Special provision must be made in the constitution of the new company for the existing United and MDAV members to become its members and alterations are required to the constitutions of United and MDAV for them to become subsidiaries of the new company. These matters will be attended to outside the schemes. The next step is for the undertaking and property, but not the liabilities, of MDAV to be transferred to United. A fund will be established sufficient to meet the claims of MDAV's trade creditors. The scheme proposed under the Insurance Act will result in the transfer of the insurance portfolio of PIICA to AMIL. 3 The Corporations Act schemes in fact consist of two arrangements, one between each company and its own members. It used to be the practice to require separate applications or petitions to be filed, one for each company, which would then be heard together as a matter of course. This undesirable practice, which apart from adding unnecessarily to the costs ran the risk of an appeal from one order only, has happily fallen by the wayside. If each company wishes to be separately represented, as is the situation here, that can be accommodated as the requirement that there be one legal representative on the plaintiff's side is simply a rule of practice that can give way to the demands of fairness. 4 When the application was first mentioned several weeks ago, I raised with counsel a number of matters of concern. One was with the terms of the draft scheme of arrangement. Another was the contents of the explanatory statement. It is not necessary to go into the detail. It is sufficient to record that these matters have been attended to in a way which, I think, is satisfactory. 5 A third concern was whether it was necessary to convene a meeting of the creditors of MDAV. The scheme of arrangement provided for the discharge of the debts due by MDAV, with United being substituted as the debtor. I queried whether this involved a scheme between MDAV and its creditors. The point no longer arises as it is no longer proposed to release MDAV from any existing liabilities. While its assets are still to be transferred to United, that company will indemnify MDAV against all claims. Moreover, at my suggestion, a fund will be established out of which the claims of MDAV's trade creditors will be satisfied as occurred in Re Sandwell Park Colliery Co Ltd [1914] 1 Ch 589. 6 For the record, however, I should indicate that, on further reflection, I have come to the view that the original proposal did not involve a scheme between MDAV and its creditors. That company only proposed a scheme between itself and its members. If an order were in due course made approving the scheme, the order would only bind the members. It will, of course, be necessary at some stage to bind creditors. For that purpose MDAV must apply for appropriate orders under s 413 of the Corporations Act . That is how the parties proceeded in In re Star Tea Co Ltd [1930] WN 4 and Re Clydesdale Bank Ltd [1950] SC 30, although the judgment in the latter case may be better understood on this point if reference is made to the summary of counsel's argument reported in the Scots Law Times ([1950] SLT 123). 7 The final point raised on the last occasion concerned classes. Section 411 of the Corporations Act authorises the convening of meetings of members or classes of members to consider a proposed scheme. If meetings of proper classes are not held the court will not sanction the scheme, so great care must be taken to ensure that the correct meetings are held. 8 For a long time the practice has been to leave it to the company to decide whether there should be meetings of classes of members or classes of creditors. If meetings were wrongly convened that was dealt with at the hearing to approve the scheme. In England there was a practice note to that effect: Practice Note [1934] WN 142. In Victoria see Nordic Bank Plc v International Harvester Australia Ltd [1983] 2 VR 298, 303. 9 The practice was strongly criticised by Chadwick LJ in Re Hawk Insurance Co Ltd [2001] EWCA Civ 241 ; [2001] 2 BCLC 480. With respect, I agree with his criticism. In my view the judge hearing the application for meetings should at least consider the question of classes. In some cases, when notice can be given of what is proposed, any dispute could be resolved at the first hearing. If notice is impossible, and I accept that in many cases it may be either impossible or impracticable to give notice, the judge should still form a preliminary view on the issue notwithstanding that his or her view might change at the hearing of the application for approval. That is also what Chadwick LJ had in mind in Re Hawk Insurance Co Ltd . 10 I raise the question of classes because of a concern that some members might be differently affected by the schemes, in particular some members but not others might be required to pay a higher premium for insurance if the schemes were adopted. Having considered the matter further I am presently satisfied that I raised a false issue for reasons I will now explain. Of course nothing I say will bind any member who, in due course, wishes to pursue the point. Moreover, ASIC, which had been given notice of the application, said it may argue this issue at the second hearing. 11 The leading case on classes is Sovereign Life Assurance Co v Dodd [1892] 2 QB 573. According to Bowen LJ (at 583) "the word 'class' is vague and to find out what is meant by it we must look at the scope of the section, which is a section enabling the Court to order a meeting of a class of creditors to be called. It seems plain that we must give such a meaning to the term 'class' as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest. In In the Matter of Chevron (Sydney) Ltd [1963] VR 249 Adam J said at 255 that debenture stockholders were in the same class "despite the differing considerations which may influence them" in voting for the scheme. In Re Landmark Corporation Ltd (in liq) [1968] 1 NSWR 759 Street J followed Adam J's approach holding that subsidiary companies of the scheme company were correctly included in the general class of unsecured creditors, despite their obvious additional interests. The test is not similar to that applied to a person in a fiduciary position who is suggested to have some conflicting interest. The test is rather one of whether or not the persons who, prima facie, appear to constitute the class of unsecured creditors should be dissected into separate classes by reason of some particular matter so affecting the rights of some as to render it impossible for them to pursue their own interests concurrently with their participating in the pursuit of the interests of the class of which they appear to be members. 14 During submissions I raised another point on classes. The membership of both United and MDAV is divided into categories, to use a neutral term. Although the constitution of each is worded differently, the position is roughly the same. United has two categories of member, referred to as "ordinary members" and "affiliate members". The principal difference between the two is that an ordinary member is required to guarantee the obligations of United (to a nominal amount), is liable to make calls for contributions of funds up to an amount equal to his annual fee and is able to speak and vote at all meetings. An affiliate member, on the other hand, is not required to guarantee the obligations of United, is not liable to meet any calls for contribution of funds and has no right to vote. On a winding up there is a measure of equality. Strictly speaking, the constitution of United does permit a distribution of the net assets of the winding up to ordinary members if the assets cannot be given to another institution which has the same or similar objects as United. The chance of a distribution to members is, however, so slight that I propose to discount it for present purposes. As regards MDAV, there are three categories of member, medical practitioners, companies that employ medical practitioners and students enrolled in a faculty of medicine. Medical practitioners have rights similar to those of ordinary members of United; companies and students are similar to affiliate members. No member is entitled to receive a distribution upon the winding up of the company. 15 The first question that obviously arises is whether the different categories of member constitute different classes for the purposes of s 411. No doubt the different characteristics may influence them to vote differently on the proposed schemes. But, as the cases show, this does not put them into different categories. Adopting the approach of Chadwick LJ in Re Hawk Insurance Co Ltd the question to be answered is whether the rights of the members who are to be bound by the schemes are "so dissimilar as to make it impossible for them to consult together with a view to their common interest". If the answer is in the affirmative then it will be necessary to have a separate meeting of each class. Tentatively, I am of the view that while there may be different categories of membership there is but one class. I bear in mind that any overzealous subdivision may give a small group a right of veto that would defeat the basic object of the provisions dealing with schemes of arrangement which is to enable large groups to achieve a compromise or effect an arrangement: Nordic Bank Plc v International Harvester Australia Ltd [1983] 2 VR 298, 301. 16 I observe that, in keeping with the decision in Re NFU Development Trust Ltd [1972] 1 WLR 1548, it is proposed that at each scheme meeting each member is to be given one vote. The underlying assumption is that each member has, qua his or her membership, the same financial stake in the company. In a general sense that assumption is true, particularly on a winding up. On the other hand, the assumption ignores the fact that ordinary members may be required to make contribution to the funds of their company, albeit to a small extent, and may also liable on their respective guarantees, again to a small extent. It is not clear whether this difference is sufficient to require a change in the "one member one vote" formula. I would not wish to form any concluded view in the absence of argument. For the purposes of the proposed meetings it is not unreasonable for me to indicate that if something other than a "one member one vote" formula were adopted, it could only be that ordinary members be given greater voting rights. 17 ASIC drew attention to a problem concerning the financial information relating to the net assets of the new group that appears in the draft explanatory statement. It noted, and it appears to be common ground, that the information is simply the aggregate of the assets and liabilities of the United group and the assets and liabilities of the MDAV group as at 31 December 2006, subject to some adjustments allowing for differences in accounting policies. The problem identified by ASIC is that the underlying actuarial assumptions, particularly those leading to the calculation of liabilities, are different in the case of each company. Hence, simply adding the assets and liabilities may present a false picture. 18 I think this is a valid criticism of the manner in which the figures are presented. However, the problem is capable of being cured by the addition to the explanatory statement of a note explaining the problem and making some observation about its impact. I have been shown a proposed new paragraph to be added to the explanatory statement and am satisfied that it fairly explains to the reader the true position. 19 Finally I should note that during the course of the hearing this morning there were further changes made to the scheme documents. None were of any great moment but I should mention that there were changes to the conditions to be satisfied before the schemes, if approved, come into effect. The scope of several conditions was unclear and I suggested they be deleted. Moreover, I wanted to be sure the conditions were of a kind that would be satisfied before the schemes came into operation on the lodgement with ASIC of a copy of the approving order. The schemes are now in a form which are I think appropriate to go to members. So also is the explanatory statement which I propose to approve. 20 There will be orders substantially in accordance with the minutes submitted by the plaintiffs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice FinkelsteinJ. | scheme of arrangement amalgamation of two companies two schemes single application companies limited by guarantee different categories of member whether separate classes corporations |
That Court dismissed an application seeking to review a decision of the Refugee Review Tribunal. (2) Notwithstanding anything in the preceding subrule, the Court or a Judge for special reasons may at any time give leave to file and serve a notice of appeal . Notwithstanding the shortness of the extension sought, the Application is opposed. It is submitted on behalf of the Minister that there is no satisfactory explanation as to why the appeal was not filed within time. 4 There is unquestionably a discretion to extend time if " special reasons " be shown. That expression in r 15(2) describes a flexible discretionary power, but a power requiring an applicant to nonetheless justify a departure from the ordinary rule prescribing a period of 21 days: Jess v Scott (1986) 12 FCR 187. It would require something very persuasive indeed to justify a grant of leave after, for example, a year; equally, it may be said, something much less significant might justify leave where a party is a few days late. "Special reasons" must be understood in a sense capable of accommodating both types of situation. It is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served. 6 Had consideration been confined simply to the short extension of time required, the discretion could well have been exercised favourably to the Applicant. The explanation provided is, with respect, not satisfactory. But, as was recognised by the Full Court, a less persuasive explanation may be required when the extension required is for a comparatively short period of time. 7 Consideration, however, is not confined to such matters. Consideration may also be given to the prospects of success of the Applicant should an extension be granted: W105/99A v Minister for Immigration & Multicultural Affairs [2001] FCA 1786 at [13] ; WACF v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1385 , 79 ALD 154; Kalanje v Minister for Immigration & Multicultural Affairs [2006] FCA 1618. 8 In the present proceedings, it is not considered that any appeal has such prospects of success as to warrant granting an extension of time. The decision of the Refugee Review Tribunal was founded primarily upon adverse findings as to credit, being findings open to the Tribunal. The Tribunal does not accept on the evidence before it that the Applicant's travel to the UAE was other than employment-motivated. No self-evident error is exposed upon a reading of the decision of the Tribunal or, more relevantly, the decision of the Federal Magistrate. The first two submissions are rejected as an impermissible attempt to challenge findings of fact. That was a matter for the Tribunal and not open to challenge before the Federal Magistrate or this Court. The submission as to a breach of s 424A is rejected because, as found by the Federal Magistrate, the " information " in issue falls within s 424A(3)(a). 11 The Applicant appeared unrepresented before this Court this morning, although he did have the benefit of an interpreter. He did not add to the written submissions which had been filed on his behalf. 12 Accordingly, leave to extend time is refused. The Application to extend time for the filing of a Notice of Appeal is refused. 2. The Applicant is to pay the costs of the First Respondent. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | federal court rules 1979 (cth), o 52, r 15 application for extension of time application dismissed no prospects of success migration |
Those shareholders allege (amongst other things) that AWB contravened the Corporations Act 2001 (Cth) and other Commonwealth legislation by concealing from the Australian stock market and from relevant authorities the fact that it had paid inland transportation fees and other payments in respect of wheat shipments to Iraq which were inflated and which exceeded the real costs to AWB of transporting its wheat in Iraq in order to make funds available to entities and persons associated with the Government of Iraq in breach of UN sanctions which were then in force. The initial trial in the proceedings is fixed to commence on 30 November 2009. AWB served a subpoena upon the Office of National Assessments ( the ONA ) requiring the production of various documents and reports. The ONA was established in 1977 by the Office of National Assessments Act 1977 (Cth) ( the ONA Act ). The ONA is an independent intelligence agency which is directly accountable to the Prime Minister. The ONA has applied to the Court seeking to be excused from being required to produce any of the documents called for by the AWB subpoena. It contends that it ought to be excused from compliance because all of the documents called for under the subpoena are protected by public interest immunity. AWB suggests that the masking of portions of those reports should be governed by the same principles that were applied to the masking of portions of 15 of those reports which were the subject of an agreed distillation in Mr Cole's final report (at [30.112] of the Report) ( the Cole distillation ). In other words, AWB ultimately submitted that the Court should require the production of: AWB is prepared to agree to limit access in the first instance to a small number of named lawyers in its legal team. It is also prepared to accept any sensible confidentiality regime in respect of the documents. The ONA maintains its opposition to the production of all of the 62 reports even in redacted form. It also opposes production of the distribution lists. The issues which arise for determination are: These issues overlap to a large extent. I will consider them together but will address the substance of each of them in that consideration. The ONA comprises the Director-General and the staff of the ONA. The ONA provides to the Prime Minister and to other ministers comprising the National Security Committee of Cabinet, advice and assessments on international political, strategic and economic developments which might affect Australia's national interests. Information obtained by the ONA comes from many sources. The ONA draws on information provided by other intelligence agencies (including foreign agencies) and material obtained from open sources. It maintains close ongoing contact with intelligence agencies of several other countries. The ONA is also responsible for the co-ordination and evaluation of Australia's foreign intelligence activities. It is in constant contact with Australia's other foreign intelligence agencies. He testified that he had read the 62 reports. He has only recently been appointed to his current position and was not qualified to give evidence dealing with the circumstances in which those reports were created. He had, however, worked in the ONA for approximately eight years in two separate periods between 1978 and 1989 and had obtained other relevant advisory experience at the highest levels of government in the period 1991 to 1996. The ONA also relied upon two further affidavits sworn by persons other than the Director-General which were read by me but otherwise kept confidential. These affidavits were not made available to AWB or to its legal representatives. For reasons briefly explained at the time when I made my ruling, I decided that these additional affidavits contained confidential information which ought not be disclosed, even to AWB's legal representatives. With the consent of the ONA, I prepared a short document describing in general terms the nature of the contents of the two confidential affidavits. That document, which became confidential Exhibit B, was shown to Counsel for AWB and to its lead solicitor in Court at the time of the hearing upon terms that the contents of Exhibit B not be disclosed. I have read and propose to take into account the contents of the two confidential affidavits. The Director-General said that he was mindful of the matters alleged in pars 26, 27(a) and 28(a) of the Second Further Amended Statement of Claim when he read the 62 reports. Those paragraphs of the Statement of Claim (together with the balance of par 28) and the corresponding paragraphs in AWB's Defence are the paragraphs in the pleadings relied upon by AWB as justifying production of the documents specified in its subpoena. In those paragraphs, the applicants in the proceedings assert that the true arrangements between AWB and its Iraqi purchasers involving the payment of inflated transport fees were concealed from and not known by the Department of Foreign Affairs and Trade ( DFAT ). AWB wishes to argue that, contrary to that allegation, DFAT was aware of these arrangements at all relevant times. I shall deal with the pleadings in a little more detail later in these reasons. The evidence before me showed that, on 24 February 2006, the 62 reports were furnished by the ONA to certain lawyers assisting the Cole Inquiry in response to Notices to Produce issued by the Commissioner. The ONA took that course on the basis that the contents of those reports would be kept confidential. The Cole Inquiry lawyers who were provided with those reports held a top secret security clearance which enabled them to read the 62 reports without thereby breaching the relevant Australian Government security protocols. The lawyers read all of the 62 reports. They considered 15 of the 62 reports to be sufficiently important to the Inquiry to be shown to Commissioner Cole. They formed the view that the remaining 47 reports were not sufficiently important to be shown to the Commissioner. The 15 reports which were identified as reports to be shown to Mr Cole were then redacted in consultation with the ONA. The 15 redacted reports were then provided to Mr Cole. He did not see any of the remaining 47 reports. Mr Cole, in consultation with the ONA, then produced a distillation of the 15 redacted reports which he had read and considered. That distillation is found at [30.112] of his final report. Mr Cole's final report is publicly available. None of the 62 reports is publicly available. Subparagraphs 1 to 9 of [30.112] comprise Mr Cole's distillation of the 15 redacted reports which were made available to him in 2006. He said that the material was all unassessed intelligence. The reports were part of 750,000 unassessed intelligence reports distributed within the Australian Government in the period 1998---2004. Such reports are not regarded by those who read them as containing "proven facts". To achieve that status, they would need to be assessed by qualified, experienced and competent analysts (ie put into context, examined, weighed and verified). Sources are never revealed in circulated unassessed intelligence reports. At pars 18 and 19 of his affidavit sworn on 17 August 2009, the Director-General said: Australia's foreign intelligence agencies are generally prohibited by law from collecting intelligence on Australian citizens, permanent residents or corporate entities either in Australia or overseas. It is not generally the task of Australian intelligence agencies to monitor the behaviour of Australian companies. Where foreign intelligence results in the collection of incidental information about Australians, the standard practice is that the identity of the Australians or Australian bodies in intelligence reports is usually concealed through the use of generic terms such as 'a named Australian' or 'a named Australian entity. ' None of the subpoenaed documents explicitly mentions the AWB, or any other Australian company, making improper payments to the Iraqi regime. Only one document refers to an Australian company. None of the documents specifies the wheat trade, with one exception. The exception was a November 2003 report which suggested that most large companies had refused to pay Iraqi imposed surcharges, citing as an example, wheat imports from Australia. Nothing in the subpoenaed documents could, in my view, be interpreted by an assessment agency as showing that any Australian company was engaged in making illicit payments to Iraq. Forty-five of the 62 reports are classified Top Secret . The remaining 17 are classified Secret . These classifications significantly restrict access to those documents within the Government and prevent disclosure outside Government circles. Many of the documents carry other classifications which cannot themselves be disclosed. Three grounds of substance are advanced by the ONA in support of its claim for public interest immunity. These are: (a) Disclosure of the contents of the 62 reports would prejudice Australia's national security; (b) Disclosure would damage our relations with other countries; and (c) Disclosure would enable interested parties to conduct what is called in the intelligence community, a mosaic analysis , which might lead to an accurate picture of a relevant state of affairs being conveyed accidentally because an informed and interested reader of disparate pieces of information may be able to piece together a picture which would not readily present itself to less informed and less interested persons. Mosaic analysis involves combining pieces of information to enable a "picture" to emerge from which inferences can be drawn by targets, or other persons of interest, about matters not otherwise known to them. Some of the pieces of information may appear to be disparate and/or benign; and specific (but important) items of information may only be known by the target(s) or other persons of interest (making it difficult to precisely assess the risk posed by mosaic analysis in any particular scenario). However, in my opinion there is a very high risk that, disclosure of parts of the subpoenaed documents [referring to the 62 reports], in conjunction with other facts already known to relevant persons, would enable them to draw reliable inferences in relation to sources and methods of intelligence collection of Australia's intelligence partners. All relevant intelligence agencies within the Australian intelligence community were consulted in order to ensure that the risk of a successful mosaic analysis being undertaken by persons likely to act contrary to the interests of Australia was minimised. In addition, there was a need to consult closely with the overseas foreign intelligence agencies which had supplied the intelligence or had an interest in the supply of that intelligence to Australian intelligence agencies in order to ensure that the concerns of those foreign agencies were met as far as possible. Drafts were held under tight security. Nonetheless, there was considerable displeasure expressed by the foreign intelligence agencies that any disclosure was being undertaken for the purposes of the Cole Inquiry. The Director-General made the point in his evidence that disclosure in 2006 for the purposes of the Cole Inquiry constituted a very different disclosure from that which is now being sought. The disclosure sought by AWB is for the purposes of a private civil action involving claims for money and not, for example, the liberty of any person. Nor is it sought for the purpose of satisfying the reasonable and proper demands of the United Nations, as was the case with the Cole Inquiry. The Director-General made the further point that, in 2005---2006, the former Prime Minister, Mr Howard, had requested Australia's intelligence agencies to provide whatever assistance they could to the Cole Inquiry given that the United Nations had more or less demanded that national authorities take steps to prevent illegal practices being carried on by their citizens in relation to the supply of food under United Nations Food Programs. The Director-General expressed the view that Australia's intelligence partners would be extremely anxious and displeased if any of the information contained in the 62 reports were disclosed for the purposes of civil litigation between private citizens and that there was a very real prospect that, should such disclosure be ordered, those intelligence partners may be less inclined to provide intelligence to Australia's intelligence and law enforcement agencies in the future. For reasons explained in the confidential affidavits, this would have serious consequences for Australian's national security. The evidence also demonstrated that 60 of the 62 reports under consideration were distributed to DFAT. The contents of the confidential affidavits provided detailed support for the Director-General's claims. In particular, they provided persuasive evidence to the effect that the disclosure of the contents of the 62 reports would be likely to: It is neither necessary nor desirable for present purposes for me to reveal more of the contents of the confidential affidavits. I have not been given any of the 62 reports. For that reason, I have not looked at any of those reports. The ONA submitted that I should not require the production of any of those reports for inspection by me unless I form the view at this stage that its claims have probably not been made good and that I need to inspect the documents in order to decide finally whether the 62 reports or some of them should be made available to AWB's legal representatives. This submission correctly encapsulates the relevant principles. As the foundation of its stated forensic purpose, AWB points to pars 26, 27(a) and 28 of the Second Further Amended Statement of Claim and to pars 26, 27, 28 and 29 of its Amended Defence. In pars 26, 27(a) and 28 of the Second Further Amended Statement of Claim, the applicants allege that: In its defence, AWB denies the substance of these allegations. However, it admits that, during the period between 11 March 2002 and 13 January 2006, it did not disclose publicly the material which the applicants allege it concealed and contends that it was not under any obligation to disclose publicly those facts and matters. It also relies upon a number of matters in support of an allegation that this Court cannot and, in any event, ought not, exercise any jurisdiction in respect of any of the applicants' claims. Counsel for AWB informed me that his client was seeking the 62 reports and the distribution lists in order to demonstrate that DFAT had knowledge of the nature and extent of the payments made by AWB which the applicants assert were concealed. Counsel made clear that, in addition, some of the early wheat contracts that were submitted to DFAT by AWB did, in fact, explicitly disclose that transport fees were being paid. He emphasised, however, that AWB was not in a position to assert that it told DFAT of all of the relevant payments and that, for this reason, AWB needed to obtain evidence that would establish or tend to establish that DFAT knew of the payments, in any event. It was AWB's contention that the 62 reports comprised a good collection of documents which were likely to contain information and material that might prove or tend to prove that DFAT had the requisite knowledge. AWB's contentions in this regard are advanced as matters of defence directed to the allegations made by the applicants in the proceedings to the effect that DFAT (and, in particular, the relevant decision-makers in respect of the approvals given to AWB) was not aware of the nature and extent of the impugned payments. AWB submitted that it was rational and sensible for it to assume that, at trial, the applicants will be able to adduce sufficient evidence to discharge at least an initial evidentiary burden directed to proving the negative propositions which they have pleaded so that, unless AWB were able to adduce evidence to the contrary either in cross-examination of witnesses called by the applicants or in documents sought to be tendered as part of AWB's own case, it would run the risk that the Court might accept the contentions being advanced by the applicants. AWB submitted that the allegations made in pars 26, 27(a) and 28 of the Second Further Amended Statement of Claim raised significant issues in the case and that it should be allowed to defend itself against those allegations by having access to the 62 reports and to the distribution lists. AWB submitted that it required those reports in order to test the evidence which the applicants are likely to adduce in support of the allegations made in those paragraphs of the Statement of Claim. The applicants' claim is very substantial and has great significance for all parties to the proceedings. AWB submitted that it will not be able to tender the Cole distillation at the trial and that, if it wanted to prove the matters set out in that distillation, it would need to have available for tender the 15 redacted reports which underpin the Cole distillation. Counsel submitted that those 15 reports would be admissible as business records, even in their redacted form. For these reasons, AWB argued that it was entitled to require the production of the 62 reports and the distribution lists. I accept that the allegations made by the applicants in pars 26, 27(a) and 28 of the Statement of Claim are an important part of the case which the applicants will seek to make against AWB at trial. AWB has therefore satisfied me that its purpose in seeking production of the 62 reports and the distribution lists is legitimate and actuated by a genuine desire to bring to Court documents which might assist it to defend itself against the serious and significant allegations made by the applicants in pars 26, 27(a) and 28 of the Statement of Claim. Had the ONA not co-operated with the Cole Inquiry in the way that it did and had the Cole distillation not been produced and made public, I would have answered this question: Yes. But, in the events which have happened, I answer the question: No. My conclusion is that the ONA should be required to produce to the Court for inspection by me in the first instance the 15 redacted reports furnished to Mr Cole, and only those reports. It should also be required to produce all documents which show or tend to show to whom in DFAT each of those 15 reports was sent and when each such report was sent to such persons. I will then inspect all of the documents produced to me in order to determine whether the ONA's claim that the documents are protected by public interest immunity should be upheld. At this stage, I am not persuaded that the claim has been made out in respect of those documents although, after inspecting them, I may be so satisfied. I am, however, satisfied that the ONA's claim to be excused from producing the remaining 47 intelligence reports and those distribution lists which relate only to those 47 reports has been made out. I will make appropriate orders giving effect to that conclusion. This conclusion obviates the need to consider whether I could or should order the ONA to undertake a masking exercise in respect of these 47 reports. I will now state my reasons for these conclusions. The claim of public interest immunity is being made in order to justify the excusing order which the ONA seeks. Such a claim is governed by the common law ( Esso Australia Resources Ltd v Commissioner of Taxation [1998] FCA 1655 ; (1998) 83 FCR 511 at 516519 and at 564---566; Northern Territory v GPAO [1999] HCA 8 ; (1999) 196 CLR 553 at [16] (p 571); [135] (p 606); [199] (p 624); and R v Young [1999] NSWCCA 166 ; (1999) 46 NSWLR 681 at [37] (p 691); [50] (p 692); [217] (p 721); [318] at (p 741); and [345] (p 747)). If documents are ordered to be produced, the future disposition of them will fall to be controlled by the Court. Should any party seek to tender any of them or any part of any of them at the trial, any claim for public interest immunity made by the ONA at that point will be governed by s 130 of the Evidence Act 1995 (Cth). My decision in relation to the present application by the ONA may be very relevant and highly persuasive in relation to a public interest immunity claim made in respect of a proposed tender at trial but it would not necessarily be determinative of such a claim. Where an objection to the production of documents in answer to a subpoena is based upon a claim of public interest immunity, the usual practice---established many years ago---has been for the grounds of the claim to be set out and explained in an affidavit made by either the Minister who is the political head of the particular department concerned or the Secretary of that department ( Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1 at 43). The weight to be afforded to that affidavit is governed to some degree by the extent of the knowledge which the deponent possesses concerning the documents which are the subject of the claim ( Sankey v Whitlam 142 CLR at 44). The knowledge of those documents which must be considered comprises not only knowledge of the contents of the documents but also knowledge of the circumstances in which they came into existence. When the claim is based partly or wholly on national security grounds, very considerable weight must be given to the views of the responsible Minister or the permanent head. In the present case, because we live in dangerous times and matters of national security are at the forefront of the ONA's responsibilities, very considerable weight must be given to the views of the Director-General expressed, as they were, on his oath ( Alister v The Queen (1984) 154 CLR 404 at 435). The Director-General of the ONA has read all of the 62 reports. He has also read the confidential affidavits (one, as sworn, and the other in final draft form, but not yet sworn). It is apparent from the terms of his affidavits that the Director-General has also relied upon information conveyed to him by his staff as to the circumstances in which the Cole distillation came into existence. It is generally to be expected in cases such as the present that the relevant deponent will testify that he has read all of the documents for which the immunity is claimed ( Sankey v Whitlam 142 CLR at 43---44; 96 and 108). The deponent will also need to explain why the disclosure of the documents is detrimental to the proper functioning of the Executive Government and of the Public Service (if appropriate). At [27] above, I have summarised the bases upon which the ONA seeks to claim public interest immunity in respect of the 62 reports and the distribution lists. Claims of public interest immunity require the Court to decide whether the administration of justice will be impaired or perhaps even frustrated by the withholding of relevant evidence in favour of a greater public interest, namely, that harm shall not be done to the nation or the Public Service by the disclosure of the material in contest ( Conway v Rimmer [1968] UKHL 2 ; [1968] AC 910 at 940; Rogers v Home Department State Secretary [1973] AC 388 at 400; 406---407; Sankey v Whitlam 142 CLR at 38---39; 60; and 94; Alister v The Queen 154 CLR 404 at 412; and 434; and Commonwealth v Northern Land Council [1993] HCA 24 ; (1993) 176 CLR 604 at 616---617). That is whether the documents in question are or may be of sufficient importance to the case that the court should undertake the exercise, which may involve their inspection, of balancing the public interest in withholding production against the public interest in the administration of justice. The Commonwealth submitted that before the "balancing process" described in Sankey v Whitlam was undertaken this Court had to be satisfied, as a matter of likelihood rather than mere speculation, that the materials in question would contain evidence for tender at trial. The Council denied there was any such requirement imposed upon it. We agree there is no requirement in the terms contended for by the Commonwealth. Indeed, only one of the documents refers to an Australian company at all. The only document which mentions the wheat trade tends to suggest that some companies had refused to pay the Iraqi imposed surcharges citing, as an example, wheat imports from Australia. Forty-seven of the 62 reports were not considered by lawyers assisting the Cole Inquiry to be sufficiently important to be shown to the Commissioner. Yet the Cole distillation makes clear that Commissioner Cole was very much focussed on the extent of DFAT's knowledge of the impugned payments and the basis upon which those payments had been made. As Counsel for AWB submitted, the 15 redacted reports shown to Mr Cole seem to support the proposition that unassessed intelligence reports did indicate that Alia (the company said to have received the surcharge payments from AWB) received fees in Jordan for the discharge and inland transport within Iraq of goods purchased by Iraq under the Oil-for-Food Program. It received these fees as agent for the Iraqi government. The Cole distillation also suggested, if only by inference, that all essential food items imported into Iraq under the Oil-for-Food Program were subjected to the requirement that the surcharge fees be paid. The 15 redacted reports seem to contain information and material that is much closer to the type of material AWB seeks in order to support its case. Those reports cover the entire period with which the present proceedings are concerned. It seems to me that it is sufficiently "on the cards" that there may be something in the 15 redacted reports shown to Mr Cole which, either alone or in combination with other evidence, might advance the case which AWB seeks to put in answer to the allegations made against it by the applicants in the present proceedings in pars 26, 27(a) and 28 of the Second Further Amended Statement of Claim. The "on the cards" test is explained by the NSW Court of Appeal in Attorney-General (NSW) v Chidgey (2008) 182 A Crim R 536 at [58]---[80]. However, given that the remaining 47 reports were read and considered by lawyers assisting the Cole Inquiry and not thought by them to be of sufficient relevance and importance to be passed on to the Commissioner himself for his consideration and given the clear evidence of the Director-General set out in pars 18 and 19 of his affidavit sworn on 17 August 2009 (which I have extracted in full at [25] above), I do not think that it can fairly be said that it is "on the cards" that there will be information and material in the remaining 47 reports which might advance AWB's case in defence of the allegations made in pars 26, 27(a) and 28 of the Statement of Claim. Accordingly, in my view, AWB has failed to demonstrate that the 47 reports not seen by Mr Cole are or may be of sufficient importance to its case that the Court should undertake the exercise of balancing the public interest in withholding production against the public interest in the administration of justice. Accordingly, it has failed to satisfy the threshold question posed in respect of those 47 reports. Because I have come to the conclusion that AWB has failed to satisfy the threshold question in respect of the 47 reports not seen by Mr Cole, it is unnecessary and inappropriate for me to embark upon the balancing exercise required by the relevant authorities in respect of those 47 reports. However, I should record that, were I required to carry out that balancing exercise in respect of those 47 reports, I would have no doubt that the significant public interest in keeping the contents of those documents confidential far outweighs the competing interest in the administration of justice that might suggest that AWB should have access to those reports. If those reports were disclosed, there is a strong likelihood of great harm being caused to Australia's security and its national interests and very little likelihood that the contents of those reports will advance AWB's case. I turn now to carry out the balancing exercise in respect of the 15 redacted reports shown to Mr Cole. Counsel for AWB submitted that, given that the Cole distillation was in the public domain, it was unreal for the ONA to press its claim for public interest immunity in respect of these documents. It is not a question of waiver, for public interest immunity cannot be waived. However, once the contents or the substance of the contents of a document have been disclosed, there is no longer any reason to deny to the Court access to that document if it provides evidence that is relevant and otherwise admissible ( Sankey v Whitlam 142 CLR at 45). The public interest in non-disclosure would either be much reduced or destroyed by the prior publication of the contents of the document ( Sankey v Whitlam 142 CLR at 64). The only argument or ground advanced by the ONA which might survive the fact that the Cole distillation has been made public is the argument advanced under the heading "mosaic analysis". I do not think that the other two grounds advanced by the ONA now have much weight in light of the fact that the substance of the 15 redacted reports was disclosed to the public at large in the Cole distillation. Any angst felt by Australia's foreign intelligence partners will not be as great as it was in 2006 and, given the way in which the Cole distillation was compiled, there is little chance that production to the Court of the 15 redacted reports and the distribution lists relevant to those reports will harm national security. The ONA submitted that, notwithstanding the publication of the Cole distillation, the revelation of the actual contents of the redacted 15 reports shown to Mr Cole may well lead to a mosaic analysis being carried out by undesirables, thus threatening Australia's security and its national interests in the manner adumbrated by the Director-General of the ONA and by the deponents of the confidential affidavits. I do not accept this submission at the moment. Production to the Court for the purposes of inspection and further consideration of the ONA's claims cannot have the effect suggested by the ONA. Nor do I accept that I should further limit production by reference to a shorter period of time than that covered by the 15 reports. Accordingly, for the reasons I have stated, I propose to order the production to the Court for inspection by me of the 15 redacted reports and associated distribution lists. The ONA will be excused from being required to produce the remaining documents called for by the subpoena. I will reserve for further consideration the question of whether the ONA's claim that the documents which I will require to be produced should nonetheless be protected from further disclosure on public interest immunity grounds. The Commonwealth of Australia was justified in making the claims for public interest immunity which it made in support of the order which it sought in its Notice of Motion filed on 17 August 2009. Indeed, on one view of the matter, it was bound to make those claims. AWB, on the other hand, is faced with serious allegations which it is entitled to seek to meet by attempting to have brought to Court the documents called for by the subpoena which it issued to the ONA. It seems to me that each of the parties before me on the present application has behaved reasonably and legitimately in the proper pursuit of its best interests. Further, each of those parties has had some success, although neither party has been entirely successful. In the end, it seems to me that the issues which have been dealt with by these Reasons for Judgment were issues which had to be litigated and determined by the Court. For these reasons, I think that there should be no orders as to costs and that each party should bear its own costs of and incidental to the present application. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Pursuant to notices to produce served on agencies within the Australian intelligence community, a number of reports were produced to the Inquiry and inspected by counsel and solicitors assisting. Of the reports inspected, 15 documents were found to be of relevance. Public interest immunity was claimed by the Commonwealth on behalf of the Australian intelligence community in respect of the 15 for the reasons set out in confidential statutory declarations provided by the heads of the agencies that produced the relevant reports. The claim for public interest immunity was upheld, and the reports were tendered as a secret exhibit (secret exhibit 4). However, I prepared a document that distilled the content of the relevant reports and their distribution, without disclosing the source of the information within them or any other matters adverse to the public interest. It received these fees as agent for the Iraqi Government. The fees, less a small commission, were paid into accounts accessible by Iraq in violation of sanctions. The amounts involved were very substantial. It was also distributed on or about that date to DFAT, Defence, IGIS and PMC. By November 2000 the AIC held unassessed intelligence indicating that Iraq's transport charges for humanitarian goods under the OFFP had been very substantially increased. Alia was one means by which these transport fees were paid to Iraq. The AIC also held unassessed information that such fees would probably be used for procurement purposes outside Iraq. Each was also distributed on or about that date to DFAT and Defence. Only 3 of the 4 were sent to IGIS and PMC; the reports sent to IGIS and PMC did not contain the intelligence on the increased transport charges or the probable use of fees for procurement outside Iraq. By March 2001 the AIC held unassessed intelligence of endeavours by Iraq to breach sanctions by, amongst other methods, collecting commission on contracts for humanitarian goods imported into Iraq under the OFFP. It included unassessed information that Iraq violated sanctions by charging a "commission" of at least 10% on imported humanitarian goods under the OFFP and that the 10% commission was rigidly enforced. Each was also distributed on or about that date to DFAT, Defence and IGIS. One report was distributed to PMC; this report did not contain the intelligence that the 10% commission was being rigidly enforced. By September 2001 the AIC held unassessed intelligence indicating that inland transport fees for humanitarian goods, including fees paid through Alia, were proposed to be increased very substantially by Iraq. This increase was on top of the 10% commission already paid and the fees were payable in advance of delivery. The proposed increase in transport fees was to apply to all humanitarian goods delivered under the OFFP through the port of Umm Qasr. It was also distributed on or about that date to DFAT, Defence and IGIS. By December 2002 the AIC held unassessed intelligence that Iraq was enforcing the 10% commission on imports under the OFFP and that one means by which it continued to be paid was by payment into accounts in Jordan. It was also distributed on or about that date to DFAT, Defence, Customs, the Australian Federal Police, the Office of the Foreign Minister, the Office of the Minister for Trade, the Prime Minister's Office, the Australian embassy in Washington and the High Commission London. Between June 2003 and January 2004 the AIC held unassessed intelligence that the former Saddam regime had forced suppliers under the OFFP to pay Iraq the 10% commission. Each was also distributed on or about that date to DFAT. Two of the reports were distributed to Defence, the Australian Embassy Washington and the High Commission London. One was distributed to the Australian Representative Office Baghdad, one to Treasury and one to the Department of Industry, Tourism and Resources. The intelligence held by the AIC between 1998 and 2004 did not mention any Australian company by name. Unassessed intelligence held in November 2003 included that not all large companies had agreed to pay the Iraqi imposed surcharges, and cited as an example wheat imports from Australia. It was also distributed on or about that date to DFAT, Defence, the Australian Embassy Washington, the High Commission London and the Australian Representative Office Baghdad. None of the details or particulars of information contained in secret exhibit 4 is inconsistent with the distillation above save that the details above do not include details of the distribution of the certain documents within secret exhibit 4 after the commencement of this Inquiry. | claim by the office of national assessments on public interest immunity grounds to be excused from having to produce any documents in answer to a subpoena issued by the respondent relevant principles and approach discussed claim upheld in part balance of claim reserved for further consideration after inspection by a judge of documents ordered to be produced privilege |
2 When the matter was called on before me today the applicant failed to appear. The applicant had been advised in writing by the Australian Government Solicitor of the hearing before me today on 26 September 2006. There is no reason to think that the applicant was not aware that these proceedings were to be heard today. 3 Mr Markus, who appeared for the first respondent, addressed the merits of the application. It seems to me, in the absence of any particular rule and because of the difference of opinion in relation to the power given a judge of this Court under s 25(2B)(bb) of the Federal Court Act 1976 (Cth), it would be better to consider the application on its merits, although unaided by any submissions from the applicant. 4 The applicant, who is a citizen of the People's Republic of China, entered Australia on 25 January 2004. On 24 February 2004 she lodged an application for a Protection (Class XA) visa with the Department of Immigration and Multicultural Affairs under the Migration Act 1958 (Cth) (the Act). On 3 March 2004 a delegate of the Minister for Immigration and Multicultural Affairs refused to grant a Protection visa. On 2 April 2004 the applicant applied for a review of that decision. 5 On 4 May 2004 the Refugee Review Tribunal (the RRT) published its reasons for affirming the delegate's decision not to grant a Protection visa. 6 On 13 April 2006 the applicant filed an application in the Federal Magistrates Court seeking a review of the decision of the RRT dated 4 May 2004 and handed down on 26 May 2005. The applicant had been notified of the decision on that latter date. The respondent objected to the competency of the proceedings in the Federal Magistrates Court. 7 The applicant is deemed to have been notified of the RRT's decision on 1 December 2005: Clause 42, Schedule 1, Part 2 of the Migration Litigation Reform Act 2005 (Cth) (the Reform Act). Pursuant to s 477(1) of the Act, an application for a review of the RRT's decision must be made within 28 days. That period can be extended by 56 days if the criteria in s 477(2) of the Act are made out. After a period of 84 days has expired from the date of notification, in this case 1 December 2005, the Federal Magistrates Court has no jurisdiction to entertain an application or an application for an extension of time beyond the 28 day period provided for in s 477(3) of the Act. 8 The applicant's application was out of time and the Federal Magistrate dismissed the application as incompetent and entered an order accordingly on 31 May 2006. 9 On 26 June 2006 the applicant applied for leave to appeal from the judgment of the Federal Magistrate given on 31 May 2006 and applied for an extension of time within which to bring that application. Mr Markus contended that the order sought to be appealed from was an interlocutory order. I will assume without deciding that to be the case and assume that leave is required. 10 If leave is required the application for leave ought to have been made within 21 days: O 52 r 5. In my opinion, the application for an extension of time must be dismissed because there is no prospect that if an extension of time were granted leave to appeal would be granted. Moreover, there is no prospect if leave were granted that an appeal could succeed. 11 The grounds of the application for leave to appeal do not refer to any error on the part of the Federal Magistrate. The draft notice of appeal does not refer to any error on the part of the Federal Magistrate. The complaint is about the decision of the RRT. The orders sought in the proposed notice of appeal which are for the issue of the constitutional writs and an injunction are inappropriate for an appeal from the Federal Magistrates Court. 12 In my opinion, there is no prospect that if leave were granted the appeal would succeed. In those circumstances, the application for an extension of time within which to apply for leave to appeal is refused. Leave to appeal is refused. The applicant must pay the first respondent's costs of the application. | application for extension of time to apply for leave to appeal draft notice of appeal bound to fail if filed application dismissed. migration |
2 Section 87B(1) of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act ') makes provision for the proffering of undertakings to the Australian Competition and Consumer Commission ('the ACCC'), the applicant in these proceedings, and for the acceptance thereof, by the ACCC. On or about 30 May 2008, the respondent had a conversation with Sandra Irene Haywood, a Classified Sales Consultant for the 'Port Macquarie News' in which the respondent said words to the effect, 'I changed my name to James'. 4 Section 87B(4) of the Trade Practices Act , permits the Court to make orders in circumstances where it is satisfied that a person has breached a term of an undertaking, given to the ACCC in accordance with s 87B(1). 5 By an Application filed 15 August 2008, supported by a Statement of Claim, also filed 15 August 2008, the ACCC has sought orders under s 87B(4) of the Trade Practices Act and declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) said to arise from breaches, by the respondent, of terms of the undertaking of 25 March 2008 which was accepted by the ACCC on 2 April 2008. The Application took the form prescribed by Form 5 of the Federal Court Forms and specified as the time and date for hearing, 9.30 am on 1 September 2008, being a date upon which it was open to the Court to give directions for the further hearing of the proceeding. 6 Under Order 4, rule 8 of the Rules, provision is made for an applicant to state a date for a directions hearing in an Application, and I am satisfied that by the words of the Application presently before the Court, 1 September 2008 was stated as the relevant date for a directions hearing in this matter. 7 Under Order 9, rule 2(1) of the Rules, a respondent is required to enter an appearance 'before the date appointed for a directions hearing' although it is permissible for an appearance to be entered thereafter, in accordance with Order 9, rule 2(2) of the Rules. 8 No appearance was entered in this matter by the respondent on or before 1 September 2008, nor has any appearance been entered since that date. 9 Under Order 35A of the Rules, it is open to the Court to deal with a matter such as this in a certain way if a respondent is 'in default' (see Order 35A, rule 3(2)). The first directions hearing in this matter took place on 1 September 2008. No Defence had been filed by the respondent by that date or within seven days thereafter. 11 In the circumstances, the respondent was 'in default' for the purposes of Order 35A. 12 By a Notice of Motion filed 14 October 2008, the applicant has sought an order that the Court give judgment against the respondent for the relief sought in the Application, in accordance with Order 35A, rule 3(2)(c) of the Rules. Order 35A was inserted into the Rules towards the end of 2004. 15 Sackville J gave consideration to rule 3 in Universal City Studios LLLP v Hoey t/as DVD Kingdom (2006) 232 ALR 525 at [8] --- [10]. It is unnecessary to refer to the observations which fell from his Honour in that case, as later authority has established a clear line of approach which should be adopted in relation to matters arising under Order 35A, rule 3(2)(c). 16 On 3 November 2006, Kiefel J, then a judge of this Court, considered the rule in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (ACN 075 400 529) (2006) ('Dataline.net.au') 236 ALR 665 at [45] --- [50]. Her Honour also gave consideration to the desirability of orders being made in respect of participation in a trade practice compliance program at [96] --- [99]. Her Honour did not consider it a proper use of the Court's power to require the physical attendance of a person for the purpose of re-education. She pointed out that there are a number of objections to it and also pointed out that it raised questions as to supervision and enforcement (at [99]). 17 Following the judgment of Kiefel J, but before consideration of that matter on appeal, Order 35A rule 3 was further considered by Mansfield J in Bank of Kuwait and the Middle East v Ship MV "Mawashi Al Gasseem" (No 2) [2007] FCA 815 ; (2007) 240 ALR 120. His Honour referred to the reasons for judgment of Keifel J in Dataline.net.au and observed that the rule conferred a power in the Court which was discretionary as to whether relief, as sought, should be granted. His Honour proceeded to make declaratory orders, as sought, founded upon what he referred to as 'deemed admissions' on the relevant Statement of Claim. 18 An appeal from Kiefel J's judgment in Dataline.net.au came before a Full Court comprising Moore, Dowsett and Greenwood JJ, whose judgment was handed down on 7 September 2007 (see Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (in liquidation) (2007) 161 FCR 513). Their Honours summarised the process of reasoning of Kiefel J and, as I would understand it, expressed their approval of the approach which her Honour had advocated (see for example at [57]). In determining the relief, O 35A permits regard to be had to the "face of the statement of claim"; no evidence need be adduced to prove the factual contentions; allegations of fact in the statement of claim are deemed admitted ([45]); and although such admissions are generally taken as made only for the purpose of the relief sought by the statement of claim, O 35A consistent with O 35 contemplates judgment for relief not necessarily claimed in the pleading but nevertheless open on the facts deemed admitted ([47]). The terms of the rule suggest that recourse is not appropriate to affidavit evidence of additional facts to those alleged in the statement of claim ([48]). Although the ACCC contended that affidavit evidence of facts not customarily alleged in the statement of claim might be adduced ([48]) on a hearing as to relief and the observations of Lord Woolf MR in Phonograhic Performance Ltd v Maitra (1998) 41 IPR 225 at 230-231 suggest that as to discretionary relief evidence of relevant facts going to the exercise of the discretion should be properly before the Court, evidence which would alter the pleaded case should not be admitted ([50]). The fourth respondent accepted that further affidavit material might be accepted by the Court in relation to the relief sought ([50]). Regard ought not to be had to evidence of facts which could have been but were not pleaded concerning the conduct of the respondents. Regard ought not to be had to evidence of a further purpose of Mr Russell in connection with Dataline's conduct of resale price maintenance to undercut prices charged by VISPs to customers so as to attract those customers to Australis ([51]). Evidence as to the present circumstances of Mr Russell is relevant and admissible in the determination of a pecuniary penalty ([51]). Mr Russell continues to work in the same type of business as that conducted by Dataline and Australis ([90]). 20 The final case to which reference needs be made is Hadgkiss v Aldin (No 2) (2007) 169 IR 76; a judgment of Gilmour J which was handed down on 20 December 2007. In that case his Honour made reference at [9] to the judgment of the Full Court in Dataline.net.au at [42]. His Honour also gave consideration at [19]-[23] to the appropriateness of declaratory relief on deemed admitted facts. BES is a small business which provides employment services to unemployed persons, including those with disabilities, in regional centres in New South Wales and Queensland. Mr Roberson represented in the advertisements that fruit picking jobs were available for a period of between 6 to 12 months in a variety of locations from Taree in New South Wales to Queensland. In particular, Mr Roberson had no arrangement with Moorland Orchard whereby that business would provide employment to any fruit pickers referred to it by Mr Roberson. Further, Moorland Orchard intended to offer four or five fruit picker jobs which were to be available from September 2007 for a period of up to two weeks. More generally, Mr Roberson had no reasonable grounds for representing that he would offer fruit picking jobs to subscribers for the period of their respective subscriptions. The ACCC considered that by making these representations Mr Roberson engaged in conduct in contravention of sections 52, 53(c) and (d) and 53B of the Act. [signed] ........................................ Graeme Julian Samuel Chairman Dated this 2d day of April 2008 ANNEXURE A TEXT OF LETTER TO SUBSCRIBERS [On BES letterhead] [Insert name and address of subscriber] Dear [insert name of subscriber] Important information about your subscription to Backpacker Employment Services I operate the Backpacker Employment Services (BES) business [refer to earlier comment re Backpacker Employment Service Transport] and am writing to you as a current or former subscriber to BES. From about May 2007 to October 2007 I made certain representations in relation to the availability of fruit picking jobs for a period of between 6 to 12 months in a variety of locations from Taree in NSW to Queensland. The ACCC considers that the representations referred to above may be misleading and in breach of sections 52 , 53 (c) and (d) and 53B of the Trade Practices Act 1974 . At the time I made the representations I was not able to offer fruit picking jobs for a period of 6 to 12 months and I had no arrangement with Moorland Orchard whereby it was able to offer the number of jobs claimed. Further, subscribing to BES did not ensure that employment would be available for the period of the subscription. In order to address its concerns, I recently gave a court enforceable undertaking to the ACCC. As part of this undertaking, I agreed to offer a refund of the total subscription fee paid to those subscribers who did not retain employment for the period of their subscription. I have also agreed to refrain from making similar representations in the future if they are not true or if I don't have reasonable grounds for making them, and to implement a trade practices compliance program. If you subscribed to BES and wish to obtain a refund of your subscription fee, please send your request for a refund in writing to: Mr Roberson Backpacker Employment Services 1 -90 Seafront Circuit Bonny Hills NSW 2445. You should remember to include in your request, your name, contact details, the date on which you subscribed to BES and the details of your employment, if any, during your subscription. I am offering a refund to subscribers until [insert date -within 6 months of this Undertaking coming into effect]. You should, therefore, ensure that your request for a refund is received by no later than this date. You will also be required to prove that you were not employed for the period of your subscription (e.g. by way of statutory declaration). If you have any queries about this letter, please call me on [insert contact phone number]. Yours sincerely Richard Alexander Roberson ANNEXURE B TEXT OF CONSUMER NOTICE TO APPEAR IN NEWSPAPERS 1 CONSUMER NOTICE FROM RICHARD ALEXANDER ROBERSON AND BACKPACKER EMPLOYMENT SERVICES In mid-2007 I made certain representations that may have influenced people's decision to subscribe to BES. These representations related to the availability and duration of fruit picking jobs in a variety of locations from Taree in NSW to Queensland. In particular, that that there would be available between 200 and 300 fruit picking jobs at the Moorland Orange Juice Orchard and that a subscriber to BES would be guaranteed employment for the length of their subscription. The ACCC considers that by making these representations in circumstances where such jobs were not available as claimed and the absence of reasonable grounds upon which to base the representations, I engaged in misleading conduct in breach of the Trade Practices Act 1974 . In order to address its concerns, I recently gave a court enforceable undertaking to the ACCC. As part of this undertaking, I agreed to offer a refund of the total subscription fee paid to those subscribers who did not retain employment for the period of their subscription. If you subscribed to BES and wish to obtain a refund of your subscription fee, please send your request by [insert date] in writing to: Mr Roberson Backpackers Employment Services 1 -90 Seafront Circuit Bonny Hills NSW 2445. Remember to include in your request, your name, contact details, the date on which you subscribed to BES and the details of your employment, if any, during your subscription. Proof that you were not employed for the length of your subscription will also be required (e.g. by way of statutory declaration). If you have any queries about this notice, please call Richard on [insert contact phone number]. This notice has been paid for by BES and placed because of the undertaking given to the ACCC by Richard Alexander Roberson. 23 In paragraph 3 of the Statement of Claim, the applicant charged that the respondent had, from about May 2007 to October 2007, engaged in certain conduct including making representations in relation to employment in the fruit picking industry. 24 It was alleged that the conduct in question was in breach of ss 52 , 53 (c) and (d) and 53B of the Trade Practices Act . The ACCC contended that the respondent breached a number of terms of his undertaking including paragraphs 11, 12, 15, 16, 17, 18, 19 and 20. 25 In paragraph 9 of the Statement of Claim, the ACCC charged that the respondent had not caused letters to be sent as required by paragraph 11(a) of the undertaking. In paragraph 10, the ACCC charged that the respondent had failed to provide the ACCC with a schedule in writing as required by paragraph 11(b) of the undertaking. 26 In paragraphs 12 and 13 of the Statement of Claim, the ACCC charged that the respondent had failed to publish certain advertisements in the 'Manning River Times' and the 'Port Macquarie News' newspapers as required by paragraph 12 of the undertaking. 27 In paragraph 15 of the Statement of Claim the ACCC charged that the respondent had failed to provide it with a written statement or certificate in accordance with paragraph 18 of the undertaking verifying that the respondent had attended trade practice compliance training as referred to in paragraph 16 of the undertaking. 28 In paragraph 18 of the Statement of Claim the ACCC charged that the respondent had not undertaken the required training as referred to in paragraph 16 of the undertaking. 29 In paragraphs 20 to 23 inclusive the ACCC charged that the respondent had failed to comply with paragraphs 19 and 20 of the undertaking. 30 On the hearing of the current Motion some additional evidence has been led, but not evidence of facts which could have been but were not pleaded concerning the conduct of the respondent, nor was any evidence called which was in conflict with the matters charged in the Statement of Claim to which reference has been made. 31 I am satisfied that the Application and Statement of Claim were duly served upon the respondent on 18 August 2008 and that on 10 September 2008 a sealed copy of the Court's orders of 1 September 2008, that is to say, the date of the directions hearing, were served upon the respondent. I am satisfied that the Notice of Motion filed 14 October 2008 was served upon the respondent by prepaid express post directed to him at 90 Seafront Circuit, Bonny Hills, NSW on or shortly after 15 October 2008, the date of posting. 32 Whilst the undertaking required notices to be published in the newspapers to which reference has been made, no such notices were published. However, a form of notice was formulated following communication between Kristy Leanne Laws, a Classifieds Supervisor and the respondent on or about 11 March 2008. A copy of the form of notice as formulated is to be found in exhibit KL-1 to the affidavit of Ms Laws affirmed 17 October 2008. It would appear that the respondent failed to proceed with the publication of the notices once he was advised by Ms Laws that the cost of publication of the notice in the two papers would total $704.22. 33 After receiving some reminders from the ACCC in relation to his obligations under the undertaking, the respondent sent a document to the ACCC which is annexure MC-4 to the affidavit of Molly Choucair affirmed 3 November 2003. That document provides a list of five names to whom it is said that the respondent sent letters as requested on 'Monday', which I take to have been a Monday shortly before 2 June 2008. The communication also included a statement that a refund of $100 had been made on 24 January 2008 to one Jessica Mellon. 34 It would appear that the respondent had provided a list of 'Backpackers Employment Members' in June 2008. Ms Choucair made contact with one of the persons included on the list being a Ben Hicks. It seems clear that the respondent did post to Mr Hicks a letter generally as required of him by the undertaking, on or about 19 May 2008. 35 Another person whose name appeared on the list as having become a member on a date in July 2007 was listed as 'Whane Bowen'. Mr Bowen swore an affidavit indicating that he saw an advertisement in the 'Port Macquarie News' newspaper in or around June 2007 to which he responded which resulted in him subscribing $50 to become a 'member' of 'Backpackers Employment'. He says that he was sent a receipt for his six month subscription fee of $50 and further says that he had not, as of 23 October 2008, received a letter from the respondent as required by the undertaking in terms similar to that sent by the respondent to Mr Hicks. 36 The list of 'Backpackers Employment Members' provided by the respondent included only a relatively small number of names on 3 pages. Somewhat curiously, dates on the list jump, on one page, from 2007 back to 2006 and then forwards again to 2007. 37 The dates with which the ACCC is concerned is the period from 'about May 2007 to October 2007' which I would understand to mean 1 May 2007 to 31 October 2007. It is difficult to discern the dates referable to 'members' on one of the pages of 'Backpackers Employment Members'. The other two pages suggest that there were about 26 persons whose membership dates fall within the relevant timeframe. 38 Those 26 would appear to have contributed approximately $1300 in total to the respondent for their membership rights. Some may have paid for a 12 month membership rather than six months, in which case the total may be a little more than the figure mentioned of $1300. 39 Under Order 11 of the Rules, a pleading should contain and contain only a statement in a summary form of the material facts on which a party relies. A pleading should be as brief as the nature of the case admits, but under Order 11, rule 9, 'A party may by his pleading raise any point of law. Accordingly, declarations should be made as sought in the Application filed 15 August 2008 when taken with annexures A and B to the undertaking. 41 As to the remaining orders that are sought, it seems to me that there are serious difficulties associated with those parts of the undertaking which require the respondent to put in place a complaints handling scheme referable to trade practices complaints and to undertake training in relation to the application of ss 52 , 53 (c) and (d) and 53B of the Trade Practices Act . 42 Bonny Hills, where the respondent appears to reside, is located near Taree and is far removed from any centre where one might expect any trade practices courses to be given which might be of any value in ensuring that the respondent is made aware of his obligations under the sections mentioned. 43 One might have thought that mere disclosure by the applicant to the respondent of the terms of the sections, which are quite straightforward, would do more good than requiring him to somehow or other identify a course of training that he should undertake and then attend same. The salutary experience of his involvement in these proceedings will no doubt be more than sufficient to alert him to the need for people carrying on businesses such as his, soliciting employment for people whom he describes as 'backpackers', to comply with the requirements of the Trade Practices Act in relation to misleading and deceptive conduct and other like conduct. 44 In my opinion, it would be appropriate to make orders requiring the respondent to communicate with the 26 persons whose names are listed on the three page list of 'Backpackers Employment Members', to ensure that they are, effectively, invited to make an application for a refund of their respective subscriptions of $50 or $100, as the case may be. It will be appropriate to require the respondent to make refunds to such persons as may request a refund following notification of the availability of such a refund. 45 I do not favour the making of an order in terms of paragraph 7 in the Application which requires the transmission of letters to all persons for whom he [the respondent] has address information and who has subscribed to BES' service as contemplated by prayer for relief 7. 46 If orders are to be made by the Court, they must be orders which can be enforced, and in relation to which proceedings for contempt may be brought if there is non-compliance. 47 I do not favour the making of an order in terms of paragraph 8, which simply requires a reporting back to the ACCC of the action taken in respect of the 26-odd individuals mentioned. 48 I do favour imposition of a requirement upon the respondent to proceed with the publication of notices in the 'Manning River Times' and 'Port Macquarie News' newspapers, as contemplated generally by paragraph 9 of the Application. 49 I agree with the proposal for an order to be made generally in accordance with paragraph 10, which simply seeks the provision by the respondent of copies of the notices, as published, to the ACCC. 50 For the reasons I have given, I do not favour the relief sought in paragraphs 11 and 12, and would not be disposed to make orders in accordance with those paragraphs. 51 It seems to me that it would be appropriate for an order for costs to be made against the respondent. I will not say that he has flouted the requirements of his undertaking, in his absence. However, the limited compliance that there has been seems to have arisen as a result of follow-up action taken by the ACCC, which should have been unnecessary. 52 Whether or not the failure to write to Mr Bowen resulted from the fact that the respondent did not have his address, is a matter upon which one can but speculate. It certainly seems clear from the evidence of Mr Bowen, that at the time when a receipt was sent to him for his subscription of $50, the respondent then had Mr Bowen's address. 53 The applicant has asked that the Court adjourn the matter to allow telephone calls to be placed by the ACCC to see if it can identify addresses for the 26-odd persons, so that an order could be formulated requiring letters to be written to each of the 26 persons, informing them of their rights to obtain a refund of the relevant subscription. In my view, given the amount of money that is involved, it would be inappropriate to commit more time and expense to the securing of orders under s 87B(4) of the Trade Practices Act . 54 I would propose that order 7 be implemented by requiring the respondent to telephone the persons identified on the numbers that are included in the 'Backpackers Employment Members' list, with an obligation being cast upon him to read to each of the persons, with whom he is able to communicate, a statement generally in accordance with the terms of the proposed letter, which is included as annexure A to the Application. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | application for orders on default under order 35a rule 3(2)(c) appropriate relief for non-compliance with an undertaking given under s 87b(1) practice and procedure trade practices |
On 19 July 2004 he applied to the then Department of Immigration and Multicultural and Indigenous Affairs for a Protection (Class XA) visa. That application was rejected by a delegate of the Minister on 22 July 2004. The Appellant thereafter applied for review by the Refugee Review Tribunal. That Tribunal has given two decisions prior to the one now under review, both of which were set aside by earlier decisions of the Federal Magistrates Court. For present purposes, the Tribunal which last considered the delegate's decision again affirmed the decision not to grant the visa sought. An application seeking review of that decision was filed in the Federal Magistrates Court on 5 November 2008. On 16 April 2009 that Application was rejected: SZFQY v Minister for Immigration and Citizenship [2009] FMCA 395. The Appellant now appeals to this Court. The Tribunal decision was an improper exercise of the power conferred by the Migration Act or the regulations. The Tribunal made a number of findings to reject my claims. The Tribunal did not discuss with me the Independent Information or give me an opportunity, to provide an explanation in relation to those findings. ... Alternatively, the Tribunal's obligations under s.424A(1)(b) encompass the giving of particulars as to the derivation of adverse evidence which might affect a consideration of whether the information is reliable, since those particulars inherently assist a proper understanding of the relevance of the adverse evidence to the Tribunal's review. The Appellant appeared before this Court on 5 August 2009 unrepresented, although he did have the benefit of an interpreter. At the outset of the hearing he appeared to read from a document and made oral submissions as to why his Appeal should be allowed. He was unable, however, to provide any assistance as to what was intended to be embraced within the oral submissions he was advancing. Clearly the document had been prepared by someone else. Such a course does little either to advance such merits as an appellant's case may have or to assist the Court. Although there is some uncertainty in the grounds expressed in the Notice of Appeal , as supplemented by the written submissions, it is considered that the Tribunal has not committed any jurisdictional error and, more importantly, that there is no appellable error in the reasons for decision of the Federal Magistrate. AN INCORRECT INTERPRETATION OF THE APPLICABLE LAW? Before the Federal Magistrate, however, there was apparently a contention advanced that, in the words of the Federal Magistrate, " the Tribunal denied the applicant natural justice and made a jurisdictional error by failing to apply the correct test to determine whether there was a real chance of persecution in the reasonably foreseeable future ". This contention was rejected by the Federal Magistrate: [2009] FMCA 395 at [11] . If this is the " applicable law " and the " power " to which the Appellant intended to refer in his Notice of Appeal , the Federal Magistrate was correct to reject the contention. The now Appellant was invited to attend a hearing to be held before the Refugee Review Tribunal on 6 June 2008. The Appellant, by his representative, indicated that he did in fact wish to attend and on 24 May 2008 his representative forwarded to the Tribunal a detailed " dossier ". An " amended statement " signed by the now Appellant was forwarded to the Tribunal on 3 June 2008 and on 4 June 2008 a " submission " was also forwarded. The hearing before the Tribunal then took place on 6 June 2008. The claim being advanced, in very summary form, was that the now Appellant feared persecution if he returned to Bangladesh arising from his association with the Awami League, a Bangladeshi political party. The Tribunal proceeded to hand down its decision as signed on 3 October 2008. The reasons for decision of the Tribunal set out the " Claims and Evidence " before it, including an account of the prior two Tribunal decisions. The reasons then set forth " Independent Information ", including " (t)he latest UK Home Office Report on Bangladesh produced in August 2007 "; a " comprehensive view of the current state of political violence in Bangladesh " produced by " DFAT " in May 2007; and " an extensive overview of the political situation in Bangladesh " produced in April 2008 by the International Crisis Group. At hearing he claimed that even though he had been told that he was being dismissed because he had been absent without leave this was not the real reason for the dismissal. Even if I accepted that being absent was the ostensible reason for his dismissal and that the dismissal was politically motivated, which I do not, I do not accept that such a dismissal from his employment in 1990 would have any impact or throw any light on the situation for the applicant should he return to Bangladesh now or in the foreseeable future. As set out above the political landscape has significantly changed since 1990; the applicant has worked in many jobs since that time and has also run a successful business in Bangladesh. Firstly he has given differing and vague accounts to the Tribunal of when he was attacked and the reasons for those attacks. I found his claims to be vague and unsubstantiated by relevant details. Further the government has taken steps to strengthen the independence of the judiciary and to improve the fairness and accountability of the system. Whilst the country information suggests that the reality has been somewhat less than stated objectives I accept that the current government has made a genuine attempt to address the injustices of past political rivalries. I have, however, considered the situation on return for the applicant as a supporter of the Awami League. I do not consider that he will face a real chance of persecution should he return to Bangladesh now or in the foreseeable future. Given its findings of fact, the conclusion of the Tribunal was inevitable. It was inserted in 1998 by the Migration Legislation Amendment Act (No 1) 1998 (Cth) and has been amended by the Migration Legislation Amendment (Electronic Transactions and Methods of Notification) Act 2001 (Cth) and the Migration Amendment (Review Provisions) Act 2007 (Cth). Section 422B(1) makes clear that Part 7 Division 4, being the Division within which ss 424A and 424B appear, is " an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with ". The essential purpose of s 424A is to provide " a statutory procedural analogue to the common law of procedural fairness " although " the obligation imposed is not coextensive with that which might be imposed by the common law to avoid practical injustice ": VAF v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 123 at [24] , [2004] FCAFC 123 ; 206 ALR 471 at 476 to 477 per Finn and Stone JJ. I think s 424A should be looked at with a purpose in mind of ensuring that the claimant is fairly informed of information adverse to his or her case (in the manner described by the section) so that investigation may be made, and steps may be taken, somehow, if possible, to meet it. The extent of particulars of any information should be looked at in a common sense way in the context of the matter in hand and with fairness to the applicant in mind. A consideration of these matters is obviously affected by the chosen approach of the Tribunal. Particulars of information need to be provided to the applicant so that the applicant understands what is the relevant information to the review. SZLPO v Minister for Immigration and Citizenship (No 2) [2009] FCAFC 60 , 108 ALD 303 ; SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 , 150 FCR 214 ; SZKLG v Minister for Immigration and Citizenship [2007] FCAFC 198 , 164 FCR 578) and by the High Court (e.g. SZBYR v Minister for Immigration and Citizenship [2007] HCA 26 , 96 ALD 1). As the terms of s 424A make clear, the particulars required by s 424A(1) must be given in writing: s 424A(2). But s 424A(2A) creates an exception to s 424A(1) in that the Tribunal is not obliged to give written particulars of all information if the Tribunal gives clear particulars of the requisite information to the applicant at a hearing to which he has been invited under s 425. See also SZMHD v Minister for Immigration and Citizenship [2009] FCA 712 at [11] to [15] per Jacobson J. The " findings " to which reference is made are not further identified, nor is the " independent information ". It has been assumed, however, that the reference to " findings " is a reference to each adverse finding made by the Tribunal and that the " information " is a reference to independent country information that was available to the Tribunal. In SZEEU , supra , Allsop J observed that an assessment as to " whether the Tribunal has complied with s 424A(1) requires close attention to the reasons of the Tribunal, because it is the information that the Tribunal considers relevant that must be assessed in order to see whether, prior to the decision being made, it would be the reason or a part of the reason for affirming the decision ". The statutory criterion does not, for example, turn on "the reasoning process of the Tribunal", or "the Tribunal's published reasons". The reason for affirming the decision that is under review is a matter that depends upon the criteria for the making of that decision in the first place. The Tribunal does not operate in a statutory vacuum, and its role is dependent upon the making of administrative decisions upon criteria to be found elsewhere in the Act. The use of the future conditional tense ("would be") rather than the indicative strongly suggests that the operation of s 424A(1)(a) is to be determined in advance --- and independently --- of the Tribunal's particular reasoning on the facts of the case. Here, the appropriate criterion was to be found in s 36(1) of the Act, being the provision under which the appellants sought their protection visa. The "reason, or a part of the reason, for affirming the decision that is under review" was therefore that the appellants were not persons to whom Australia owed protection obligations under the Convention. When viewed in that light, it is difficult to see why the relevant passages in the appellants' statutory declaration would itself be "information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review". Those portions of the statutory declaration did not contain in their terms a rejection, denial or undermining of the appellants' claims to be persons to whom Australia owed protection obligations. Indeed, if their contents were believed, they would, one might have thought, have been a relevant step towards rejecting, not affirming, the decision under review. In SZMHD, supra , Jacobson J observed that the question as to whether s 424A(1) is engaged is to be determined in advance of and independently of the Tribunal's reasoning on the facts of the particular case: [2009] FCA 712 at [46] , citing SZBYR , supra , at [17] and [22]. In SZMNP v Minister for Immigration and Citizenship [2009] FCA 596 at [38] , Jacobson J referred to there being " some tension in the authorities as to what use, if any, can be made of the Tribunal's written reasons in determining whether s 424A(1)(a) was enlivened ". His Honour accepted that in light of the decision in SZBYR " the question is to be determined in advance of, and independently from, the Tribunal's reasoning ". But whether there is " close attention to the reasons of the Tribunal " or whether attention is given to the criteria for making the decision, there is not thereby exposed any breach of s 424A in any of the three ways advanced by the Appellant. Although it is by no means certain, it would appear that the Tribunal rejected the claim being advanced by the now Appellant upon the basis that it did not accept the evidence and other materials provided by the Appellant himself. In such circumstances, there would be no " information " which would fall within s 424A(1). Even if that be incorrect, the Tribunal unquestionably rejected the claims being advanced because it did not accept the evidence before it --- from whatever source --- as supporting those claims. And it did so after hearing from the now Appellant at the hearing which took place on 6 June 2008. Scrutiny of the manner in which the Tribunal proceeded was confined in this Court to a review of the account given by the Tribunal as to the factual issues it pursued. That account repeatedly sets forth a variety of matters which the Tribunal " put to " the now Appellant. Although the length of any hearing does not necessarily say anything as to the factual matters explored during the course of the hearing, it is noted that the hearing before the Tribunal occupied some three hours and that the now Appellant was accompanied before the Tribunal by a representative who was a registered migration agent. No inference, in such circumstances, is to be drawn that the Appellant was not extended an opportunity to further supplement the materials previously forwarded to the Tribunal and an opportunity to advance his case. Although no letter was forwarded to the now Appellant pursuant to s 424A, there has been no denial of any opportunity " to comment on or respond to " (s 424A(1)(c)) the information relied upon by the Tribunal in making its findings. " Clear particulars " of the information to be relied upon had been given to the now Appellant when attending before the Tribunal (s 424A(2A)). Section 424A(2A) relieves the Tribunal of the obligation to give particulars of information to an applicant or to invite him to comment on or respond to 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 ...". Sections 424A and 424AA " are intended to be complementary ": SZMCD v Minister for Immigration and Citizenship [2009] FCAFC 46 at [2] , [2009] FCAFC 46 ; 174 FCR 415 at 417 per Moore J. See also [2009] FCAFC 46 at [106] , 174 FCR at 436 per Tracey and Foster JJ. Moreover, and as further correctly concluded by the Federal Magistrate, the independent country information was not in any event information which falls within the ambit of s 424A(1): s 424A(3)(a). Section 424A(3)(a) provides that s 424A does not apply to information " 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 ". Rejected has been a contention that the phrase " just about a class of persons of which the applicant or other person is a member " is another criterion of exemption: QAAC of 2004 v Refugee Review Tribunal [2005] FCAFC 92 at [12] per Lander J (Dowsett and Hely JJ agreeing). The nature of the country information here in issue fell within s 424A(3)(a). And there is no requirement imposed upon the Tribunal to afford a party any opportunity to comment upon proposed findings that it may make: WAGU v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 912 per French J, as His Honour then was, at [36]. There is no such obligation imposed by the common law: Scorgie v Minister for Immigration and Citizenship [2007] FCA 2046 , 47 AAR 314 , applying F Hoffman-La Roche & Company AG v Secretary of State for Trade and Industry [1975] AC 295 at 369 per Diplock LJ. Nor does " information " for the purposes of s 424A " encompass the Tribunal's subjective appraisals, thought processes or determinations ": SZEEU , supra , at [206]. Again, if the Tribunal affirmed the decision because even the best view of the appellants' evidence failed to disclose a Convention nexus, it is hard to see how such a failure can constitute "information". However broadly "information" be defined, its meaning in this context is related to the existence of evidentiary material or documentation, not the existence of doubts, inconsistencies or the absence of evidence. The appellants were thus correct to concede that the relevant "information" was not to be found in inconsistencies or disbelief, as opposed to the text of the statutory declaration itself. Nor is there considered to be any breach of s 424A by failing to give " particulars as to the derivation of adverse evidence ". It is not at all apparent whether the Appellant was intending to confine this contention to " particulars " as to the derivation of the independent country information or " particulars " as to the evidence relied upon when making the series of adverse findings set forth elsewhere in the Tribunal's reasons for decision. Either way, the contention is without substance. While the source of information is a factor that must be put to an applicant in certain circumstances ( SZLPO , supra ), the facts of this case do not give rise to such an obligation on the part of the Tribunal. The source of the country information has been identified; the adverse findings were findings as to credit and an assessment as to evidence advanced by the now Appellant. Although not referred to in the Notice of Appeal , the Appellant's written submissions finally assert a breach of s 424AA of the 1958 Act. This was not a Ground relied upon before the Federal Magistrate and it should not now be allowed to be pursued on appeal. It is in any event a ground without apparent substance. The Tribunal did not accept that the Appellant had any significant political involvement in the Awami League and did not accept that he had been subjected to extortion or attack for reasons of his political opinion. Central to the rejection of his claims was the assessment by the Tribunal that his claims were " vague and unsubstantiated by relevant details ". These were all findings of fact open to the Tribunal and essentially based upon the material being advanced by the now Appellant. The Appellant has not been denied such procedural fairness as is set forth in the 1958 Act. He has been given a fair opportunity to advance his case. Fairness does not require an opportunity to further dissuade the Tribunal from making findings adverse to him. There has been no breach of s 424A. None of the contentions sought to be advanced in the Notice of Appeal has been made out. The Appeal should be dismissed. There is no reason why costs should not follow the event. The Appellant is to pay the costs of the First Respondent. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | fear of persecution claimant given opportunity to comment on information clear particulars of information given at time of hearing before refugee review tribunal migration |
(2) The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs. (3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given. (4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the proceeding or appeal be dismissed. (5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security. The principles are different depending upon the status of the applicant as either a corporate entity or natural person and whether the proceeding involves an application at first instance or an appeal against a first instance decision. Courts are reluctant to order that an impecunious applicant, being a natural person, provide security where the effect would be to stifle that person's access to the courts. This is the basis for the traditional rule at common law that "poverty is no bar to a litigant" ( Cowell v Taylor (1885) 31 Ch D 34 at 38). But where such a person has already obtained access to a court, and has received a decision dismissing the claim, the position is different. Section 56 provides that security is to be of such amount and given at such time and in such manner and form as the Court or Judge directs. There is an exception in the case of appeals, but there the appellant has had the benefit of a decision by one of Her Majesty's Courts, and so an insolvent party is not excluded from the Courts, but only prevented, if he cannot find security, from dragging his opponent from one Court to another". The difference is that, at the appellant level, there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal, or to an appeal, will be deprived of his costs, such an outcome would clearly be unjust. That consideration, it seems to me, is also reinforced by the judgment of Gummow J in Wiest v Director of Public Prosecutions and Anor [1988] FCA 450 ; (1988) 23 FCR 472. That case involved appeals against extradition with penal consequences. Such consequences were clearly very relevant considerations, but discretionary reasons moved the Court to order security for costs. Such discretionary considerations, which were particularly noted by Gummow J, included the delay between the filing of the papers and the bringing of the applications for security. His Honour referred to a particular circumstance which is relevant here, and that is that the applicant for security has a judgment in its favour. There was a reference by Gummow J to Bethune v Porteous (1892) 18 VLR 493 , again an old case. The principal basis upon which his Honour did so in Tran No 2 turned on the construction of ss 261A and 42 of the Migration Act 1958 (Cth). Section 261A(1)(a) of the Migration Act provides for forfeiture to the Commonwealth of a vessel used or involved in a contravention of the Act (where the contravention occurred in Australia), if the contravention involved: (i) the bringing or coming to Australia of one or more persons who were, or upon entry into Australia became, unlawful non-citizens; or (ii) the entry or proposed entry into Australia of one or more such persons. Section 42(1) provides that a non-citizen must not travel to Australia without a visa that is in effect. Cowdroy J held that the words "contravention of this Act" in s 261A(1)(a) of the Migration Act did not require the commission of an offence against the Act. Travelling to Australia without a visa contravenes s 42. The fact that the persons on board the vessel were subsequently accorded refugee status and granted protection visas is immaterial. That status, as His Honour noted, was conferred after the relevant contravention of s 42. These circumstances thus satisfied s 261A(1)(a). Hence, the vessel was forfeited to the Commonwealth. Mr Tran could not claim compensation because the forfeiture of the vessel did not involve the acquisition of property of a kind capable of being achieved on just terms without consequential absurdity. The Commonwealth said Mr Tran is impecunious. Financial documents reveal a very small surplus of income over expenses, a very small asset pool, and that he is subject to a costs order from the proceedings below in the sum of about $140,000. The Commonwealth acknowledged that the appeal is not manifestly without merit but said that is only the starting point of the consideration. The merits of the appeal were a neutral factor. The case is reasonably arguable, but no more. Further, the claim is essentially one for money. If Mr Tran succeeds on appeal he will stand to receive a substantial sum. While there has been some delay in the making of the application for security for costs, the Commonwealth submitted that Mr Tran should not be permitted to pursue the prospect of obtaining a substantial money sum without making some provision for the ordinary financial consequences of failure. Mr Tran admitted that he was in a difficult financial position, but said impecuniosity had not been proved.. It was true that those involved in his representation were acting on a contingency basis in that Mr Tran would not be liable for any fees or expenses unless he succeeded in the proceeding. It may also be acknowledged that the making of an order for security would stultify the appeal. Nevertheless, Mr Tran said that it was not the case that his financial position provided the Commonwealth with a prima facie entitlement to security. Where the power to so provide exists in uncontrolled terms, it would be to fetter the jurisdiction impermissibly to adopt such a rule or even a prima facie entitlement [ King v Commercial Bank of Australia Ltd [1920] HCA 62 ; (1920) 28 CLR 289 at 292-293; Lucas v Yorke (1984) 50 ALR 228 at 228-229; Webster v Lampard [1993] HCA 20 ; (1993) 112 ALR 174 at 175].. By the same token, the inability of a party to meet the costs of an unsuccessful proceeding is not irrelevant to the exercise of the jurisdiction. Litigation is inevitably expensive and burdensome. To add to the burdens of a party successful in the outcome, those of paying its costs with little or no prospect of recovery under an order for costs may, in particular circumstances, be a reason for offering a measure of protection to that party by way of security for costs. Mr Tran's submissions emphasised the nature of the claim in respect of which the appeal is brought. Mr Tran was the owner and master of a ship which transported persons claiming refugee status from Vietnam to Australia. Each of the persons so transported was granted a visa based on their status as a refugee (bar two who were granted different kinds of visas). The ship used for transport was seized and destroyed by the Australian Customs Service. Mr Tran's claim is for compensation for the destruction of the vessel either pursuant to s 4AB of the Customs Act 1901 (Cth) or the equivalent provision in s 3B of the Migration Act 1958 (Cth), each of which provides for compensation in respect of any acquisition of property, or by reason of s 51(xxxi) of the Constitution which guarantees the acquisition of property on just terms. Mr Tran noted that the parties had agreed the terms of a "Full Court Status Report" which was filed on 29 July 2009. This report said that the appeal "raises a number of particularly important issues of law which arise not only in the context of the destruction of vessels in the circumstances of the case but also in other contexts". Examples of these issues included "whether one can interpret civil penalty provisions so far as they relate to offences, to be triggered even in circumstances in which the relevant person can establish a defence under the offence under The Criminal Code ". This is a reference to the fact that, amongst others, Mr Tran was ultimately acquitted of an offence against s 232A of the Migration Act on the basis that he was entitled to the defence of acting in a "sudden or extraordinary emergency" which is a defence to all charges under The Criminal Code (s 10.3(1)). The status report also noted that the appeal raises constitutional issues relating to the acquisition of property. Given this context, Mr Tran relied on the observation in Devenish v Jewel Food Stores Pty Ltd [1990] HCA 35 ; (1990) 64 ALJR 533 at 534; [1990] HCA 35 ; 94 ALR 664 at 666, cited in Merribee Pastoral at [26], to the effect that it is relevant to the discretion to order security to consider whether "the proceeding raises matters of general public importance quite apart from the interests of the parties". Mr Tran described the appeal as raising a question about the alienation by public officials of private property without proper authority, this being a matter of particular relevance to the discretion required to be exercised. Mr Tran also pointed out the delay by the Commonwealth in making the application. Mr Tran filed the notice of appeal on 5 June 2009. The Commonwealth applied for security on 8 July 2009. In between those dates, various steps were taken, including the Commonwealth filing and serving a notice of contention without any indication being given that it would seek security for costs of the appeal. In this period Mr Tran's advisors had expended approximately $8,400 in preparing for the appeal. Mr Tran referred to the fact that none of the matters referred to in Order 28 r 3 of the Federal Court Rules (relating to matters which the Court may consider in determining whether to order security) applied. Nevertheless, his submissions also accepted that this did not constitute an exhaustive list of relevant factors. Finally, Mr Tran noted that the Commonwealth ran a "public interest and test cases scheme" under which he might be eligible for financial assistance. The guidelines for the scheme refer to financial assistance being available for cases which, in the opinion of the Attorney-General, are of public importance either because they raise matters in the public interest or the questions are in the nature of a test case. In this case, the Commonwealth accepted that the appeal was not hopeless or bound to fail and that the claims raised issues of public importance. Mr Tran said that if security were ordered, he would be shut out from litigating his claim against the Commonwealth in these circumstances and where the Commonwealth's actions in destroying the vessel caused or contributed to his parlous financial position. Although the appeal is not being maintained on the basis of a grant of legal aid, he has legal representation, in the form of both a solicitor and counsel, through a contingency fee arrangement. He has little excess income and very few assets of only a limited value, as well as the exposure to the costs order from the proceeding below. I am also satisfied that an order for the giving of security would be very likely to prevent the prosecution of the appeal. Although I consider that the Commonwealth did not make the application as soon as it could have done so, I am not satisfied that the delay involved would be such as to disentitle the Commonwealth from obtaining an order for security if other discretionary factors weighed in its favour. However, I am not satisfied that other discretionary factors do weigh in the Commonwealth's favour. By the status report for the purpose of the appeal, the Commonwealth agreed that the appeal "raises a number of particularly important issues of law which arise not only in the context of the destruction of vessels in the circumstances of the case but also in other contexts". I agree with this observation. I do not accept the Commonwealth's submission that the status of this Court as an intermediate appellate court undermines the relevance or weight of the public importance of the issues involved. I also do not consider that the extent to which the notice of appeal might require additional factual findings is a factor which particularly weighs in the Commonwealth's favour. The factual position is reasonably clear. Mr Tran committed no offence against the Migration Act because, as found in a criminal proceeding for breach of s 232A , he was entitled to the defence that the conduct constituting the offence was in response to circumstances of sudden or extraordinary emergency (s 10.3(1) of The Criminal Code ). Mr Tran and the persons being transported by the vessel of which he was owner and master were each found to have valid claims to refugee or other status entitling them to a visa. Mr Tran's vessel was destroyed by the Commonwealth in a purported exercise of power under the Customs Act . The Commonwealth now relies on s 261A of the Migration Act in support of its argument, which the primary Judge accepted, that because the vessel had been used in contravention of s 42 of the Migration Act (the general requirement that "a non-citizen must not travel to Australia without a visa that is in effect"), the vessel had been forfeited to the Commonwealth immediately upon entry into Australian waters. Some of the difficulties associated with the issues involved are disclosed by the fact that the primary Judge's conclusions in Tran No 2 ultimately depended on a different provision of the Migration Act (s 42) from those offence provisions originally considered in Tran No 1 (s 232A of the Migration Act ). This is because s 10.3(1) of The Criminal Code provides a defence to all offences under the Migration Act and Mr Tran was acquitted of an offence against s 232A on the basis of this defence. Hence, there was no relevant contravention of the Migration Act within the meaning of s 261A(1)(a) , at least insofar as the relevant offence provision (s 232A) was concerned. Section 42 is not an offence provision. The result of this construction is that the offence provisions of the Migration Act are all subject to a defence which, if available, means that neither an offence nor any contravention in the sense of any civil wrong has been committed (see the primary Judge's acceptance of this proposition at [49] in Tran No 2 ). Such offence provisions are then incapable of triggering forfeiture under s 261A and the consequential deprivation of a person's property. Yet provisions imposing obligations which are incapable of giving rise to criminal liability, for that reason, are capable of triggering s 261A and the consequential deprivation of a person's property. These observations are not intended to suggest that I disagree with the primary Judge's construction. It is merely to indicate that there are important issues about the way in which these provisions of the Migration Act operate as a coherent whole involved in the resolution of the appeal. By this I mean that s 4A of the Migration Act (which applies parts of the Criminal Code to all offences against the Act) is to be construed with all of the other provisions, including (for example) ss 42 , 232A and 261A. The appeal, therefore, is reasonably arguable and involves issues of general importance. Those issues, as Mr Tran noted, include not only those relating to the Migration Act but also constitutional issues relating to the acquisition of property. I also consider that the nature of Mr Tran's claims, and the circumstances from which they arise, are entitled to weight. It may be accepted that the claim is essentially one for compensation. But there are many circumstances which might give rise to such a claim. The context in this case is that a person claiming to be a refugee used a vessel to reach Australian waters. The person was found not to have committed any offence in so doing because of the availability of a defence. The person (and all others on the vessel) were in fact found to be refugees and thus were entitled to a protection visa (but for two persons who were granted other visas). The Commonwealth destroyed the vessel in reliance on a provision which depends on a contravention of the Migration Act . In other words, the claim arises in a context of an exercise of statutory power by the Commonwealth resulting in the destruction of property which, but for the effect of certain statutory provisions as construed by the primary Judge, was private property. It arises with respect to a statute which, as the primary Judge recognised in Tran No 2 at [61]-[63], operates against a background of international treaty obligations with respect to refugees. I am satisfied, as the Commonwealth acknowledged, that Mr Tran's appeal represents a bona fide claim which is not hopeless or manifestly without merit. When this is considered together with: - (i) the importance of the issues in the appeal not only to Mr Tran, but to the operation of the Migration Act more generally, (ii) the circumstances giving rise to Mr Tran's claim, and (iii) my acceptance that the making of an order for security would have the effect of stultifying the appeal, I am satisfied that the discretion to order security should not be exercised in the Commonwealth's favour. I consider the interests of justice require dismissal of the Commonwealth's notice of motion. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for security for costs principles to be applied in exercise of discretion as to whether to grant an order for security for costs difference in principle in relation to ordering of security for costs in a first instance matter and at an appellate level where an order for security for costs would stultify the appeal whether the public interest associated with the appeal outweighs the appellant's impecuniosity so not to warrant an order for security for costs in the respondent's favour. costs |
He has today appeared before me and has had the benefit of having read to him by the interpreter the reasons for judgment which I gave on 1 March 2006. I asked him why the reasons which his Honour the trial judge gave for dismissing his application summarily on the basis of the Federal Magistrates Court rules disclosed an error of law. 2 The applicant has sought to raise with me the fact that he was a person who feared his life would be in danger when he returned to his country of origin and that he was, in truth, a refugee. He raised with me that, first, the Refugee Review Tribunal ('the Tribunal') and, secondly, the delegate of the first respondent had both committed errors in their assessment of his case. I pointed out to the applicant that his present proceedings involved an application for leave to appeal from the Federal Magistrates Court's dismissal of his attempt to review the decision of the delegate of the first respondent for the reasons that I set out in [12], [13] and [14] of my judgment SZGGS v The Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 224. 3 I am satisfied that there is no substance in any basis on which the applicant seeks to challenge the delegate's decision. No consequence would ensue in law if the applicant were permitted to bring such an appeal for it is the decision of the Tribunal on the application for review from that decision which is the act in the law which is legally operative and affects the applicant's current status as a person who is not entitled to a protection visa. 4 In my opinion there is no utility in the grant of an application for leave to appeal. I adopt the reasons which I gave on 1 March 2006, before I had the benefit of hearing the applicant, as explaining the reasons in law why I am of opinion that there would be no sufficient doubt to warrant the grant of leave on the basis of the material before me today and I am not satisfied that there would be any injustice caused to the applicant, let alone a substantial injustice by my refusing him leave to appeal. 5 The applicant says that because of his impecuniosity he ought not be ordered to pay costs of his failed application. I see no reason to depart from the ordinary rule of litigation that a party who is wholly unsuccessful ought pay the successful party's costs. The only exception I would make is that as I am satisfied that through no fault of his own the applicant was not able to appear at the hearing on 1 March 2006. The order for costs that I make should not include the costs of that appearance. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | no question of principle migration law |
By order made on 4 August 2009, the applicant was directed to notify personally, and in the case of corporate respondents by service at their registered offices, the persons constituting the members of the group on whose behalf the proceeding has been instituted, in accordance with s 33Y of the Federal Court Act. The letter of notification was approved by the Court. It was also in a form which was satisfactory to the parties. The respondents have an ongoing business relationship with those group members who are current franchisees of the Pets Paradise franchise business. They wish to notify their current franchisees of their position in the proceedings, and to do so before the period within which group members may opt out of the proceedings has expired. For that purpose, they have sought leave to send a letter to the present Pets Paradise franchisees, other than those who are specifically specified in the further amended statement of claim as members of the group, in a form presented to the Court, pursuant to s 33ZF(1) of the Federal Court Act. The form of letter proposed to be sent by the respondents has been amended slightly in the light of the exchanged written submissions between the parties on the issue. It is now in the form attached to the respondents' written submissions in reply, filed on 10 September 2009. The proposed letter appears to have three purposes: to indicate that the proceedings will be disputed; to indicate that, notwithstanding the proceedings, the Pets Paradise franchise operations will not be adversely affected; and more generally to urge caution before deciding not to opt out of the proceeding. It is plain that s 33ZF(1) of the Federal Court Act empowers the Court, in an appropriate circumstance, to monitor, and if appropriate to regulate, the correspondence between the respondents to a representative proceeding and the group members on whose behalf the proceeding is brought if the circumstances warrant it: see King v AG Australia Holdings Ltd [2002] FCA 872 ; (2002) 121 FCR 480 , in particular at [31]-[32] per Moore J. In Johnstone v HIH Limited [2004] FCA 190 , Tamberlin J at [104]-[105] adopted that approach. This includes basic considerations regarding the manner in which members of a class are notified about their entitlements to opt out, and the way in which the proceedings are to be conducted. If a misleading representation is made to group members, this could well serve to confuse and disrupt the progress of the proceeding. It is essential that communications with class members or potential class members do not give rise to misunderstandings regarding their entitlements to opt out, or as to their responsibility for costs and expenses or their obligations to contribute to the proceedings in order to benefit from those proceedings. It does not follow that, routinely, the Court should monitor all communications between the respondents to a representative proceeding and the potential group members on whose behalf the proceeding is brought, subject of course to professional and ethical constraints. For example, in my view s 33ZF(1) cannot be read as prohibiting the respondent to a representative proceeding from communicating with a group member unless the Court has given prior approval. The provision itself merely confers power on the Court to make any order it thinks appropriate or necessary to ensure that justice is done in the proceeding; it does not prohibit conduct which is otherwise lawful. Accordingly, neither s 33ZF(1) nor any other provision in Part IVA prevents a respondent communicating with a group member in a manner which is not misleading or otherwise unfair and which does not infringe any other law or ethical constraint (such as a professional conduct rule which requires solicitors to communicate with a represented group member through the latter's own legal representatives). In this matter, I do not propose to give the approval sought. There are two reasons for that. The first is that, in my view, it is not necessary to do so. At this point, the respondents do not know who of their existing franchisees will or will not opt not to be included as group members in the representative proceeding. They intend to send the proposed letter only to those existing franchisees who are not already named in the proceeding as members of the group. There is no reason why they should not, in terms which are not provocative or misleading, inform those existing franchisees that they intend to resist the claim. Nor is there any reason why they should not reassure their existing franchisees that the proceeding will not adversely affect the ongoing operations of the Pets Paradise franchise (assuming that is the case). I am a little more concerned about the balance of the letter (paragraphs 5 to 9), for reasons I set out below, but in principle a respondent to a representative proceeding is not acting improperly, at least in circumstances such as the present where there are relatively few group members and it has an ongoing business relationship with many of them, to remind those persons of the need to consider whether to opt out of the proceedings by the specified date. The proposed letter is not misleading, at least so far as is apparent on the material before me. Nor, in my view, is it likely to be confusing to its intended recipients. However, the second reason for declining to grant the necessary approval is almost a corollary of the first. In circumstances such as the present, I think the Court should be cautious about approving the content of such a letter, by approving it being sent. The Court does not know independently of the proposed letter that it is accurate. The respondents' intention to resist the proceedings, and the fact that the proceedings will not affect their overall franchise operations, are not matters the Court is independently aware of. Moreover, whilst I do not regard the letter as misleading or confusing, it is not in so neutral a form that the Court should be seen to approve it. Paragraphs 5 to 8 refer to the definition of the claim group and the means of opting out. I do not see what paragraphs 5 and 8 add to the notification letter sent by the applicants (as agreed between the parties and as approved by the Court). If that part of the letter serves no practical purpose, there is no reason for the Court to approve it. Moreover, the applicant complains of the expression "framed the group". It is unclear why that expression is used. That paragraph of the letter really does no more than paraphrase in a slightly assertive way the letter already sent with the approval of the Court. It is not as neutrally expressed as the approved form of notification. The eighth paragraph is also repetitive of the notification letter, perhaps emphasising to group members (in a way in which the Court did not consider necessary when approving the agreed form of notification) that any notice to opt out should be sent to the South Australia Registry of the Court. Finally, I do not think the final sentence of paragraph 9 is a matter that the Court could approve. Clearly, it is appropriate to suggest that the existing franchisees should take independent legal advice. But, so long as potential group members have not yet elected not to opt out of the proceedings, or have opted out of the proceedings, there is no apparent reason why the respondents could not discuss the proceedings with them. It is up to the respondents whether they take that position. If they do not engage in misleading or deceptive conduct, until a solicitor-client relationship is established between the solicitors for the applicants and the group members (either those who have agreed to be group members --- with whom the respondents do not intend to communicate --- or those who have, after the opting out date, not opted out of the group for the purposes of the proceedings), there would be no apparent reason why they should not communicate with their existing franchisees about the proceedings. For those reasons, on the application of the respondents to send to existing franchisees of one or other of the respondents, other than those existing franchisees who are named as group members in the further amended statement of claim, a letter in the form attached to their submissions in reply dated 10 September 2009, I decline to make any order. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | representative proceedings circumstances in which court might exercise power under s 33zf(1) federal court of australia act 1976 (cth) to approve or regulate correspondence between the respondents and group members or potential group members practice and procedure |
3 Section 6(1)(a) of the Travel Agents Act provides that a person must not carry on business as a travel agent otherwise than in accordance with the authority conferred on that person by a travel agent's licence. Section 11(2) of such Act requires a licencee to be a participant in the TCF, being an approved compensation scheme created under s 46 of the Travel Agents Act . 4 A trust deed ('the Deed of Trust') was executed to enable the administration of the compensation scheme. The schedule to the Deed of Trust specifies, inter alia, the criteria to be satisfied by travel agents who seek to participate in the TCF. Under such schedule the Board of Trustees of the TCF has the power to require a participant in the TCF to provide information relating to its financial affairs to the Board of Trustees. 5 Orient Pacific Holidays Pty Limited ('Orient') was incorporated on 3 November 2004 and conducted its business as a travel agent in Victoria. Orient participated in the TCF and provided financial records to the TCF including annual financial reviews for the financial years ended 30 June 2005 ('the 2005 financial year') and 30 June 2006 ('the 2006 financial year'). Such reports did not indicate that Orient was undergoing any financial difficulty. 6 Ronald Ivor Griffiths ('Mr Griffiths') was the auditor of Orient and is the principal of Griffiths and Co Pty Ltd ('Griffiths and Co'). Mr Griffiths signed the audited statements and Griffiths and Co provided the TCF with audited accounts signed by Mr Griffiths for the 2005 financial year and the 2006 financial year. 7 Orient was placed in administration on 20 March 2007. The Court has been informed that Orient has subsequently been placed in liquidation. 8 Arising out of the administration of Orient, claims were made on the TCF in the amount of $1,187,421. In respect of such claims the TCF has paid approximately $983,333 by way of compensation to Orient's clients. 9 Robin Humphreys ('Mr Humphreys'), an investigative accountant, was engaged by the TCF to 'conduct certain enquiries and review the available material in connection with the collapse of Orient' . Mr Humphreys provided to the TCF a preliminary report dated 4 July 2008 ('Mr Humphreys' preliminary report'). Such report referred to substantial withdrawals from Orient's trust account and other movements of funds during the 2006 financial year which totalled more than $4,000,000. Mr Humphreys reported to the TCF that the transactions 'do not appear to be in the ordinary course of the business of a travel agent' . 10 The TCF needs to investigate Orient's financial records in order to determine whether it may be entitled to recover monies paid out in respect of claims made upon it in consequence of the administration of Orient. All original, copy and draft audit working papers whether electronic or otherwise in respect of the 2005 and 2006 financial years. 2. All original, copy and draft schedules and supporting documents (including where applicable subsidiary ledgers), for all General Ledger Account balances of Orient for the period from 1 July 2004 to the date of Administration used in support of the audit for the year 2005 and 2006. 3. Complete General Ledger of Orient for the 2005 and 2006 financial years, and to the date of Administration and any drafts thereof. For convenience, the above documents will hereafter be referred to as 'the documents'. The respondents submit that the TCF has not identified the possible cause of action that might be brought against them; that the TCF has not identified how any alleged act or omission on the part of the respondents caused the TCF loss; that the TCF has not alleged that Orient's banking transactions were improperly recorded or that Orient's financial position was materially misstated in its financial report for the 2006 financial year; that there is no evidence that the respondents have breached any alleged duty of care to the TCF; that the evidence does not establish that there is reasonable cause to believe that the TCF has or may have the right to obtain relief from the respondents; that the documents are being sought to enable the TCF to determine whether to commence a proceeding against third parties rather than against the respondents; that the TCF has withheld information and accordingly the Court cannot be satisfied under O 15A r 6(b) of the Rules that the TCF has made 'all reasonable inquiries' or that the TCF does not have 'sufficient information to enable a decision to be made whether to commence a proceeding' ; and that the scope of the documents sought by the TCF is too broad. (b) In respect of the accounting services provided by your client: negligent misstatement and misleading and deceptive conduct contrary to s52 of the Trade Practices Act . 14 By letter dated 10 March 2008 ('the 10 March 2008 letter') the TCF's solicitors responded and stated that an ' [e] xamination of Orient's Company records has revealed various account transactions which, based on the evidence we have obtained thus far, are not sufficiently justified' . The TCF's solicitors then listed eight relevant banking transactions. The 10 March 2008 letter did not refer to the causes of action identified in the 12 November 2007 letter nor to the arguments made by the respondents' solicitors against those causes of action in the 7 December 2007 letter. 15 The respondents submit that the 10 March 2008 letter represented a 'change of tack' by the TCF. The respondents submit that such letter contained a 'new set of allegations' that did not relate to the possible causes of action that were identified in the 12 November 2007 letter. The respondents submit that the 10 March 2008 letter implicitly accepted the challenges made by the respondents' solicitors in the 7 December 2007 letter and put the foreshadowed actions identified in the 12 November 2007 letter 'to one side' . The respondents submit that, as the initial causes of action have been abandoned, the TCF has not yet identified the possible causes of action that it may bring against the respondents. 16 The Court does not accept the respondents' submission that in the 10 March 2008 letter the TCF accepted the arguments made by the respondents' solicitors in the 7 December 2007 letter and also abandoned the causes of action identified in the 12 November 2007 letter. 17 The Court treats the 10 March 2008 letter as containing further factual material which the TCF relies upon to substantiate its belief that it has or may have the right to obtain relief from the respondents. Such factual material may be relevant to the possible causes of action identified in the 12 November 2007 letter. The introduction of that material does not suggest that the TCF sought to institute some other unidentified cause of action. 18 There is nothing in the 10 March 2008 letter to suggest that the TCF had accepted the challenges made by the respondents' solicitors or that the TCF had decided not to pursue the previously identified causes of action. 19 It follows that the respondents' submission does not succeed. 21 The Court observes that there is no requirement in O 15A r 6 of the Rules that an applicant must make explicit allegations of wrongdoings to justify an application to the Court under that rule. 23 It follows that there is no merit in the respondents' submission and that it must be rejected. This submission ignores the fact that the TCF has paid out claims (approximately $983,333) on behalf of Orient resulting from Orient's collapse. Such payments arose out of the TCF's obligations under the scheme in which Orient was a participant, and under which claims were made in consequence of the administration of Orient. The Court therefore rejects the respondents' submission. 26 The Court considers that Dartberg is distinguishable on its facts. In Dartberg the party that sought discovery under O 15A r 6 of the Rules identified negligence as its principal cause of action. Accordingly Middleton J was required to consider, inter alia, whether such a claim was sustainable. In considering that question Middleton J was required to determine whether a duty of care may have existed and whether there was any evidence before the Court that such duty had been breached. 27 In the present proceeding the TCF identified its possible causes of action against the respondents as arising under the Fair Trading Act 1987 (NSW) and the Trade Practices Act 1974 (Cth). In determining the sustainability of those foreshadowed actions the Court is not required to consider whether a duty of care may have been owed by the respondents to the TCF or whether such duty had been breached. 28 The TCF has not identified an anticipated claim in negligence against the respondents. Accordingly any findings of the Court as to whether a duty of care may have been owed by the respondents to the TCF and whether such duty was breached would be superfluous to the Court's consideration of the TCF's application under O 15A r 6 of the Rules. 30 As identified in the 12 November 2007 letter, the belief of the TCF at that time arose out of the Second Report to Creditors dated 16 April 2007 provided by Orient's Administrators and the Statement of Administrators' Opinion dated 14 June 2007 ('the opinion report') provided by the Administrator of a group of companies, namely TSG Limited, TSG Leisure Pty Ltd, Travel Shop Pty Limited and Bella Holidays Pty Ltd ('the group'). The opinion report, which has not been tendered, does not directly concern Orient, but is relied upon by the TCF to establish 'interweaving' between Orient and the group. 31 The Court has considered the respondents' submissions relating to the TCF's allegation of interweaving. However, the Court considers that the question of 'interweaving' is not of particular significance to the current application for preliminary discovery. 32 The current belief of the TCF that it has or may have the right to obtain relief against the respondents principally arises out of certain banking transactions of Orient as identified in the 10 March 2008 letter and as analysed in Mr Humphreys' preliminary report. As referred to above, in such report Mr Humphreys indicated that a number of transactions 'do not appear to be in the ordinary course of the business of a travel agent' . Mr Humphreys also noted that various transactions are unexplained by any of Orient's general journal entries but which impact upon Orient's balance sheet. For example, whereas the various entries between April 2006 and June 2006 make reference to 'bridging finance' , no records exist relating to any bridging finance or other use to which the payments were made. In order to confirm the integrity of these transactions it is necessary to trace the receipts and payments through the general ledger and to examine the applicable loan agreements or other documentation. The term "Bridging Finance" is generally applied to interim finance provided to facilitate the purchase and sale of real estate. The 2006 balance sheet does not disclose that Orient owned any real property. The above entries are consistent with the use by a Director of Orient of Trust Funds to provide interim finance for the acquisition of property on their own account, contrary to the purpose for which the trust funds were paid to Orient. Without access to the general ledger and the relevant documents, this possibility cannot be tested. In support of such claim the respondents refer to the TCF's instruction to its solicitors 'to consider any recovery action that may exist as a result of the collapse of Orient' as referred to in the affidavit filed in support of the application; and refer to the fact that the TCF has made it plain that the documents sought may assist in determining whether action may exist against 'any other parties' . 35 Insofar as the respondents rely upon Glencore International AG v Selwyn Mines (recs and mgrs apptd) and Others [2005] FCA 801 ; (2005) 223 ALR 238 at [11] per Lindgren J, the Court observes that such decision is authority for the principle that the Court cannot make an order for discovery against a third party. The respondents' submission, however, does not relate to the extent of the Court's power to make an order for preliminary discovery, but rather relates to the TCF's intention to use the documents produced in consequence of such an order for the purpose of commencing a proceeding against a third party. Although Glencore at [11] does not support such a submission, the Court observes that it is settled law that any such use of discovered documents to commence a proceeding against a third party would constitute an abuse of the Court's procedures: see Home Office v Harman [1981] 2 WLR 310; Science Research Council v Nassé [1978] ICR 777 at 781; Alterskye v Scott [1948] 1 All ER 469. 36 Accordingly, the TCF' s 12 November 2007 letter which indicates that the documents are being sought for the possible purpose of instituting proceedings against parties other than the respondents demonstrates a misconception of the preliminary discovery process. Such a use would constitute an impermissible use of documents discovered in consequence of an order made by this Court pursuant to O 15A r 6 of the Rules and could constitute a contempt of Court. 37 However, the only relevant considerations for the Court in deciding whether to make an order for preliminary discovery are those contained in O 15A r 6 of the Rules. Any consideration of the use the TCF might make of the discovered documents following such an order is speculative. Accordingly the respondents' concern does not constitute a reason to deny an order for preliminary discovery. 39 The respondents observe that the legal advisers of the TCF attended the offices of PPB Chartered Accountants & Business Reconstruction Specialists ('PPB'), the liquidators of Orient, and inspected 18 boxes of documents of Orient's primary records. The respondents submit that there is no evidence before the Court as to the nature of the documents reviewed or what, if anything, those documents disclosed of relevance to the respondents. The respondents also submit that Mr Humphreys has given no indication of the nature of his enquiries. Accordingly, it is submitted that the Court cannot be satisfied that the TCF has made 'all reasonable inquiries' under O 15A r 6(b) of the Rules nor be satisfied under such paragraph that the TCF does not have 'sufficient information to enable a decision to be made whether to commence proceeding' against either of the respondents. 40 The Court observes that in his preliminary report Mr Humphreys informed the solicitors for the TCF of the nature and results of his enquiries. Accordingly it is erroneous for the respondents to submit that Mr Humphreys has provided no indication of what enquiries were made. 41 As to the 18 boxes of documents 'reviewed and analysed' by the TCF's legal advisers, the Court observes that the TCF is only required to place before the Court 'the evidence already available to it relevant to the sufficiency of the information it possesses to enable a decision to be made whether to commence a proceeding' : see Glencore at [15]. The information must be relevant to the TCF's decision whether to commence a proceeding in order for such requirement to be activated. 42 From the 18 boxes of documents the TCF's legal advisers identified two files that subsequently formed the basis for Mr Humphreys' preliminary report. The Court infers from such actions that the legal advisers considered that only those two files contained relevant information for the purposes of determining whether to commence a proceeding against the respondents. Contrary to the respondents' submission, the information contained in such files was identified in Mr Humphreys' preliminary report. 43 Against this factual background it is not apparent that any relevant evidence has been withheld by the TCF as claimed. It is submitted that there is no evidence that any act or omission on the part of any person during the 2005 financial year would have had any bearing upon Orient's insolvency in March 2007 or upon any loss allegedly suffered by the TCF. The respondents submit that any order for preliminary discovery should accordingly be limited to documents pertaining to the 2006 financial year. 45 This submission overlooks the very purpose of the preliminary discovery process. The documents are sought to enable the TCF to determine whether there has been an act or omission in the preparation of Orient's accounts which could found a possible cause of action. It is not for the respondents to make such a determination based on the material in their possession. 46 The respondents also submit that the third category of documents referred to in the schedule to the application calls for the production of the general ledger of Orient for the 2005 and 2006 financial years. However, the TCF's evidence reveals that it obtained such documents from PPB 'in about November 2007' . The respondents submit that the production of those documents is accordingly unnecessary. 47 In respect of such submission the Court notes that the affidavit filed in support of the application establishes that the general ledger details for the 2005 and 2006 financial years have been supplied by PPB to the TCF. Accordingly, the Court upholds the respondents' submission that such documents should be excluded from any order made by the Court for preliminary discovery. However, the Court has found that there is reasonable cause to believe that the TCF has or may have the right to obtain relief against either or both of the respondents. The Court considers that the production of the documents (excluding the third category of documents referred to above) will assist the TCF to determine whether any possible action exists against the respondents and may assist the TCF to plead any case against the respondents with particularity. Alternatively, such documents may establish that the TCF has no case against the respondents. The Court concludes that the respondents should make preliminary discovery to the TCF confined to the documents referred to in the Orders. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | discovery preliminary discovery whether there is reasonable cause to believe that applicant has or may have the right to obtain relief from respondents purpose of preliminary discovery process whether applicant can use discovered documents to institute a proceeding against a third party o 15a r 6 of the federal court rules (cth) practice and procedure |
The present judgment deals primarily with the question of indemnity costs, but also records certain final orders that I have made in the proceedings. It should be read in conjunction with the Principal Judgment. 2 I use the same abbreviations in this judgment as in the Principal Judgment (see Annexure B to the Principal Judgment). It should be noted that the expression ' respondents ' refers to all 22 respondents joined in the proceedings, while the term ' Respondents ' refers to the respondents other than Ten and the AFL (against whom Seven discontinued the proceedings during the trial). I use the expression ' Costs Respondents ' to refer to the PBL, Telstra and Optus parties, since they are the only respondents who have not resolved their claims for costs orders against Seven. I stated in the Principal Judgment ([177]) that, in due course, I would make orders dismissing Seven's claims for relief. 4 There was only one Cross-Claim filed in the proceedings, in which Optus sought various forms of relief against Seven. In Chapter 20 of the Principal Judgment, I found in favour of Optus in respect of some (but not all) of its claims for relief. I directed Optus to bring in short minutes of order disposing of the Cross-Claim. 5 The directions made on 27 July 2007 provided a timetable for the filing of evidence and written submissions concerning the orders to be made in respect of the very substantial costs of the proceedings. 6 I also gave the parties an opportunity to make brief submissions as to whether I should address any issues relating to relief, including the assessment of damages. No such issues arise on the conclusions I have reached, but they could arise if an appeal is successful. As I explained in the Principal Judgment ([56], [178]), the only reason for providing this opportunity was to facilitate the appellate process. In particular, the opportunity was provided to the parties in order to minimise the inconvenience that might otherwise flow from a successful appeal. 7 In the event, none of the parties has asked me to make any findings relating to the relief to which Seven might be entitled should it succeed on appeal. Accordingly, I do not propose to make any such findings, although it is necessary to say something about Seven's claims for damages in the context of the Costs Respondents' application for indemnity costs. However, in his oral submissions, Mr Meagher SC (for the PBL parties) suggested that Seven has spent in the order of $100 million on this litigation up to date. This estimate accords more or less with my own. If the other parties together have incurred similar expense, which I think is likely, the litigation has cost the parties collectively a staggering sum, amounting to nearly $200 million'. One of the Respondents invited Seven, in the context of the current dispute as to indemnity costs, to put on evidence quantifying the total costs it incurred in the proceedings. Seven declined the invitation. I make no criticism of Seven for taking this course, but the absence of evidence means that the amount of costs Seven has incurred in conducting the litigation must remain an estimate. However, I have not seen any material that casts doubt on the accuracy of Mr Meagher's estimate of $100 million, which I adopted in the Principal Judgment. On the contrary, such evidence as there is suggests that the estimate was broadly accurate. For example, Seven's financial statements for the year ended 30 June 2005 (that is, the last complete financial year before the commencement of the trial) report that Seven incurred costs of $27 million during that year in connection with the proceedings. 10 The Respondents' written submissions on costs, with one exception, record what each says is the total amount of costs it incurred in the litigation. I cannot be sure whether the amounts recorded in the submissions are accurate. I do not know, for example, whether Seven would have wished to challenge the figure recorded by News in its written submissions (Seven and News having compromised News' costs claim). Be that as it may, the figures in the written submissions are said to be supported by billing records, accounts and the like. (2) This is a rounded figure given in PBL's written submissions. (3) The amounts recorded in the written submissions include solicitors' professional costs, counsel's fees, expert witness' fees, disbursements and the like. An estimate of the total costs relating to the proceedings should also take into account costs incurred by certain Respondents in the preliminary discovery proceedings brought by Seven pursuant to Federal Court Rules (' FCR '), O 15A r 6 (see Principal Judgment, at [7]). While the preliminary discovery proceedings preceded the current proceedings and technically constituted a separate matter, they were inextricably interwoven with this litigation. 15 The significance of 16 August 2005 is that on that date all 22 respondents (including the AFL and Ten, with whom Seven subsequently settled its claims) made a joint offer of compromise to Seven. This offer may only be accepted as against all of the [respondents]'. At the time the offer of compromise was made, the trial was scheduled to commence, and did in fact commence, on 12 September 2005, about four weeks later. 17 By a letter dated 24 August 2005, Seven rejected the joint offer of compromise as being ' completely inadequate '. In those circumstances its utility in the event that such orders were granted is questionable. We assume your clients are aware of the potential limitations this presents to any costs protection they were seeking to obtain from the Offer of Compromise'. As Seven's letter noted, Optus' offer of compromise was conditional in any event upon Seven accepting the joint offer of compromise. 19 Each of the Costs Respondents also seeks an order pursuant to FCR , O 62 r 4(2)(c) that, instead of taxed costs, it should be entitled to a gross sum specified by the Court in respect of costs. The justification for the award of a gross sum in lieu of taxed costs is said to be that if the matter proceeds to taxation in the usual way, the process will take a very long time --- perhaps years --- and is likely to expose the parties to additional very substantial costs. The Costs Respondents contend that, in order to minimise delay and save unnecessary expense, the Court itself should specify the sum to be paid by Seven by way of costs. 20 If the Costs Respondents do not succeed in obtaining an order that a portion of their costs should be paid on an indemnity basis, Seven does not dispute that an order should be made for the payment of costs on the usual party and party basis. There is, however, no agreement as yet as to the quantum of any costs award, assuming that the Court is prepared to order payment of a gross sum in lieu of taxed costs. 21 Each of the Costs Respondents sets out in its written submissions the gross sum it claims by way of costs. The claims are put in the alternative: first, the gross sum claimed if costs of the proceedings are awarded on a party and party basis until 16 August 2005 and thereafter on an indemnity basis; and, secondly, the gross sum claimed if costs of the proceedings are awarded simply on a party and party basis. I set a relatively early hearing date on the assumption that the respondents would file and serve their submissions and evidence in accordance with the timetable incorporated in the directions. In fact, most respondents did not comply with the timetable and filed their submissions and evidence later than the directions contemplated. 23 Despite the delay, Seven was able to resolve the remaining issues with a number of the respondents. I made orders either in chambers or in court giving effect to the agreements reached. On the same day orders were made giving Seven leave to discontinue the proceedings against the AFL, but reserving any question of costs for later argument. On 14 September 2007, I made orders by consent that there be no order as to costs between Seven and the AFL in the proceedings. I noted that Seven and the NRL had resolved all questions of costs between them, on the basis of a payment made by Seven to the NRL of a ' certain sum '. I also vacated any unsatisfied interlocutory costs orders as between Seven and the NRL and made no other order as to costs between them. Finally, I ordered that the proceedings between Seven and the NRL otherwise be dismissed. Any interlocutory costs orders between Seven and the News parties were vacated. Thus, although News made written submissions on costs, which have been adopted by the Costs Respondents, News has not participated in the oral argument on costs. Because of the Costs Respondents' failure to comply with the timetable laid down in the Principal Judgment, Seven was understandably not in a position at the hearing of 17 September 2007 to address all issues concerning costs. In particular, Seven had had insufficient time to determine whether it wished to challenge the gross sums claimed by the Costs Respondents (which, as has been seen, each of the Costs Respondents quantified on both an indemnity and party and party basis). 25 Seven was, however, prepared to contest at the hearing the Costs Respondents' contention that Seven should be ordered to pay costs incurred after 16 August 2005 on an indemnity basis. To that end, Seven filed written submissions arguing that any costs order against it should be on a party and party basis only. 26 Mr Sheahan SC, who appeared with Mr Halley for Seven, indicated that Seven supported in principle the Court making an order pursuant to FCR , O 62 r 4(2)(c) that, instead of taxed costs, each of the Costs Respondents be entitled to a gross sum specified in the order. However, Mr Sheahan reserved Seven's final position until it had an opportunity to determine whether the evidence relied on by the Costs Respondents was sufficient to enable Seven to assess the reasonableness of any particular gross sum claimed by way of costs. Ordinarily, costs follow the event and, in the absence of special circumstances, a successful litigant receives its costs: Hughes v Western Australian Cricket Association (Inc) [1986] ATPR 40-748, at 48,136, per Toohey J. In the absence of agreement or a particular costs order, costs will be taxed on a party and party basis in conformity with the FCR (see FCR , O 62 rr 4(1), 12, 19). The notice, in order to constitute an offer of compromise under the FCR , must be in the prescribed form: O 23 r 3(2). An offer may impose a time limit for acceptance, but the limit so imposed must not be less than 14 days from the date the offer is made: O 23 r 5(3). No statement of the fact that an offer has been made is to be contained in any pleading or affidavit, but this rule does not apply where the notice provides that the offer is not made without prejudice: O 23 r 8. If an offer has not been accepted, no communication with respect to the offer is to be made to the Court until after all questions of liability and the relief to be granted have been determined: O 23 r 8(2). (Emphasis added. It is common ground that in this situation a respondent cannot rely on the express language of O 23 r 11(5) to obtain an order for costs on an indemnity basis: Coshott v Learoyd [1999] FCA 276 , at [37], per Wilcox J; Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1 (' Dukemaster '), at [6], per Sundberg and Emmett JJ. However, as was pointed out in Dukemaster , at [6], the making of an offer by a respondent, which is rejected by the ultimately unsuccessful applicant, is a matter to be taken into account in determining whether the Court should make the usual party and party costs order or some order more generous to the respondent. 33 It should be noted that until recently, the rules governing offers of compromise by defendants in proceedings in the Supreme Court of New South Wales were in substantially the same form as FCR , O 23 r 11(5). I proceed on the basis that the unreasonableness was the failure by the offeree to accept the offer, which unreasonableness is demonstrated, prima facie, by the ultimate result. This approach is consistent with the decisions to which I have referred, the policy evidenced by the Act and the Rules and the widely accepted philosophy that settlements should be encouraged. In my view the Rules should be reviewed'. These cases have refused to accept the proposition that, where an applicant or plaintiff rejects an offer of settlement and subsequently wholly fails in the proceedings, the respondent or defendant should prima facie be entitled to an order for indemnity costs from the date of rejection of the offer. 35 Nonetheless, Rolfe J's suggestion that the Rules of Court be reviewed has been adopted by the Supreme Court of New South Wales. They point out, however, that O 23 r 11(5) would have applied had Seven succeeded in the proceedings but obtained an award of damages less than $10 million (that being the sum, in addition to taxed costs, offered by the respondents in the joint offer of compromise made in August 2005). In those circumstances, so the Costs Respondents argue, they would have had the benefit of a prima facie entitlement to an order for indemnity costs from the date of the offer of compromise. Moreover, on the authorities, the Court would have departed from the prima facie position, generally speaking, only in exceptional cases: Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281, at [17]-[18], per Hely J. The Costs Respondents argue that it would be anomalous for them to be deprived of indemnity costs in the present case simply because they enjoyed greater success in the proceedings than the terms of O 23 r 11(5) contemplate. 39 Nonetheless, the Costs Respondents accept that I am bound by the decision of the Full Federal Court in Dukemaster , although they formally submit that the case was incorrectly decided. Accordingly, they accept that in order to obtain an order for costs on an indemnity basis, they must show that Seven's rejection of the joint offer of compromise was imprudent or unreasonable, as Dukemaster requires. They argue, however, that the fact that the respondents made an offer of compromise in accordance with FCR , O 23, and that Seven, having rejected the offer, failed completely in the proceedings, is a factor to be given significant weight in determining whether the rejection was imprudent or unreasonable. 40 Mr Meagher SC, who appeared with Mr Payne for PBL, had the major carriage of the oral argument on behalf of the Costs Respondents. He submitted that Seven should have appreciated by August 2005 that its case faced ' enormous problems '. In particular, he contended that the matters which proved fatal to Seven's case should have been apparent to Seven when it rejected the respondents' joint offer of compromise. He illustrated this contention by a number of factual matters that he said were known or should have been known to Seven at the time. 41 The Costs Respondents emphasise that the joint offer of compromise, although amounting to a small fraction of Seven's original claims for damages (which Seven's counsel said in opening its case amounted to over $1.1 billion), was a serious one in the context of this case. Had Seven accepted the offer, it would have received not only $10 million, but the costs incurred by it until the date of the offer, assessed on a party and party basis. Given the likelihood that Seven's costs by this time had exceeded $40 million, the respondents' offer to pay costs was worth tens of millions of dollars. The Costs Respondents point out that if Seven had accepted the offer of compromise, it also would have been relieved of the risks associated with highly speculative litigation, including the risk of being ordered to pay the respondents' costs. 42 The Costs Respondents further emphasise that the offer of compromise was made at a time when Seven was well-placed to make a realistic assessment of its prospects of success. Discovery had been substantially completed and virtually all evidence filed, including experts' reports. The offer was made shortly after a formal mediation conducted by an experienced mediator, at which the respondents had presented position papers that (so it could be inferred) pointed out the formidable difficulties in Seven's path. Clearly, Seven had the resources and legal assistance available to enable it to make an informed evaluation of its prospects in the litigation. Any such evaluation would have indicated that its prospects of success were poor. 43 The Costs Respondents submit that, in those circumstances, Seven's rejection of the joint offer of compromise was imprudent and unreasonable. Seven contends, however, that the question of unreasonableness must be tested without resort to hindsight, but rather by looking at the circumstances prevailing at the time the offer was made. The question is not to be determined simply by reference to the ultimate result. If that were the case, so Seven argues, every applicant who rejected an offer of compromise and ultimately failed in the proceedings, would be required to pay costs on an indemnity basis. Seven also relies on authorities suggesting that rejection of an offer of compromise can be regarded as unreasonable only if the offer was accompanied by an explanation which puts to the offeree with ' sufficient particularity ' the reasons why the offeree must fail in the proceedings: Dukemaster , at [6]. 45 Seven points out that the offer was made jointly by all respondents. Accordingly, so Seven contends, it is not to the point that some of its claims might have been seen as untenable at the time. The question of unreasonableness must take account of the fact that acceptance of the joint offer would have terminated Seven's claims against all respondents. 46 Seven further submits that the offer was not truly a substantial compromise on the part of the respondents. Seven argues that its case was complex and depended on issues of statutory construction and market definition, as well as difficult questions relating to substantial lessening of competition, the existence of an anti-competitive purpose and the value of Seven's lost commercial opportunities. The resolution of the case required consideration of a vast amount of lay and documentary evidence, together with an assessment of conflicting evidence from highly qualified economists and other experts. Moreover, Seven ultimately succeeded on several issues that were much in contest, such as the existence of the pleaded retail pay television market ([2077]) and of the so-called ' Master Agreement ' ([2264]). Further, contemporaneous documentation lent support to Seven's case, such as the ' killing C7 ' comments attributed to Foxtel's CEO ([2529]-[2530]), and these, at the very least, called for an explanation from the respondents. The evidence also established that News and Foxtel had a motive to bring about C7's demise. The purpose case against the Consortium Respondents under s 46 of the TP Act depended on whether the evidence of Mr Philip and Mr Macourt was worthy of credit ([2495]), a matter that could not be assessed until they had entered the witness box. One reason is that, as Cooper and Merkel JJ pointed out in Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727, at 732, the issue has acquired greater significance as the gap between the two bases for the assessment of costs has grown. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to bear'. In Dukemaster , the applicants sought damages for misleading and deceptive conduct and breach of contract against Dukemaster. Dukemaster made an offer of compromise pursuant to FCR , O 23, offering to pay the applicants a total of $22,972, inclusive of costs. The applicants rejected the offer. The applicants succeeded at trial in obtaining judgment for amounts totalling $347,781. However, an appeal by Dukemaster was allowed and the orders made by the trial Judge were set aside. 52 Sundberg and Emmett JJ noted that Dukemaster's offer did not fall within FCR , O 23 r 11(5), because the applicants had ultimately been wholly unsuccessful in the proceedings. (Conti J dissented on the appeal and thus did not need to address the question of indemnity costs. The applicant for a more generous award must show that the rejection of the offer was imprudent or plainly unreasonable: NMFM Property Pty Ltd v Citibank Ltd (No 2) (" NMFM ") [2001] FCA 480 ; (2001) 109 FCR 77 at 98; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) [2002] FCA 1294 at [28] ; Sydney Markets Ltd v Sydney Flower Market Pty Ltd [2002] FCA 283 at [16] - [17] and [23]. In their absence, it would be open to parties to put their respective cases to the opposing party urging it to recognise the merit of what is put in the hope that if it ultimately finds favour with the Court, an award of indemnity costs will follow. If this were correct, one might ask rhetorically, 'Why write a letter as distinct from simply relying on the pleadings?"'. (Emphasis in original. The offer was for a ' derisory ' sum that would not even have covered the applicants' costs to that stage of the litigation (at [9]). Moreover, the letter of offer had not attempted to explain why the applicants should have accepted so derisory a sum. For these reasons, their Honours refused to order the applicants to pay Dukemaster's costs on an indemnity basis. 54 None of the authorities referred to in Dukemaster concerned rejection of an offer of compromise made by a respondent to an applicant in compliance with FCR , O 23. Each involved a so-called Calderbank offer (that is, an offer made specifically with a view to being used in court on a costs application by the offeror, should the offer not be accepted by the offeree). In effect, the reasoning in Dukemaster applies the authorities governing a Calderbank offer to an offer of compromise made by a respondent under FCR , O 23, in the particular situation where the applicant rejects the offer but subsequently fails completely in the proceedings. 55 The judgment in Dukemaster appears to assume rather than demonstrate that it is appropriate to apply the Calderbank principles to the particular situation that arose in Dukemaster itself --- that is, where a respondent makes an offer pursuant to O 23, and the applicant fails entirely. It is perhaps arguable that a different approach should be taken where a respondent avails itself of a procedure specifically contemplated by O 23, but ultimately proves to be more successful in the proceedings than the terms of O 23 r 11(5) contemplate. 56 It is true, as Mr Sheahan pointed out, that an applicant who rejects an offer of compromise and ultimately obtains only a small sum by way of damages --- perhaps even a nominal sum --- will ordinarily be awarded costs incurred until the date of rejection of the respondent's offer, assessed on a party and party basis. It is also true that O 23 r 11(5) was apparently inserted into the FCR in 2004 in order to give a respondent the same opportunity to secure an award of indemnity costs as had previously only been available to an applicant. Prior to that time, where an applicant made an offer of compromise pursuant to FCR , O 23 and thereafter obtained a more favourable judgment than the terms of the offer, he or she was prima facie entitled to an order for costs on an indemnity basis as from the date the offer was made: O 23 r 11(4). 57 Even so, the result produced by Dukemaster seems anomalous. A respondent whose offer of compromise is rejected is prima facie entitled to an order for indemnity costs from the date of the rejection of the offer, provided the applicant obtains a judgment that is less favourable than the terms of the offer. Yet, according to Dukemaster , if the applicant fails completely, the respondent must show that the applicant's rejection of the offer of compromise was imprudent or unreasonable. 58 The simplest solution would be for the Federal Court to adopt a rule equivalent to UCPR , r 42.15A (extracted at [35] above). Such a rule would promote the important policy of encouraging the negotiated resolution of disputes. This is because a rule in this form would expose an applicant to the risk of a costs penalty, over and above an award of costs on a party and party basis, should the applicant press on with litigation in the face of an offer of compromise that, if accepted, would have yielded a more favourable result than that ultimately achieved. In my view, the benefits of a rule in the form of r 42.15A substantially outweigh any disincentive that such a regime might create for an applicant wishing to pursue arguable claims. The benefits apply particularly to mega-litigation which, as I have explained in the Principal Judgment ([1], [17]), exposes not only the parties, but also the Court and the wider community, to very substantial costs should the proceedings not be resolved by agreement. 59 It follows that there is a disconformity between the approach that, in my view, should be taken in a case such as this and the approach that Dukemaster requires me to take. For present purposes, Dukemaster holds that the applicant's rejection of an offer of compromise made by a respondent pursuant to O 23, where the applicant wholly fails in the proceedings, will not ordinarily lead to an award of indemnity costs against the unsuccessful applicant unless the rejection of the offer was ' imprudent or unreasonable '. It is that holding I must apply to the circumstances of this case. 60 It will be seen that I have omitted the word ' plainly ' from the formulation of the holding in Dukemaster . I have done so because of the judgment of the Full Federal Court in Black v Lipovac . In that case, the defendant rejected Calderbank offers made by the plaintiff (the trial being conducted in the Supreme Court of the Australian Capital Territory). The Court referred (at [217]) to the line of authority in the Federal Court supporting the proposition that the mere refusal of a Calderbank offer does not of itself warrant an order for indemnity costs. Their Honours interpreted the authorities as requiring ' the offeror ... to show the conduct of the offeree was unreasonable '. To the extent there is a difference, we would prefer the by now well established line of authority in decisions of single judges of this court. However, we would not, with respect, necessarily endorse the view of Sheppard J in Sanko [Steamship Co Ltd v Sumitomo Australia Ltd [1996] FCA 22] that the conduct of the offeree has to be "plainly unreasonable". To adopt an especially high standard of unreasonableness would operate as a fetter on the discretion to award indemnity costs and diminish the effectiveness of the Calderbank offer as an incentive to settlement. Experience, however, shows that this prospect alone is not always sufficient to compel a litigant to face up to the offer. The further prospect of a super-added costs penalty if a reasonable offer be not accepted is a salutary inducement to an offeree to undertake this often painful task"'. However, if it does, I would prefer to apply the formulation in Black v Lipovac , rather than that in Dukemaster . The comments in Black v Lipovac represent the considered views of a Full Court on this issue. The joint judgment in Dukemaster did not refer to Black v Lipovac and gave no reason for rejecting the analysis in that case. In my view, the policy reasons given in Black v Lipovac for avoiding the word ' plainly ' are persuasive (although the suggestion that there is no substantial difference between the views of Rolfe J in Multicon and the Federal Court authorities appears, with respect, to be somewhat less persuasive). 63 Two other points should be noted, both of which are referred to by Hely J in Port Kembla Coal Terminal v Braverus . First, in assessing whether an applicant acted unreasonably in rejecting an offer of compromise, its prospects of success on liability cannot be considered in isolation from its prospects of success in relation to the quantum of damages it claims: at [45]. Secondly, the party seeking a special costs order, such as an order for costs on an indemnity basis, must discharge any burden of proof: at [38]. In some cases the presence or absence of imprudence or unreasonableness on the part of an applicant who rejects an offer of compromise will not be difficult to assess. An example is Dukemaster itself, where the respondents' offer of compromise was for an amount equivalent only to approximately six per cent of the damages the applicants were actually awarded at trial (although they lost the benefit of that judgment on appeal). The Full Court had no hesitation in refusing to order costs to be paid on an indemnity basis. 65 In other cases, of which this is one, the task of the Court is much more formidable. It must be remembered that the Court is required to consider whether the rejection of the offer of compromise was unreasonable by considering, among any other relevant circumstances, the strengths and weaknesses of the applicants' case, looking at the claim prospectively at the time the offer was made: Gretton v Commonwealth [2007] NSWSC 149 , at [24], per Studdert J; Equity 8 Pty Ltd v Shaw Stockbroking Ltd [2007] NSWSC 503 , at [33], per Barrett J. 66 The fact that the applicant ultimately failed in the proceedings, is a matter to be taken into account. 67 The present case was very complex. Seven relied on many causes of action and advanced many alternative contentions. In a case of this kind, it can be especially difficult for the trial Judge to assess whether the rejection of an offer of compromise, in the circumstances prevailing at the time the offer was made, was ' imprudent ' or ' unreasonable '. The Judge, in effect, has to assess the applicant's prospects of success at a particular time in the past and weigh the merits of the offer rejected by the applicant (an offer which, in retrospect, the applicant would have been better off accepting). The assessment has to be undertaken without the Judge necessarily having a clear idea as to which of the facts ultimately found were known or should have been known to the applicant at the time it rejected the offer of compromise. 68 The difficulties are compounded if the Court has not had occasion to consider the relief to which the applicant would have been entitled had it succeeded in establishing liability. As I have noted, both the reasonableness of an offer and the unreasonableness or otherwise of its rejection must depend in part on the applicant's prospects, not only of succeeding on liability, but of obtaining the relief it seeks. In particular, where the applicant claims many millions of dollars in damages --- indeed, in this case, many hundreds of millions of dollars --- the reasonableness of an offer to compromise for a given sum must depend not only on the applicant's prospects on liability, but also its chances of recovering damages in an amount substantially in excess of the sum incorporated in the offer of compromise. As Mr Meagher observed in his submissions, a separate line of authority deals with the award of indemnity costs in such cases: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, at 401, per Woodward J; Re J-Corp Pty Ltd and Australian Building Labourers Federated Union of Workers --- Western Australian Branch (unreported, 19 February 1993, French J); Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685, at 693, per Branson J. Mr Meagher submitted that it is enough in the circumstances of the present case for the Costs Respondents to show that Seven faced (in the words of Wilcox J in Coshott v Learoyd , at [50]) ' enormous problems ' in this litigation and that Seven must have appreciated the difficulties it confronted when it rejected the joint offer of compromise in August 2005. Once that proposition is accepted, so Mr Meagher argued, the unreasonableness of Seven's rejection of the substantial offer of settlement becomes apparent. 70 The Costs Respondents, so it seems to me, have advanced a number of cogent reasons in support of their contention that Seven either appreciated or should have appreciated in August 2005 that important aspects of its case faced serious difficulties. The fact that the information had been leaked to the media in late 2000 would, of course, have been known to Seven in August 2005. • Similarly, Seven must have known in August 2005 that it did not intend to utilise access to the Telstra Cable for the purpose of enabling C7 to provide retail pay television services to subscribers ([2802]). This finding was critical to the rejection of Seven's case under s 45(2) of the TP Act that, by denying C7 access to the Telstra Cable, Foxtel and Telstra gave effect to a provision in the BCA that was likely to have the effect of substantially lessening competition in the retail pay television market ([2805]-[2806]). • Seven's claim that Foxtel was prepared to pay a predatory price in 2000 for the AFL pay television rights was undercut, at least to a considerable extent, by Mr Stokes' concession in evidence that he regarded the price paid by Foxtel (of $30 million per annum) as a good one for the purchaser ([2253]). The predatory pricing claim formed a significant element in Seven's purpose case under s 46 of the TP Act . Moreover, Seven placed the alleged anti-competitive purpose of News, Foxtel and PBL at the forefront of its submissions on market definition ([1801]). • Seven's experts agreed that their evidence as to the existence of the AFL and NRL pay rights markets depended upon a particular understanding of the operation of the anti-siphoning regime created by the Broadcasting Services Act 1992 (Cth). Specifically, both of Seven's experts assumed that the anti-siphoning regime operated in a manner that eliminated, or at least severely limited, the opportunity for pay television operators to acquire exclusive rights to AFL or NRL matches of relatively high quality ([1824], [1827]). Seven would have been aware, well before August 2005, that pay television operators did not necessarily receive the worst matches under the anti-syphoning regime ([1834], [1852]). • The joint bid by Seven and Ten for the AFL broadcasting rights in 2005 was not helpful to Seven's case, insofar as that case rested on the existence of the wholesale sports channel market ([1995] ff). The nature of the joint bid for the AFL broadcasting rights would, of course, have been known to Seven by August 2005. • Mr Stokes gave evidence in the proceedings that supported the Respondents' contention that there was no separate functional wholesale sport channel market ([1981] ff). On one view, Seven should have been aware of Mr Stokes' views on this topic well before the hearing commenced. • One major difficulty facing Seven's case that the Master Agreement Provision had the effect of substantially lessening competition in the retail pay television market (a market which the Preliminary Judgment finds existed at the relevant times ([2264])) was the parlous state of Optus' retail pay television business in late 2000 or early 2001 ([2289] ff). Much of the evidence that led to findings that Optus would not have continued operating as an independent retail pay television provider was available to Seven by August 2005 (although not the witness statement of Mr Lee, whose evidence relating to these matters I accepted ([2854])). Seven claimed a wide variety of remedies. As is evident from the fact that Seven did not press some of its more extravagant claims, I do not think that Seven could reasonably have expected in August 2005 that it had a realistic chance of obtaining the full panoply of remedies claimed by it. 72 At the trial, Seven's claims for damages were ultimately put by reference to three ' mutually exclusive scenarios ' ([99]). Seven did not proceed with its claim, foreshadowed in opening addresses, of up to $1.1 billion in damages (including interest) ([18]). The most substantial claim pressed by Seven (' Scenario 1 ') sought damages equivalent to the net present value of the business opportunity Seven lost by reason of having been deprived of the AFL pay television rights for the 2002 to 2006 seasons. 73 In its Closing Submissions at the trial, Seven put the value of this lost opportunity at between $194.8 million and $212.3 million ([100]). These amounts were to be adjusted for interest and the consequences of income tax (the latter requiring the application of a multiplier of 1.429 ([101])). This assessment of the value of the lost opportunity rested very heavily on the evidence of Professor McFadden. Since I have not been asked to address the quantum of damages, to date I have not had to make findings about the cogency or otherwise of Professor McFadden's analysis. The cogency of his evidence, however, bears on Seven's chances of obtaining a substantial damages award in the proceedings, had it succeeded on liability. 74 The analyses in the written and oral Closing Submissions suggest to me that Professor McFadden's assessment of Seven's damages would be most unlikely to be adopted as a measure of any losses sustained by Seven, at least not without substantial modifications. Professor McFadden's assessment depends on a large number of assumptions, the bulk of which were vigorously challenged by the Respondents. My impression is that Seven would find it difficult to sustain certain of the important assumptions underlying Professor McFadden's approach. These include assumptions that Seven would have acquired the 2002 to 2006 AFL pay television rights for $22 million per annum; that subscriber numbers could have been expected to grow at the rates incorporated in Professor McFadden's calculations; that ' competitive arbitrage ' was an appropriate means of estimating C7's likely revenue from retail pay television operators; and that C7's return in the long run would have greatly exceeded the weighted average cost of capital. 75 My strong impression is that the maximum award of damages Seven could have expected, assuming it succeeded on questions of liability, would not have been anything like the figures mooted in Professor McFadden's report. I think it likely that, at best, Seven's damages on Scenario 1 would be assessed in some tens of millions of dollars, rather than in the order of $200 million (to which, on Seven's case, interest and an allowance for income tax would be added). I repeat that this is my impression of the maximum Seven could expect to obtain. The Court would need to address many arguments raised by the Respondents, in addition to those considered in the Principal Judgment, before reaching this point, even if Seven were to succeed in establishing liability. 76 The difficulties with Professor McFadden's analysis became apparent during the course of argument, but would not necessarily have been apparent to Seven or its advisers in August 2005. It is fair to say, however, that Seven or its advisers would have had material available that should have alerted them to the real prospect that Professor McFadden's analysis would prove to be vulnerable on some issues. 77 A further matter in the Costs Respondents' favour is that the joint offer of compromise was made shortly before the trial, at a time when Seven had the benefit of very nearly all the statements or reports (other than statements or reports in reply) on which the respondents intended to rely. Furthermore, I am prepared to infer that the position papers exchanged at the mediation which preceded the joint offer of compromise would have drawn Seven's attention to what the respondents asserted at the time were the significant weaknesses in its case. 78 While the matters relied on by the Costs Respondents have considerable force, it is necessary, as Mr Sheahan argued, to take into account a number of factors in Seven's favour on the indemnity costs issue. It did so over the strenuous opposition of the Respondents. This finding opened a pathway to a favourable outcome for Seven's case under s 45(2) of the TP Act , insofar as it was based on anti-competitive effects of the Master Agreement Provision. • I made other findings in the Principal Judgment that were favourable to Seven's case. These included a finding that the Master Agreement existed and that the Master Agreement Provision was likely to have the effect that Foxtel would acquire the AFL pay television rights for 2002 to 2006 ([2281]). • Seven's effects case under s 45(2) of the TP Act included its contention that the Foxtel-Optus CSA had the effect or likely effect of substantially lessening competition in the retail pay television market. This contention failed, largely because of findings that Optus would not have continued as a serious competitor in the retail pay television market, regardless of the alleged anti-competitive conduct (see, for example, [2309]-[2310]). While there was material available to Seven in August 2005 that suggested that such findings would be made, the material was by no means unequivocal. Moreover, Mr Lee's statement had not been filed at that time (it was dated 16 September 2005). Accordingly, if the position is viewed as at August 2005, Seven was reasonably entitled to consider that the Respondents might not have obtained the findings they sought in relation to Optus' role in the retail pay television market. • Seven's case on the other three markets propounded by it was supported by detailed reports prepared by two well-credentialled experts. While Seven must have known that the experts would be strongly challenged and must also have appreciated that certain assumptions made by them might be difficult to sustain, this is by no means unusual in a case involving complex market definition issues. Seven could reasonably have taken the view in August 2005 that it had an arguable case in relation to the existence of the AFL and NRL pay rights markets and of the wholesale sports channel market. Moreover, both of Seven's competition experts were made aware of the proposal by Seven and Ten in 2005 to acquire the AFL broadcasting rights for 2007 to 2011. Both indicated that the information did not alter the opinions they had expressed. • The discovery process elicited documents that, on their face, provided support for some of Seven's key contentions. These included the internal Telstra communications referring to Mr Blomfield's ' killing C7 ' statements ([2529]-[2530]); the congratulatory email sent by Mr Mansfield, the Chairman of Telstra, on 20 December 2000 ([1112]); and documents perhaps suggesting that written statements of Mr Macourt and Mr Philip were not necessarily to be accepted at face value. Even if Seven's damages should realistically have been regarded as limited to a maximum figure in the tens of millions of dollars, rather than hundreds of millions, the offer of compromise valued Seven's claim at a very low figure indeed. It is true that Seven, had it accepted the offer, would have received a very substantial sum by way of costs. But the sum of $10 million would have been unlikely to make up the deficiency between the costs actually incurred by Seven up to August 2005 and the amount it would have recovered from the respondents, given that the offer provided for costs to be assessed on a party and party basis. 80 It must also be remembered that the offer of compromise was made on behalf of all respondents. If Seven accepted the offer, it would have foregone the opportunity to pursue any of its causes of action. The offer did not invite Seven to distinguish between its speculative, if not hopeless, causes of action and its arguable contentions. 81 On balance, although the question is not easy to resolve, I do not think that the Costs Respondents have established that Seven's rejection of the offer in August 2005 was imprudent or unreasonable. It may well have been both imprudent and unreasonable for Seven to press so many contentions at the trial, having regard to what it knew or should have known before the trial got under way. It also might well have been imprudent and unreasonable for Seven not to have refined its case, both to make it more manageable (and therefore less costly to everyone involved) and much more focussed. As I indicated in the Principal Judgment, the massive costs incurred in the conduct of this litigation have been greatly disproportionate to what is truly at stake. But these are not the matters upon which the Costs Respondents rely in order to support their claim for costs to be awarded on an indemnity basis. They rely only upon the rejection of the joint offer of compromise in August 2005. 82 The joint offer of $10 million, inclusive of adjustments for interest and income tax, plainly reflected the respondents' collective view that Seven's prospects in the litigation were bleak. The result, at least to this stage of the litigation, has vindicated the respondents' view. But looking at the offer prospectively as at August 2005, I think the sum of $10 million offered can be regarded as very modest, although I would not characterise it as ' derisory '. 83 The description of the offer as very modest is apt, in my opinion, not merely when the offer is compared with Seven's more optimistic claims for relief but also (so far as I can judge) when compared with quantum of damages that Seven could have realistically hoped to achieve, if it had succeeded in establishing liability. It is true that the offer of compromise included payment of Seven's costs on a party and party basis and that, by August 2005, Seven had incurred very substantial costs. Nonetheless, if Seven had accepted the respondents' offer of compromise in August 2005 it would have gained nothing from the litigation. 84 While there were aspects of Seven's case that were untenable and should have been recognised as such in August 2005, in my view the core of Seven's case based on alleged contraventions of ss 45(2) and 46 of the TP Act could reasonably have been seen at the time as having some prospects of success. If Seven had succeeded in establishing the liability of some or all of the Consortium Respondents, it might have obtained an award of damages considerably greater than the sum of $10 million proposed in the joint offer of compromise. As I have explained, I do not think that there was ever any realistic chance of Seven obtaining the full range of remedies sought by it. Although I think it very likely that the maximum award of damages that Seven could have realistically hoped to achieve would be measured in the tens of millions of dollars, as at August 2005 an award of damages substantially greater than $10 million was not a fanciful prospect. Given that the Costs Respondents accept that I am bound by Dukemaster and that the critical question is whether Seven acted imprudently or unreasonably in rejecting the joint offer of compromise, their application for the costs incurred after 16 August 2005 to be awarded on an indemnity basis cannot succeed. It follows that Seven will only be required to pay the costs of the Costs Respondents on the usual party and party basis. 86 The costs application will now proceed in accordance with the directions I have made. In light of this ruling, it is to be hoped that Seven and the Costs Respondents can reach agreement on the quantum of costs to be paid by Seven. I certify that the preceding 86 numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. | application for costs on an indemnity basis applicants reject a joint offer of compromise pursuant to fcr , o 23 applicants fail entirely whether rejection of offer imprudent or unreasonable costs |
The asserted basis of invalidity was that the application was not completed by the appellant or on his instructions. It was drafted by his migration agent but not signed by the appellant and contained incorrect information. The additional ground of appeal was a failure on the part of the Refugee Review Tribunal to comply with s 424A of the Migration Act 1958 (Cth) with respect to an application to review the decision of the Minister's delegate to refuse a protection visa. 3 The appellant relied upon evidence before the Federal Magistrate. The evidence was that the appellant had given instructions to his migration agent to lodge a protection visa application. The appellant had not been informed that the protection visa application had been refused and did not know of the decision of the delegate refusing his application. He had given no instructions to lodge any application to the Tribunal and the purported application to the Tribunal was not made on his instructions. 4 Driver FM accepted the appellant's evidence. In particular, his Honour accepted at [31] that the appellant did not authorise the making of the review application. He did not sign it and it was not made on his instructions. His Honour concluded that there was no valid review application and that the Tribunal had no jurisdiction to make any decision on it. Driver FM declared the application to the Tribunal invalid and ordered that a writ of certiorari issue quashing the decision of the Tribunal. 5 Ultimately, Mr Hirsch who appears for the appellant, properly conceded that there was no error in the Federal Magistrate's approach. Mr Hirsch conceded that in view of the Federal Magistrate's conclusion on this aspect, the ground of appeal asserting jurisdictional error on the part of the Tribunal in failure to comply with s 424A of the Act and failure on the part of the Federal Magistrate to consider such compliance does not arise. He contended that the visa application was not signed by the appellant or by anyone authorised by him. The residential address details given for the appellant were false and were not authorised by him and much of the detail of the protection visa claims made in the purported visa application were inventions of the agent and were not authorised by the appellant. In the circumstances, Mr Hirsch submitted that the protection visa application was incorrect and invalid. 7 The Federal Magistrate referred to NAWZ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 199 and s 98 of the Act. He found on the evidence that the appellant had authorised the migration agent to make a protection visa application on his behalf. His Honour concluded at [38] that the instructions were general and that the appellant expected the migration agent to do everything necessary to lodge a protection visa application on his behalf. That authority extended to signing the application on behalf of the appellant. 8 His Honour did not make a finding of a common purpose to mislead the Minister with a false protection visa application, as had been found in NAWZ, or of bad faith. His Honour did, however, apply the principle in NAWZ to find that the appellant was, by the application of s98 of the Act, responsible for the false application. As the Full Court stated at [16], the appellant is fixed with responsibility for the actual content of the false application filled in on his behalf. 9 Mr Reilly, who appears for the Minister, submits that the appellant's protection visa application meets the test of substantial compliance with the Act and Regulations. The fact that the appellant did not sign it himself and it did not contain his correct address or correct details of his history does not render the application invalid ( Bal v Minister for Immigration and Multicultural Affairs (2002) 189 ALR 566 at [34]---[45]). 10 The Full Court in Bal upheld the principle that a "substantial compliance" requirement is applicable to the visa application form. Substantial compliance is to be assessed by reference to the purpose of the form in eliciting the applicant's claim to be a refugee within the Convention and the questions posed in the form were only guidelines to that end. In Bal the Full Court held that it was sufficient that only the "bare bones" of Mr Bal's claims were outlined in the form, namely that the applicant had a well-founded fear of persecution at the hands of the Turkish police for reasons of religion, membership of a particular social group and political opinion, in particular by reason of his being a Kurd and a Christian. 11 In this case, the appellant had made a claim in the visa application of persecution based on the practice of Falun Gong. The appellant submitted that the detail of his claims as recorded in the visa application were false. At [19] of his decision, the Federal Magistrate noted the appellant's oral evidence that he had told his migration agent about his alleged persecution in China due to his practice of Falun Gong. It is clear that, while the details of his claim in the visa application were incorrect, the core claim of persecution by reason of his practice of Falun Gong was correct. Accordingly, the visa application contained the "bare bones" of the appellant's claim. 12 It was sufficient that the application recorded the Convention basis of the appellant's claim to be a refugee. In my opinion, the fact that the application was not signed by the appellant, his residential address was incorrect and that the details provided of his claims were not authorised do not prevent "substantial compliance" from being achieved. The migration agent's name and address were completed and correct (s494D of the Act). It was a false application but it was, in formal terms, a valid application ( NAWZ at [16]-[18]). 13 In different ways, the appellant asserts that there was no authorisation of the specific visa application and that, consequently, it was not valid. Mr Hirsch seeks to equate the facts concerning the visa application with those concerning the application for review to the Tribunal. He asserts error in the finding of validity of the former and of invalidity of the latter. 14 The Federal Magistrate drew a distinction between the authorisation given to the agent to complete or lodge a visa application and the lack of authorisation to file any application for review. That has not been shown to be in error. The grounds of appeal and written submissions do not properly reflect the Federal Magistrate's reasons and the distinction there drawn between the authority given to the agent to file the visa application and the lack of any authorisation to file the application for review. While he did not specifically authorise the inclusion of incorrect or incomplete information, as in NAWZ, s 98 applies. Section 98 does not require a covert purpose to mislead. The Federal Magistrate was not in error in finding that, in the circumstances, the visa application was valid. 17 The appellant relies upon the conduct of the migration agent who ' deprived the appellant of the opportunity of a proper merits review '. That does not render the visa application invalid. I agree with Mr Hirsch that the consequences for the appellant are most unfortunate, to say the least. I note that the Federal Magistrate has accepted that the actions of the migration agent were without instructions and fatal to the proper consideration of the appellant's visa application. Although the application to the Tribunal was invalid, the appellant is now out of time in which to lodge a fresh application for review of the delegate's decision. It has been suggested that the appellant may consider an application to the Minister pursuant to s 48B of the Act. 18 The appeal is dismissed with costs. I certify that the preceding seventeen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | visa application authorised to be completed by appellant's agent, completed on instructions and containing incorrect information visa application valid application for review completed by appellant's agent without any authority application for review invalid migration |
The project was operated by a group of companies. It was known as the ACM Breeding Project (ACM). In their income tax returns for the year ended 30 June 1996 they claimed as deductions expenditure incurred in connection with their investment in the ACM. Mr Starr claimed "primary production losses" in the sum of $35,832. Mr Hopkins claimed $23,888. 2 On 11 August and 19 October 2000 respectively the Commissioner for Taxation (the Commissioner) issued amended assessments under the Income Tax Assessment Act 1936 (Cth) (ITAA) to Messrs Starr and Hopkins in respect of the year of income ended 30 June 1996. The amended assessment in each case was based upon a determination by the Commissioner under Pt IVA of the ITAA that the amounts claimed as deductions were deductible but in each case constituted a tax benefit for the purposes of Pt IVA and on that basis should be disallowed. In the case of Mr Starr his assessment was amended by increasing his taxable income by the amount of $35,832 representing his claimed ACM outgoings as a deduction. It was determined by a delegate of the Commissioner under s 177F of the ITAA to be a "tax benefit" referrable to a deduction claimed for the year of income ended 30 June 1996 which should not be allowable in relation to that year of income. An understatement penalty and interest in the amount of $6,571.56 was imposed. That comprised $1,486.71 by way of penalty and $5,084.85 by way of interest on the penalty. A notice of objection to the amended assessment was lodged on 15 October 2001 and disallowed by notice from the Commissioner dated 6 March 2003. Mr Hopkins' amended assessment added the sum of $23,888 to his taxable income for the same year and imposed an understatement penalty and interest of $8,422.85. Of that, $4,677.35 was penalty and the balance was interest. Mr Hopkins also objected and his objection was disallowed on 6 March 2003. 3 In a test case relating to the ACM breeding project, Vincent v Federal Commissioner of Taxation [2002] FCAFC 291 ; (2002) 124 FCR 350; 193 ALR 686, the Full Court of the Federal Court held that management fees and interest claimed as deductions by another of the investors Ms Vincent, were on capital account. They had been outlaid essentially for the acquisition of calves under the scheme. Being on capital account they were not deductible. There was therefore no tax benefit obtained through the project, albeit it had been determined to be a Pt IVA scheme by the Commissioner. In the reasons for disallowing the objection to the amended assessments, the Commissioner referred to Vincent's case. The penalties imposed on Mr Starr and Mr Hopkins respectively were 10 per cent of the tax shortfall and 50 per cent of the tax shortfall. However in the course of determining your objection we have reviewed the interest payable and concluded that no remission is warranted. If you are dissatisfied with our decision in relation to the interest you may apply to have the decision reviewed under the Administrative Decisions (Judicial Review) Act 1977 . In his case the penalty was fixed at the flat rate of 50 per cent of the amount of the primary tax applicable to the adjustment. That level of penalty was fixed pursuant to s 226L and, unlike Mr Starr's case, was not reduced by the discretionary remitter available under s 227 of the ITAA. 5 Mr Starr and Mr Hopkins both sought review, in the Administrative Appeals Tribunal (the Tribunal), of the decision of the Commissioner disallowing their objections. The issue on review was confined to the level of penalty. On 19 August 2005, the Tribunal affirmed the decisions under review. Messrs. Starr and Hopkins then filed notices of appeal against the Tribunal's decision in the original jurisdiction of this Court pursuant to the provisions of the Administrative Appeals Tribunal Act 1975 (Cth). For the reasons that follow, I am of the view that their appeals are made out, that the Tribunal's decision should be set aside and the objections allowed. By operation of s 222AA it does not apply to "statements made, or schemes entered into, in relation to the 2000-01 year of income or a later year of income". It has been replaced by Div 284 of Schedule 1 of the Taxation Administration Act 1953 (Cth) (TAA) given effect by s 3AAA of that Act. Division 284 of Schedule 1 is entitled "Administrative penalties for statements, unarguable positions and schemes". Part VII as it stood prior to the introduction of the new TAA provisions in 2000 had been in place since 1984 when it was substituted for the former Pt VII entitled "Penal Provisions and Prosecutions". 7 Part VII comprised ss 222A to 228. Section 222A contained definitions of terms used in Pt VII. Further interpretation and deeming provisions were found in ss 222B ("Taxation Statements") and 222C ("Reasonably Arguable"). 8 Section 222D was an interpretive provision relevant to s 226L which was relied upon by the Commissioner in this case and is set out below. 9 Section 224 established penalties where tax avoidance provisions, not including Div 13 of Pt III or Pt IVA, were invoked by the Commissioner. It applied where the Commissioner had calculated the tax assessable to a taxpayer (s 224(1)(a)) and in so doing had included an amount in the assessable income or not allowed a deduction or rebate (s 224(1)(b)) and the inclusion or disallowance depended on his forming an opinion or state of mind or determination or upon the exercise by him of a power that related to "a tax avoidance scheme" (s 224(1)(c)). If the taxpayer had not included, in the return, the amount included by the Commissioner or if the taxpayer had claimed a deduction or rebate disallowed by the Commissioner (s 224(1)(d)) then the taxpayer was liable to pay, by way of penalty, additional tax. The additional tax was calculated at 50 per cent of the relevant difference or, 25 per cent if the non-inclusion of income or the deduction were "reasonably arguable" (s 224(3)). 11 Section 225 concerned penalty tax cases in which Div 13 of Pt III applies. That Division relates to international agreements and the determination of the source of certain income. Under s 136AD where a taxpayer has supplied property under an international agreement and the Commissioner is satisfied that the parties to the agreement were not dealing at arms length with each other in relation to the supply and the consideration was less than arms length consideration, then consideration equal to the arms length consideration shall be deemed to have been received or receivable by the taxpayer. Under s 136AE the Commissioner can make a determination as to the source of income in such cases. Section 225 of Pt VII applied penalties where the taxpayer had lodged a return on the basis that a prescribed provision (s 136AD or s 136AE) did not apply and the Commissioner had applied one or both of them to assess a greater amount. Where the prescribed provision or provisions were applied in relation to a scheme within the meaning of Pt IVA and "the scheme was entered into or carried out for the sole or dominant purpose of enabling a person to pay no tax or less tax" then additional tax at 50 per cent or 25 per cent of the difference was payable by way of penalty. The rate depended upon whether the non-application of the prescribed provision or provisions was "reasonably arguable". 12 Section 226 provided for penalty tax where Pt IVA applied. It applied, in substance, where the Commissioner had made a determination under s 177F and tax was payable which otherwise would not have been payable. There was no separate reference to a tax avoidance purpose. Section 226AA dealt with penalties in Pt IVA cases where foreign credits claimed were disallowed. Sections 226B to s 226K dealt with mitigating or aggravating circumstances affecting penalties such as voluntary early disclosure, lack of reasonable care, recklessness, intentional disregard of the law and the adoption of an unarguable position. It is sufficient to say that the income tax returns lodged by Messrs. Starr and Hopkins for the year ended 30 June 1996 would have constituted taxation statements within the meaning of the section. 15 The term "scheme" was not defined. The definition of "tax avoidance scheme" in s 224 above, was incorporated by reference in s 226L. 16 Section 227(3) provided for the discretionary remitter, by the Commissioner, of the whole or any part of the additional tax payable by a person under a provision of Pt VII. 17 It is necessary also to have regard to Pt IVA. It is the core provision in that section pursuant to which tax benefits obtained under a scheme may be disallowed. By the making of the various Scheme Arrangements and the various steps and transactions carried out pursuant to the Scheme Arrangements, their participation in ACM constituted a scheme for the purposes of s 177A of Pt IVA of the ITAA. 2. Because they claimed as deductions project costs of $35,832 that Mr Starr incurred and $23,888 which Mr Hopkins incurred, and because those deductions were not allowable under s 51(1) of the ITAA, as the Full Court found in Vincent [2002] FCAFC 291 ; 124 FCR 350 , the applicants each had a shortfall within the meaning of s 222A of the ITAA. 3. For the purposes of s 226L(b) of the ITAA the tax shortfall was caused by each of the two applicants, in a taxation statement (s 222A of the ITAA), treating an income tax law as applying in relation to the scheme in a particular way. 4. For the purposes of s 226L(d) of the ITAA, none of the scheme sections as defined by s 222A applies in relation to the scheme. 20 No oral evidence was given before the Tribunal. The decision was made upon the affidavits and upon papers lodged with the Tribunal by the Commissioner. There was no cross-examination on the affidavits. The affidavit of Kevin Phillip Sleight sworn 3 March 2005. He introduced Mr Starr to the ACM project in June 1996. He recalled Mr Starr was very interested in the commercial aspects of the ACM project and primarily concerned with making an investment that would increase his income in retirement. Mr Sleight's sole purpose in recommending that Mr Starr invest in the project was to increase his wealth from profits from sale of cattle under the project. The commission that Mr Sleight received as a result of Mr Starr entering into the project was not contingent on Mr Starr receiving a tax deduction. 2. The affidavit of Rodolfo Del Carlo sworn 3 March 2005. He said that his sole purpose in introducing Mr Hopkins to the project was for Mr Hopkins to make a profit. He received a commission as a result of the investment but the commission was not contingent on Mr Hopkins claiming or receiving a tax deduction. 3. The affidavit of Donald St Clair Starr sworn 8 March 2005 . Mr Starr said that before investing in the ACM project he had discussions with Mr Sleight about the cost of entry and the length of time it would take him to derive an income stream from the project. He said he was 51 years old at that time and wanted to retire early. He had no previous experience in cattle breeding but was encouraged by the fact that the Poll Hereford breed of stud cattle was being used as he knew them to be of a very high quality. Although he had given some consideration to the availability of tax deductions for the various expenses of the project, this was not the dominant reason or purpose behind his eventual decision to enter into it. His main concern related to the profit projections and whether it would be possible to make a sizeable profit from his investment. If he had thought the project would not have been profitable he would not have invested irrespective of the potential for tax deductions. He made cash payments of $12,909 to the project. 4. The affidavit of Gary Kevin Hopkins sworn 9 March 2005 . Mr Hopkins said that before investing in the ACM project he had discussions with Mr Del Carlo about the investment. He read the relevant information booklet. The most important aspects of the project so far as he was concerned were the income projections contained on pages 16 and 17 of the information booklet. He was aware at the time that the prices being received at cattle sales were going through a prosperous period. He was also aware of the high quality of the Poll Hereford breed of stud cattle to be used in the project. He said he considered the projections of profit of approximately $12,600 per two cows to be profitable and worthwhile and realistic at the time that he invested. He said that his ability to claim tax deductions for various expenses related to the project was a factor he had considered before investing in it, but not the main reason or purpose behind his decision to invest. He said tax implications are always taken into account, but the obtaining of a substantial profit was his main objective and the profit projections were the most important part of his assessment. He said that if he had not believed that the project would be profitable he would not have entered into it. He made cash payments of $8,640 to the project. There was no other affidavit material before the Tribunal. It was not in dispute that for the purposes of s 226L(d) of the ITAA none of the "scheme sections" applied in relation to the participants in ACM. One of those conditions, and the one most relevant in this case, is that the particular scheme was a " tax avoidance scheme " for the purposes of section 226L(c) of the ITAA. Pursuant to section 226L, the rates of penalty that apply are 50% of the amount of primary tax applicable to the adjustment, or if it is reasonably arguably that the deduction claimed was correctly allowable, 25% of the primary tax applicable to the adjustment. It was conceded on behalf of the applicants that the project was a scheme within the meaning of Pt IVA and accordingly within the terms of s 177A of the ITAA. In the end the Tribunal's decision about the application of the penalty under s 226L depended upon whether the "sole or dominant purpose" referred to in s 224(2) was to be assessed as a subjective purpose or an objective and, I interpolate, attributed, purpose. 23 The Tribunal observed that Pt IVA requires the purpose of a scheme to be assessed objectively. So much flows from the language of s 177D which applies when the taxpayer has obtained a tax benefit and "it would be concluded that the person or one of the persons who entered into or carried out the scheme ... did so for the purpose of enabling the relevant taxpayer to obtain a tax benefit in connection with the scheme". The Tribunal accepted the submission on behalf of the Commissioner that the language of s 224(2) indicated that an examination of the objective facts and circumstances surrounding the scheme was necessary and that this "tied in with the objective inquiry required in Pt IVA". 24 The Tribunal found that the ACM scheme was a tax avoidance scheme in terms of s 224(2) of the ITAA entered into or carried out with the sole or dominant purpose of enabling the participants and, in this case, the applicants, to pay no tax or less tax. Section 226L therefore applied. The applicants had not provided any evidence that their involvement in the ACM scheme was objectively different from the facts and circumstances ruled upon by the Federal Court in the case of Vincent [2002] FCAFC 291 ; 124 FCR 350. Accordingly, the Tribunal found the applicants had not "discharged their onus". The central issue emerging from the grounds of the appeal was whether the Tribunal erred in law in holding that s 224(2) does not involve an inquiry into the subjective purposes of the taxpayers concerned. The state of mind in issue in that case was the purpose for which company directors were raising funds on debentures. The question was whether a deliberate misstatement of their purpose would ground an action for deceit. A misrepresentation as to the state of a man's mind is, therefore, a misstatement of fact. The finding of a mental state as a fact referred to in a statute may be a traditional process of inference based on objective and subjective evidence. Sometimes however, it is a matter of legal attribution independent of the actual mental state of the parties concerned. 29 The debate in this case was joined as a debate between a construction of s 224(2) which says that the "purpose" to which it referred is to be subjectively determined and the construction which says it is to be objectively determined. In my opinion however, the relevant dichotomy is between a mental state inferred by reference to subjective and objective evidence and a mental state attributed on the basis of objective evidence which excludes consideration of the actual mental states of those behind or entering into the scheme. 30 Terms describing mental states are used in a variety of legal settings. Their use is generally directed to the resolution of issues about legal rights or liabilities. Mental states may however be no more than a statutory label attaching to a particular outcome. Indeed in some contexts they are used in this way in judicial reasoning. The function of the concept of intention in legal discourse is hence not logical, but ideological. It is also said that such an intention is to be determined objectively. That is not a process leading to an inference about an actual mental state. It is rather a matter of "attribution" of mental states regardless of what the parties now say that they intended. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties. One is as a process of inference constrained because it excludes from consideration evidence of what the parties say their mental states were. The other is as a process of attribution. The latter is probably the more accurate characterisation. 34 The fictional mental states of corporations are attributed rather than ascertained. A corporation is a fictitious legal person. It exists only in a kind of virtual reality created by the law. In order to allocate rights and liabilities the law treats a corporation as though it has a mind and as though that mind has mental states. So a corporation may have purpose. And although it is an attributed purpose because the corporation is a fictitious person, its purpose may be assessed subjectively or objectively. 35 An example is to be found in the provisions of competition law relating to corporate purpose. The Trade Practices Act 1974 (Cth) prohibits a corporation from engaging in various kinds of conduct with defined anticompetitive purposes. Section 45 prohibits corporations, under certain conditions, from entering into contracts, arrangements or understandings which contain exclusionary provisions. A provision answers that description if it "has the purpose of preventing, restricting or limiting" the supply of goods or services to or the acquisition of goods or services from certain persons or classes of person (s 4D). Section 46 prohibits corporations with a substantial degree of power in the market from taking advantage of that power for purposes including eliminating or substantially damaging a competitor. Section 47 prohibits exclusive dealing for the purpose of substantially lessening competition. 36 The definition of "exclusionary provision" in s 4D relates it to "purpose" in rather the same way that the definition of "tax avoidance scheme" in s 224(2) of the ITAA relates such a scheme to its purpose. In the first case the purpose is that of the relevant provision. In the second, the purpose is that of the scheme. 37 Despite the use of "purpose" in s 4D of the Trade Practices Act as an attribute of the provisions defining exclusionary contracts, arrangements or understandings and despite its attribution to corporations, it has been treated as amenable to subjective inquiry. It cannot exist anywhere else. The word can be used to designate either the main object which a man wants or hopes to achieve by the contemplated act, or it can be used to designate those objects which he knows will probably be achieved by the act, whether he wants them or not. In such contexts, the tribunal of fact deduces the purpose of the artificial or notional person from the background of the act or omission including relevant statements and what was done or not done. Similarly, when legislation refers to the purpose of a provision, it is not absurd to regard the legislature as referring to the purpose in the notional mind of those responsible for the provision. In such cases, the test must inevitably be an objective test. That conclusion was not inconsistent with the proposition that even though it is the subjective mental state of a person that is to be attributed, objective evidence about the likely effect of the person's conduct may be the best evidence. The statements of parties about their purposes will often be treated with reserve: Dowling v Dalgety Australia Ltd (1992) 34 FCR 109; ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 at 483. 39 Gummow J referred to the terms of s 4F of the Trade Practices Act as contextual support for a subjective approach to the determination of the purpose of a provision under s 4D (at [61] --- [66]). 41 Section 47(10)(a) speaks of a circumstance in which the engaging by a corporation in conduct "has the purpose...". This is more readily amenable to a subjective construction of purpose than s 4D and has been so construed: Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193 ; (2003) 131 FCR 529. What has to be shown in such a case is "the actual purpose of the relevant respondent". Where a mental state is referred to it should be construed as an actual mental state unless the context indicates a constructive or attributed mental state. The taxpayer has a tax shortfall for a year. The shortfall was caused in whole or in part by the taxpayer treating an income tax law as applying in relation to a scheme in a particular way. 3. The scheme was a scheme within the meaning of Pt IVA that was entered into for the sole or dominant purpose of enabling a person to pay no tax or less tax. 4. The scheme is not one in relation to which ss 224, 225, 226 or 226AA apply. While the shortfall to which the section applied must be caused by the taxpayer's treatment of income tax law as "applying in relation to a scheme in a particular way" it does not flow from the Commissioner's characterisation of the scheme as a tax avoidance scheme whether under Pt IVA or any other provision of the Act nor upon any action by the Commissioner consequential upon such characterisation. It was, in the light of the Full Court decision in Vincent [2002] FCAFC 291 ; 124 FCR 350 , capital expenditure and therefore not deductible. That characterisation did not depend upon the status of the ACM project as a scheme to which Pt IVA applied within the meaning of s 177D. 47 The schemes in relation to which s 226 applied were tax avoidance schemes within the meaning of s 224. The definition of "tax avoidance scheme" in s 224(2) had two elements. The first was that it be "a scheme within the meaning of Part IVA". That picked up the definition of "scheme" in s 177A. Importantly, a "scheme within the meaning of Part IVA" was not thereby "a scheme to which Pt IVA applies". The latter category is defined in s 177D and is a subclass of schemes within the meaning of Pt IVA. It is limited, inter alia, by the requirement that "it would be concluded that the person, or one of the persons who entered into the scheme or any part of the scheme did so for the purpose of enabling the relevant taxpayer to obtain a tax benefit in connection with the scheme ...". The section does not require an inquiry into the actual mental state of the taxpayer or anybody else concerned with the scheme but rather into what "would be concluded" about purpose after consideration of the eight factors listed in the section. 48 In determining the nature of the inquiry into the purpose referred to in the definition of "tax avoidance scheme" in s 224(2) it is important not to be distracted by s 177D. That section, unlike s 224(2), is concerned with what "would be concluded" about the purpose of those entering into a scheme having regard to the eight listed factors. That inquiry differs from the inquiry mandated by s 224(2). It defines the field of considerations from which an attribution of purpose can be made. It does not extend to actual states of mind. 49 What is to be considered in assessing purpose under s 224(2) is determined by reference to the ordinary meaning of its words having regard to context and purpose. They carried that interpretation with them into s 226L. Section 226L picked up the definition from s 224(2) rather than setting out its own. It was the definition as construed in the context and for the purpose of s 224 that therefore applied to s 226L. It used the relevant purpose to define the subclass of schemes which are "tax avoidance schemes" for the purpose of s 224. 2. The relevant sole and dominant purpose was that for which the scheme "was entered into or carried out". 3. The use of the words "entered into" or "carried out" suggest that the provision was formulated on the apparent assumption that the relevant inquiry was into the existence of an actual rather than attributed purpose. In my opinion the word "purpose" in the definition of "tax avoidance" in s 224(2) should be taken, like "purpose" in s 4D of the Trade Practices Act , to have referred to the purpose of those who entered into the relevant scheme. In this case the purpose is that of the taxpayers, Messrs Starr and Hopkins, and possibly also those of their advisors. The uncontested evidence of all of them was that their purpose in entering into the scheme was to obtain a commercial return. While tax benefits were relevant, they were not the sole or dominant purpose. 51 The language of s 224(2) may be contrasted in this respect with that of the former s 260, the ill-fated general anti-avoidance section. That section applied to "[e]very contract, agreement or arrangement ..." "so far as it has or purports to have the purpose or effect of in any way, directly or indirectly ....", inter alia, "defeating, evading or avoiding any duty or liability imposed on any person by this Act. These terms may be oral or written or may have to be inferred from the circumstances but, when they have been ascertained, their purpose must be what they effect. However the language used in s 260 differed significantly from that of s 224 which refers to the "entry into or carrying out" of a scheme for the sole or dominant purpose of tax avoidance. See generally as to the relationship between s 260 and Pt IVA: Parsons, Income Taxation in Australia (Law Book Co, 1985) at 16-24 to 16-30. 52 It is to be recalled that s 226L was a penalty provision. The fact of entry into a tax avoidance scheme was a necessary condition of the imposition of the penalty for which it provided. If the purpose of penalties is to secure compliance with the tax laws, they may ordinarily be expected to be concerned with the conduct and purposes of defaulting taxpayers. That is to say their actual conduct and actual purposes. It is difficult to see why if two constructions of s 224(2) be available that construction should be adopted which would permit the imposition of a penalty by reference to a purpose which the taxpayer never had. Of course, purpose could be assessed even under s 224(2) by reference to objective factors. It may also be that the statements of individual taxpayers about their purposes relevant to the imposition of penalty would be given little weight. But the relative weight and extent of subjective and objective evidence relevant to that determination will be an accident of the particular proceedings in which the question arises. In this case the evidence of the taxpayers and the advisors was unchallenged. 53 In my opinion, the Tribunal erred in law in excluding consideration of the stated purposes of Messrs Starr and Hopkins. Their statements were not contested. They were not inherently improbable. The Tribunal came to a contrary conclusion evidently based upon that reached by the Federal Court in Vincent [2002] FCAFC 291 ; 124 FCR 350 about the application of Pt IVA . In my opinion, however, there is no point in remitting these matters to the Tribunal as the evidence about the taxpayers' actual purposes in entering the schemes was not contested by the Commissioner. In the circumstances, the decisions of the Tribunal will be set aside and the objections allowed. The parties will be given liberty to apply for any necessary consequential orders. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | income tax penalty tax shortfall derived from treating income tax law as applying in relation to a tax avoidance scheme tax avoidance scheme whether entered into or carried out for the sole or dominant purpose of enabling a person to pay no or less tax subjective or objective determination subjective inquiry appeal allowed taxation |
The Tribunal affirmed a decision of a delegate of the Minister not to grant the appellant a protection visa. The appellant is a citizen of the Peoples Republic of China. He claimed to have a well-founded fear of persecution on political grounds arising from steps taken by him in his capacity as Deputy General Manager of a large construction company to obtain proper compensation for the company's injured workers. The Tribunal considered the appellant's claim to have been the Deputy General Manager to be an integral aspect of all his claims. However, it rejected the claim that he had held that position and this effectively led to the rejection of his claim to have a well-founded fear of persecution. The appellant raised a number of grounds of review, all of which were rejected by the learned Federal Magistrate. The grounds of review included a claimed breach of s 424A(1) of the Migration Act 1958 (Cth) ("Act"). The only real issue which arises on the appeal is one that I raised with counsel for the Minister. This ground raises a question of procedural fairness, or its analogue under the Act, in relation to the way in which the Tribunal brought to the appellant's attention the critical issue, or the reason, or part of the reason, for affirming the delegate's decision. This raises a possible breach of s 424A(1) of the Act, though not that which was argued before the Federal Magistrate. It also raises a question of the operation and effect of s 422B(3). In particular, the question which arises is whether the obligation of the Tribunal to act in a way that is fair and just enlarges the obligations of the Tribunal under s 424A(1). The Tribunal's concerns regarding the appellant's evidence arose from the appellant's youth and inexperience to hold such a senior position. Its doubts were increased by the results of an internet search conducted by a Chinese speaking member of the Tribunal's staff. The search indicated that a document provided by the appellant confirming his employment as Deputy General Manager of the company had been signed by a person who was held responsible "as the legally appointed representative of the company" for issuing false employment certificates for other people. The Tribunal raised this with the appellant, both at the oral hearing and in a letter which it sent to him under s 424A of the Act. However, in doing so, the Tribunal did not provide the appellant with the full terms of the information which it had obtained. Thus, the essential issue on the appeal is whether the Tribunal was required to give to the appellant particulars of the information, which included a statement made to the Presiding Member of the Tribunal that it was not clear whether Mr Liu was implicated in the falsification of documents. (2) Sections 416, 437 and 438 and Division 7A, in so far as they relate to this Division, are taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters they deal with. (3) In applying this Division, the Tribunal must act in a way that is fair and just. The particulars required by s 424A(1) must be given in writing: see s 424A(2). Section 424A(2A) creates an exception to s 424A(1) in that the Tribunal is not obliged to give written particulars of all information if the Tribunal gives clear particulars of the requisite information orally to the applicant at a hearing to which he or she has been invited under s 425. The appellant and his wife, who was also an applicant in the Tribunal, were assisted by a Mandarin interpreter. In his evidence on 21 January, the appellant stated that he had left high school at the age of 16 or 17, having completed Junior High School, and that one year later he commenced work with a company as a labourer. He said that he later became Deputy General Manager of that company when he was 23 years old. The Tribunal then informed him that it had doubts about this evidence, given the appellant's lack of qualifications and young age. There is a detailed account of the hearing in the Tribunal's reasons and a transcript of the hearing was in evidence on the appeal. I'll show you the document in a moment. Okay, now that document lists 10 people from the company under the heading Falsification People List. Okay, now the document indicates that Mr --- Mr Liu has been implicated as the legally --- so legally appointed representative of the company as falsifying documents. THE INTERPRETER: Falsifying? THE INTERPRETER: Okay. MS PINTO: ... Now, this seriously increases my concerns that your claim to have been the deputy general manager of the company is completely false. ... False documents have been provided by Mr Liu and I don't think you were employed as the deputy general manager at the construction company. Okay, now this would make me think that all of your claims are false because everything --- your claim to be the deputy general manager is very central to your claims of what you're doing and I don't --- as I've said, I don't think you were the deputy general manager, Mr [SZMHD]. The Tribunal explained to the applicant that the Department's file in relation to his visitor visa indicated that the Department did a check on his employment and it was found to be not genuine, but the Department was willing to grant the visitor visas because his brother was able to pay a bond of $15,000 per person. The applicant confirmed that he provided reference documents in relation to his visitor visa by Mr Liu Ming Jian. The Tribunal showed the applicant the Chinese characters of Mr Liu Ming Jian's name and he was confirmed [sic] that it was correct. The Tribunal advised the applicant that a Chinese speaking staff member had searched the Internet for the Chinese characters of Mr Liu's name and found a document entitled "Fujian Provincial partial list of falsification of manager's qualification certificates". The Tribunal advised the applicant that the document lists 10 people from the company and indicates that Mr Liu was held responsible as the legally appointed representative of the company for the falsification of documents. The letter, which was sent by facsimile, included the following statements to which the appellant was invited to respond:- The Department file indicates that when you made the application for the visitor visa you claimed that you were employed as the Deputy General Manager of the Dongsheng Construction Engineering Company. The documents that you provided to the Department confirmed your employment at the Dongsheng Construction Engineering Company and were signed by the General Manager, Mr Liu Ming Jiang. Checks on the Chinese character names of the General Manager, Mr Liu Ming Jiang, by a fluent Chinese speaking staff member of the Tribunal, also indicate that Mr Liu Ming Jiang has been held responsible as the legally appointed representative for falsifying manager's qualifications. The Tribunal has attached the Chinese version of this document for your information (2006, Fujian Provincial Partial List of Falsification of Manager's Qualification Certificates ). The Tribunal may conclude that you were not employed in that capacity for the company and that Mr Liu has provided false documents on your behalf. ... The Tribunal may conclude that as your claim to be the Deputy General Manager is an integral aspect of your claims, that your claims regarding the action that you took against the Chinese Erju Company whilst the Deputy General Manager of the Dongsheng Construction Engineering Company are false. The document was in Chinese but had some English handwriting on it. There were two different styles of handwriting but there was no evidence explaining the differences. The document was described by the Tribunal as "Fujian Provincial Partial List of Falsification of Manager's Qualification Certificates" and words to similar effect appear on the document in English handwriting. I would infer that those words were written by an employee of the Tribunal. I will attach as Annexure "A" a copy of the document which was attached to the s 424A letter. There was another copy of the list at AB 177. It was apparently attached to the email from the Chinese speaking member of the Tribunal. It was identical to that which I have included as Annexure "A", save that it had the name "Liu Ming Wen" in handwriting on it. For convenience, I will attach a copy as Annexure "B". The statutory declaration included the following:- The person who signed the employment reference in relation to my visit visa application should be "Liu, Ming Jian" instead of "Liu, Ming Jiang". Having carefully checked falsified people list in the form attached to Tribunal's fax dated 10 March 2008, I really could only find the name of "Liu, Ming Wen" instead of "Liu, Ming Jian". Also, the information only indicated some of people for falsifying manager's qualification; but it neither indicated that Dongsheng Company was a false company nor "Mr Liu, Ming Jian" was not a legal representative and general manager of the company. I have to emphasize that I am the Deputy General Manager of Dongsheng Company; and Mr Ming Jian Liu was the Legal Representative and General Manager of Dongsheng Company. I can't see anything else significant. I'll bring down the papers now. ... The "Contact person" for this company is Mr Liu Ming Jian --- the person who signed the applicant's document. .... This document is titled "Fujian Provincial Partial List of Falsification of Manager's Qualification Certificates". The document also lists 10 people from the company under the heading "Falsification People List" which could mean that these 10 people may have falsified certificates or that their certificates may have been falsified. It is not clear whether Mr Liu is implicated in the falsification, but it appears that he is being held somehow responsible as the legally appointed representative of the company. The document is undated, but the filename indicates it is from 17 May 2006. The Tribunal accepted that it was "plausible" that the company was involved in supplying workers for the construction of a tunnel for a large government owned corporation during 2005. It also accepted that the government owned corporation may not have paid reasonable compensation to injured and deceased workers or their families. The Tribunal also accepted that the appellant may have been employed on the project or otherwise involved in the construction of a tunnel. However, the Tribunal did not accept that the appellant was employed as the Deputy General Manager of the company. Nor did it accept that he had distributed petitions or agitated for the rights of injured workers and it did not accept that he had been detained or beaten as a result of those activities. The Tribunal did not accept the appellant as a credible witness and considered that he had relied upon some involvement in the tunnel construction project to fabricate a set of claims in support of his application for a protection visa. It then set out its reasons for this finding. As indicated above, the applicant claimed in his application for a Subclass 679 (Visitor visa) that he was the Deputy General Manager of the Dongsheng Construction and Engineering Company. The Department's inquiries in relation to the visitor visa application indicated that the applicant's claimed employment was found to be "non-genuine". The evidence before the Tribunal also indicates that Mr Liu Ming Jian, the General Manager of the Dongsheng Construction and Engineering company provided documents supporting the applicant's visitor visa application. The Tribunal has obtained information from the Fujian Provincial Government website indicating that Mr Liu has been held responsible as the legal representative of the Dongsheng Construction and Engineering company for issuing fraudulent documents in relation to manager's qualifications. The Tribunal considers that the evidence in relation to the Department's inquiries and evidence indicating that false documents have been issued either by Mr Liu [or] a person associated with the company, indicates that the applicant's claimed employment as the Deputy General Manager of the Dongsheng Construction and Engineering Company is false. Additionally, the Tribunal considers it to be highly implausible that the applicant could have progressed to the senior level of Deputy General Manager of a reasonably large construction and engineering company at the age of 22 or 23, in circumstances where he had commenced employment at the company as a labourer, after leaving school in Year 9 and without ever obtaining any qualifications in engineering or construction. The applicant has claimed that he "carefully checked" the list and the name Liu Ming Jian does not appear on the list and only the name "Liu Ming Wen" appears on the list. The Tribunal notes that while it mistakenly referred to "Liu Ming Jiang" in its post hearing letter, a copy of the document "Falsification of Manager's qualifications" was provided to the applicant and he has stated in his response that the name of the General Manager is Liu Ming Jian, not Liu Ming Jiang. The Tribunal accepts that the name of the General Manager was Liu Ming Jian. However, the Tribunal does not accept the applicant's claim that the name Liu Ming Jian does not appear on the document provided to him by the Tribunal. As explained at length to the applicant at the second hearing and in the post hearing letter, the document referring to the falsification of manager's qualifications was found by a fluent Chinese speaking staff member who searched on the Internet for the Chinese characters of Mr Liu Ming Jian's name. The applicant confirmed the Chinese characters of Mr Liu Ming Jian's name at the Tribunal hearing. Thus, the Tribunal is satisfied that the applicant verified the Chinese characters for Mr Liu Ming Jian's name. The Tribunal accepts that the Chinese characters for the name of Liu Ming Wen also appear on the document, but considers that even a cursory check of the document would reveal that the Chinese characters for the name Liu Ming Jin are clearly listed on the document. The Tribunal considers that the applicant's denial that the name Mr Liu Ming Jian appears on the document is indicative of his attempts to mislead the Tribunal. The Tribunal had a number of other concerns about the credibility of the appellant's other evidence but it is not necessary to set out the details. The first ground was apprehended bias, which included a claim that his evidence had been misstated by the Tribunal. The Federal Magistrate rejected this ground. His reasons included the following observations:- However, I have not been able to identify any relevant misstatement of the evidence by the Tribunal which would undermine its reasoning in relation to this element in the applicant's claims. It appears to me to have been open to the Tribunal to have arrived at its conclusions on the evidence, and it gave several rational reasons for having done so. I accept that the conclusion arrived at by the Tribunal was based upon evidence and reasoning which was not necessarily compelling, but the Tribunal shows that it has carefully weighed the evidence in the context of the applicant's general credibility which it has assessed in the course of its hearing. I consider the conclusions which are attacked in this ground were open to the Tribunal on the evidence before it, and do not reveal any jurisdictional error. The second ground was that the Tribunal contravened s 424A(1). This was based upon the error in the s 424A letter which referred to Mr Liu's middle name as "Jiang" rather than "Jian". The learned Federal Magistrate observed at [27] that the appellant's response to that part of the s 424A letter made clear that he had not been misled as to the person to whom the Tribunal was referring. The Federal Magistrate also said:- Moreover, in relation to the list of persons found responsible for falsifying manager's qualifications, the applicant was provided with " the Chinese version of this document ", and it is not suggested that it contained any error in the Chinese characters for Mr MJL's name appearing in that list. It is apparent from the applicant's response that the Chinese list was closely examined by the applicant and his agent. The applicant claimed that the list had been carefully checked to find the correct name for Mr MJL in Chinese characters, and that it was not there. It is clear from this response that the applicant and his agent understood what was being put to the applicant. The information which the Tribunal ultimately relied upon was the contents of the Chinese document which had been given to the applicant, and to which he had responded without any misapprehension as to what was being put to him. The English spelling of the name, whether correct or incorrect, was not the information which the Tribunal ultimately relied upon in its reasons in the paragraph which I have set out above. [Emphasis in original] The Federal Magistrate went on to say:- In my opinion, the Tribunal's conclusion that there had been an attempt in the response to its s.424A letter to mislead the Tribunal as to the contents of the Chinese list of names was a finding which was open to it, and which was an unsurprising conclusion in the circumstances. I do not consider that the Tribunal's assessment of the misleading response was itself a matter which should have been put to the applicant, nor that it gave rise to any obligations to warn the applicant that it might find that there had been an attempt to mislead it as to the contents of the Chinese list. In my opinion, the situation illustrates the point made in SZBYR & Anor v Minister for Immigration & Citizenship (2007) 235 ALR 639 at [20]. In SZKLG v Minister for Immigration and Citizenship [2007] FCAFC 198 ; (2007) 164 FCR 578 at [33] , a Full Court drew attention to the word "considers" in s 424A(1). Their Honours said that the effect of this is that s 424A(1) is only enlivened where the Tribunal forms the opinion that particular information would be the reason or part of the reason for affirming the decision under review. In MZXQB v Minister for Immigration and Citizenship [2008] FCA 319 ; (2008) 166 FCR 483 at [27] , Heerey J described the test as one of "dispositive relevance". In SZMNP v Minister for Immigration and Citizenship [2009] FCA 596 at [52] - [53] , I expressed the view that the effect of the authorities is that the word "considers" in s 424A(1)(a) is directed at the subjective consideration of the Tribunal on the facts of each case; it is for the court to determine objectively whether the Tribunal considered the information to be dispositively relevant; see also Applicant VEAL of 2002 v Minister for Immigration and Multicultural Affairs and Another [2005] HCA 72 ; (2005) 225 CLR 88 at [12] . Applying that test to the present case, it is clear enough that the Tribunal considered the dispositively relevant information to be that Mr Liu had signed the appellant's employment certificate and that Mr Liu had been held to be legally responsible for falsifying other employment certificates. This is to be found in the extract from the transcript of the Tribunal hearing set out at [20] above. It may also be gleaned from the statement in the s 424A letter that the information was relevant because it may lead the Tribunal to conclude that the appellant's claims to have been employed as Deputy General Manager were false and that Mr Liu had provided false documents on the appellant's behalf. However, it also clear that the information which the Tribunal considered to be dispositively relevant did not include the information which it received from the Chinese speaking Tribunal member, namely that "it is not clear whether Mr Liu was implicated in the falsification". In my view, it follows from the authorities to which I have referred that the Tribunal was not obliged to include particulars of that aspect of the information to the appellant. The appeal therefore turns on whether s 422B(3) ought to be construed as requiring s 424A to be interpreted as imposing an obligation on the Tribunal to provide the appellant with the full text of the email, including the doubts about Mr Liu's involvement. The effect of that decision is to dispose of the present appeal adversely to the appellant. This is because the Full Court held at [16]-[18] that s 422B(3) did not qualify the express statement in s 422B(1) that Div 4 contains an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with. As the Full Court said in SZMOK , at [16], s 422B(3) is not a free standing obligation; it draws content from the other provisions of Div 4. It therefore cannot require s 424A to be interpreted as imposing an obligation not found to exist on the proper construction of that section. Here, there is nothing in s 424A which would have required the Tribunal to provide the full text of the email that was supplied to it by the Chinese speaking staff member to the appellant. In any event, the information in the email that it was not clear whether Mr Liu was implicated, was not "adverse" information within the test stated by Brennan J in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 628-629. The information in the present case was quite different from that which was considered by the High Court in VEAL. In that case, an informant's letter was adverse to the applicant and contained information that was "credible, relevant and significant". Here, the equivocation about Mr Liu's involvement was not of that character. The information that was adverse was that Mr Liu had been held legally responsible for supply false certificates. The appellant was given full opportunity to deal with this. Moreover, this is a case where the entitlement of the appellant to complain of a possible denial of procedural fairness would depend upon whether there was evidence that he was misled: cf Applicant NAFF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 62 ; (2004) 221 CLR 1 at [34] . It seems to me that the finding of the Federal Magistrate, set out at [44] above, that the appellant responded to the Tribunal without any misapprehension, forecloses the possibility of any valid complaint. Indeed, this is reinforced by the Federal Magistrate's observations, referred to at [45] above, about the appellant's attempts to mislead the Tribunal. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application for review of decision of refugee review tribunal whether tribunal erred in failing to provide appellant with particulars of information relating to a document provided to the appellant in a s 424a letter court must determine objectively what the tribunal considered was the reason or part of the reason for affirming the decision under review s 424a of the migration act 1958 (cth) cannot be interpreted as imposing an obligation not found to exist on the proper construction of that section appeal dismissed. migration |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Citizenship (as he is now known) (the first respondent) to refuse to grant a Protection (Class XA) visa to the appellant. 2 The appellant is a citizen of India who was born on 15 February 1954. He arrived in Australia on 3 July 2001. On 10 August 2001 the appellant lodged an application for a protection visa. On 28 June 2002 a delegate of the first respondent refused that application. On 26 July 2002 the appellant applied to the Tribunal for a review of that decision. 3 The Tribunal (differently constituted) affirmed the delegate's decision on 7 July 2003 (handed down on 5 August 2003). On 25 May 2005, upon review by the Federal Magistrates Court, the decision was quashed and the matter remitted to the Tribunal for reconsideration according to law. 4 The second Tribunal also affirmed the delegate's decision on 18 November 2005 (handed down on 8 December 2005) but, on 28 November 2006, that decision of the Tribunal was also set aside by an order of the Federal Magistrates Court and remitted to the Tribunal for reconsideration. It is the decision of the third Tribunal that was the subject of the application to the Federal Magistrates Court for judicial review and the subject of this appeal. He was, whilst he lived in India, a self-employed farmer in his home village of Jhingran in the Jalandhar district in Punjab. He is married with two children, though his wife and children remain in Punjab in India. The appellant entered Australia in July 2001. They abused and assaulted him and his family, and demanded he return the farm to the Hindus. The appellant also claimed that his neighbour was a Hindu who had the police and authorities visit daily. The appellant stated that the police said they would not act on his complaints because he and his family were "Sikh terrorists". He said that the police demanded money from him and his family and physically mistreated him when he refused to pay them. The appellant claimed that in September 1999 people from the SS and BJD came to his door and, following an argument, after the appellant shut the door, they fired shots into his house. He claimed that, after again complaining to the police, rather than any investigations being undertaken, he was detained and beaten instead. He was apparently told "you are a Sikh terrorist and you have no right to be here. The Tribunal had before it a letter alleged to be from the Consular-General of India in Sydney dated 8 September 2005. 9 On 21 February 2007 the Tribunal sent a letter to the Indian Consulate, without identifying the appellant, seeking verification of that letter which referred to the appellant's "refugee status". On 22 February 2007 the Tribunal received a reply from the Consulate advising that the letter was "fake with forged signatures and forged letter head". On 22 February 2007 the Tribunal sent a letter to the appellant pursuant to s 424A of the Migration Act 1958 (Cth) (the Act) inviting comment on the forged letter and noted that the information was relevant because "it may raise doubts about [the appellant's] credibility and veracity of [his] claims. " In a fax dated 14 March 2007 (received by the Tribunal on 19 March 2007) the appellant "vehemently" denied he was involved in writing the letter or, indeed, sending it to the Tribunal. 11 The Tribunal found the appellant was not a credible witness based on the oral evidence he gave to the third Tribunal at hearing. The Tribunal found that the appellant had fabricated aspects of his claims to enhance his application for a protection visa. It found his evidence was inconsistent, evasive and vague; that it lacked dates and other important details; that his detention claims were implausible and unconvincing; and that the appellant's delay between the main incident of harm in 1999 and his departure from India in 2001 raised doubts about his claims. The Tribunal further noted that in his initial application for review in 2002 the appellant stated he would provide the Tribunal with "more comprehensive documents to support my claims", however, five years later, no such documents had been provided to the Tribunal. For those reasons, the Tribunal did not accept that the appellant suffered any of the claimed harm. 12 Although the Tribunal accepted as plausible the appellant had a Hindu neighbour with whom he had a dispute over land, it rejected the claim that the appellant's Sikh religion was the significant and essential reason for the conflict and instead found that the source of the conflict was longstanding animosity between the appellant and the Hindu neighbour. 13 The Tribunal considered whether the appellant belonged to a particular social group of 'Sikh landowners' and found that, even if such a group were to exist, the reason for the appellant's feared harm was not essentially or significantly related to membership of that social group but rather was private in nature. 14 The Tribunal noted that harm feared by an appellant "must have an official quality" or that the government has failed to adequately protect an appellant from persecution. In this case, the Tribunal was satisfied that independent country information supported a finding that there was no real chance of the appellant being persecuted because of his Sikh religion, particularly because Sikhs were a majority in Punjab. The Tribunal also found that the appellant would be provided with State protection for any private harm that he feared. 15 The Tribunal was therefore not satisfied that the appellant had a well-founded fear of persecution and affirmed the decision not to grant the appellant a protection visa. The Tribunal committed a jurisdictional error by misapprehending the applicants claim and failing to conduct a review the delegate's decision in accordance with the particular social group that the applicant claims to be a member of / failing to address all integers of the claim. 2. The Tribunal committed a jurisdictional error of law by failing to conduct a review of the delegate's decision in accordance with the Act and law of evidence in relation to the finding of international standards of State protection at page 13 of the Tribunal's decision. Further of alternatively, in reaching its ultimate conclusion the Tribunal failed to have regard to relevant, correct and up to date information. 3. Alternatively, the Tribunal committed a jurisdictional error of law by failing to take into account relevant consideration in its finding "that the applicant would be able to obtain State protection that would accord with international standards, for any private harm that he fears. " The Tribunal failed to relevantly consider whether State protection would be available for the appellant. 17 The Federal Magistrate summarised the appellant's first ground as referring to a misapprehension by the Tribunal of the claims of the appellant that he was only a Sikh landowner, when he was actually claiming to be part of a more specific social group, namely a Punjabi Sikh Jatt landowner, and that the latter social group was not considered by the Tribunal. Therefore, it was argued that the Tribunal did not properly assess the risk of persecution against that group. His Honour noted that in the appellant's response to the s 424A letter the appellant said he was persecuted for being a Punjabi Sikh Jatt Landowner. One could ask rhetorically perhaps, what essentially is the difference between being persecuted as a member of the social group of Sikh landowners and being a member of the social group of Punjabi Sikh Jatt landowners? Clearly, the question of being a Sikh and being a landowner was considered by the Tribunal. Indeed, the Tribunal considered the Applicant's situation as a Sikh in Punjab State where the Applicant comes from. The Tribunal considered Independent evidence or Independent country evidence of the proportion of the Sikh population in Punjab as being 59.9%. I am of a view that when the Tribunal considered the question of the Applicant being a Sikh and a landowner, the Tribunal did consider the question of the Applicant being a Sikh in Punjab State because the Tribunal specifically addressed that at page 151 of the Court Book. The Tribunal did not consider the Applicant as being a Sikh in the context of India generally, that is, a Sikh in the context of being a Sikh from the Punjab State. What, if any, is the relevance of the Applicant claiming to be a Jatt? In my view, there is no significance. The Applicant did not make that particular claim or provide any evidence that as a Jatt he was in a somehow difficult position from other Sikh landowners in the Punjab State. It is no more than a particular description. There is no evidence of any Convention-related harm being directed to the Applicant for that particular purpose. I am not of the view that there is any requirement set out by the High Court in Minister for Immigration & Multicultural Affairs v Respondents 152/2003 , to which I have previously referred, that the Tribunal should conduct some sort of an inquiry or an assessment or an evaluation as to what international standards of State protection are. If the Applicant submits that State protection is either unavailable or inadequate, it is for the Applicant to provide evidence in respect of that point. The first and second grounds challenge the Federal Magistrate's conclusions on the Tribunal's findings in relation to international standards of State protection, asserting that the Tribunal did not comply with the Act or the rules of evidence on this issue, nor did it have regard to relevant or sufficient evidence relating to this issue. The third ground contends the Tribunal made a jurisdictional error where it found the appellant had fabricated aspects of his claims. However, he handed up comprehensive written submissions at the hearing. In those submissions he addressed all three grounds of appeal and raised a further ground. That amendment fairly raised an issue which was before the Federal Magistrate. Leave was granted to amend the notice of appeal. 23 For the reasons which follow, I do not think any of the original three grounds of appeal have been made out. However, I am satisfied that the fourth ground has been established. 25 The first respondent further submitted that the Federal Magistrate was entitled to rely upon the decision of Minister for Immigration and Multicultural Affairs v Respondents S152/2003 [2004] HCA 18 ; (2004) 222 CLR 1 for the proposition that the Tribunal is not required to examine evidence about international standards of State protection. 26 The first respondent submitted that, in any event, it was unnecessary for the Tribunal to consider the issue of State protection at all, because the Tribunal had already found that there was no real chance of the appellant being harmed in the future. In those circumstances, the issue of State protection did not arise: Respondents S152/2003 222 CLR 1 per McHugh J at [84]-[88]; SVTB v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 104 at [22] - [23] . 27 The first respondent submitted that the assertion raised by the appellant in the third ground of appeal that the Tribunal committed jurisdictional error by stating that the appellant had "fabricated aspects of his claim to enhance his application" was raised for the first time on the appeal. Nevertheless, the first respondent submitted that the authorities mentioned in the particulars by the appellant (being Rares J's decisions of SZGGT v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 435 at [60] - [64] and SZEOP v Minister for Immigration and Citizenship [2007] FCA 807 at [24] ) were irrelevant to this case. The first respondent further submitted that it was open to the Tribunal, for the reasons it gave, to find that the applicant had fabricated aspects of his claim to enhance his application for a protection visa. Moreover, the Tribunal found that the appellant had not suffered any of the harm which he claimed to have suffered as a result of his dispute with his Hindu neighbour. Whilst the Tribunal was prepared to accept that there was a long-standing animosity between the appellant and his neighbour, the Tribunal rejected the appellant's claim that the appellant feared that he would be persecuted for any Convention reason. The Tribunal also rejected the appellant's claim that he was a member of a particular social group which meant that he was liable to persecution. 29 In those circumstances, the first respondent's submission that the issue of State protection did not arise must be accepted. The Tribunal rejected the appellant's claim that he had a well-founded fear of persecution for a Convention reason. In those circumstances, the question as to whether the State could or could not protect him in relation to that fear of persecution did not arise. 30 For that reason, the first two grounds of appeal must be dismissed. 31 The third ground of appeal was not raised before the Federal Magistrate as a ground for the application for judicial review. It can only be raised by leave. Leave would only be given if this Court were satisfied that there was any merit in the ground of appeal. 32 In my opinion, there is no merit in the ground of appeal. 33 The Tribunal concluded that the appellant had fabricated aspects of his claim because it could not accept him as a credible witness. The finding of fabrication is the Tribunal's explanation for why the appellant might have advanced the claims that he did. It is not jurisdictional error to make such a finding as is claimed in this ground of appeal. The Tribunal was entitled to conclude, for the reasons it gave, that the appellant had fabricated his evidence for the purpose of supporting his claim for a protection visa. 34 It is not claimed in this ground of appeal that the Tribunal was under an obligation to give notice of any matter pursuant to s 424A of the Act. Rares J's decisions in SZGGT [2006] FCA 435 and SZEOP [2007] FCA 807 were concerned with the question of notice under s 424A. The third ground of appeal is not made out. 35 However, I do think, as I have said, that the fourth ground has been made out. The Tribunal addressed the appellant's claim that he was a member of a particular social group. In fact, the appellant had precisely identified the social group of which he claimed he was a member. He said in a letter to the Tribunal of 14 February 2007, "I state that I was persecuted in India by Indian authorities (police) and others for being a Punjabi Sikh Jat landowner. 39 The Tribunal's error was recognised by the Federal Magistrate. However, the Federal Magistrate said that the Tribunal considered the appellant's claim against a wider social group, being a group of Sikh land owners and found that that wider social group was not subject to persecution. The Federal Magistrate therefore reasoned that the Tribunal assessed the appellant's claim. The Federal Magistrate reasoned that as the appellant lived in Punjab the Tribunal had inferentially addressed that aspect of his claim. The Federal Magistrate also thought that as there was no evidence of the relevance of the appellant being a Jatt, that the appellant was therefore in no different position from other Sikh land owners in the Punjab state. 40 In my respectful opinion, the Federal Magistrate erred in concluding that as the Tribunal had assessed the appellant's claim against a wider social group that the Tribunal must have thereby assessed the narrower claim. That, in my opinion, does not necessarily follow. The appellant claimed refugee status by reason of being a member of a particular social group. He was entitled to have his application assessed as against that claim, not as against some other claim. 41 If the Tribunal had assessed his claim as it was precisely presented to the Tribunal, the Tribunal would have had to determine whether a Punjabi Sikh Jatt land owner was liable to persecution by reason of his membership of that particular group. 42 This was not done. In that regard, the Tribunal failed to exercise its jurisdiction in relation to the appellant's claim. 43 It was put by the first respondent that because of the finding made in relation to the ability of the State to protect its citizens that even if there was a well-founded fear of persecution by reason of the appellant being a member of the particular social group of Punjabi Sikh Jatt land owners, the appellant's claim had to be dismissed. In my opinion, that contention should also be rejected. The issue of State protection was not assessed against the particular social group of which the appellant claimed to be a member. It was assessed against a wider group. 44 It will be a matter for the Tribunal to determine whether or not the smaller and more precisely identified social group receives adequate State protection from the Indian authorities. 45 In my opinion, the appeal should be allowed. The order of the Federal Magistrate dismissing the application for judicial review should be set aside. The order that the appellant pay the first respondent's costs in the Federal Magistrate's Court should also be set aside. In lieu thereof, there should be an order quashing the decision of the Refugee Review Tribunal made on 21 March 2007 and handed down on 12 April 2007. There should also be an order that the appellant's application for a review of the delegate's decision be remitted to the Refugee Review Tribunal for consideration according to law. 46 The appellant, in his written submissions, has asked that the appeal be allowed with costs being awarded. He was unrepresented on this appeal but was represented before the Federal Magistrate. 47 It seems to me it would be appropriate to make a further order that the first respondent pay the appellant's costs in the Federal Magistrates Court. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | where tribunal considered particular social group of "sikh landowners" where appellant had precisely identified the social group of which he claimed he was a member as being "punjabi sikh jatt land owner" whether in assessing appellant's claim against the wider social group the tribunal assessed the narrower claim whether the issue of state protection was considered in relation to the particular social group of which the appellant claimed to be a member appeal allowed. migration |
6 On 8 November 2005, the first and second respondents filed a Notice of Motion, seeking, inter alia, that the applicant's Application and Statement of Claim be struck out, as being statute barred. The respondents also seek to have the claims for declarations struck out, on the basis, that there is no utility in making such declarations. That time for issuing of these proceedings be extended, if required by law, until the date of issue of the application and statement of claim by the applicant dated 2 October 2005. That leave be granted to further amend pleadings, after examination of the first and second respondents in relation to the description of persons concerned with the printing production and publication of the newspaper know as the [C]atalyst. He applies to the Court for damages for defamation pursuant to the Defamation Act 1889 (Qld), for breach of s52(1) of the Trade Practices Act 1974 (Cth), a compensation order pursuant to s1317H of the Corporations Act 2001 (Cth), for breach of the civil penalty provisions s232(2) , (4) and (6) pursuant to the Corporations Law 1999, for conspiracy to injure at common law, together with various ancillary declarations and orders. So to conspire would constitute an offences under s29D of the Crimes Act 1914 pursuant to s11.5 of the Criminal Code 1995 (Cth), s543(1)(b)(d)(f) of the Criminal Code Act 1899 (Qld), (Cth); for which, if convicted the said respondents' would be liable to be imprisoned. 10 The Statement of Claim continues that between the same dates, and at the same places, the same parties did proceed to implement those arrangements or understandings by writing, printing and causing to be published a document titled 'The Catalyst' Volume 1 Issue 1. The Statement of Claim refers to a story on the front page of that publication, which had the headline 'Sharples Money Trail Leads to Senior Liberal' . 11 The story asserted that there was an agreement by Tony Abbott, a Minister in the Federal Government, to fund an action which the applicant took in the Supreme Court of Queensland, relating to the validity of the registration of One Nation as a political party in Queensland, and further asserted that the applicant wrote to Mr Abbott, which letter, amongst other things, said 'Attached is a list of moneys I have expended on the cause and your personal cheque by return mail is requested in satisfaction thereof. They have a lot to lose. He 'has suffered economic loss ' alleging a minimum of $700,000 and 'special damages ' alleging a minimum of $70,000. 14 It is necessary to consider the jurisdiction of this Court in a claim for defamation, brought under the Defamation Act 1889 (Qld). The question is whether the claim in defamation is 'associated' with the federal claims. ... The concept of "matter" as a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy, was accepted by a majority of the court in [Philip Morris v Brown [1981] HCA 7 ; (1981) 148 CLR 457] Barwick CJ said (at 474): "It is settled doctrine in Australia that when a court which can exercise federal jurisdiction has its jurisdiction attracted in relation to a matter, that jurisdiction extends to the resolution of the whole matter. This accrued federal jurisdiction is not limited to matters incidental to that aspect of the matter which has, in the first place, attracted federal jurisdiction. It extends, in my opinion, to the resolution of the whole matter between the parties. This accrued jurisdiction carries with it the authority to make such remedial orders as are necessary or convenient for or in consequence of that resolution. For this purpose, the court exercising federal jurisdiction may enforce rights which derive from a non-federal source. This exercise of this jurisdiction, which for want of a better term I shall call 'accrued' jurisdiction, is discretionary and not mandatory, though it will be obligatory to exercise the federal jurisdiction which has been attracted in relation to the matter. A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect. In my judgment, the constitutional 'matter' of the applicant's claim is the alleged agreement or conspiracy to publish the article in ' The Catalyst' which is set out in the Statement of Claim. This matter is not, in my view, one of which it can clearly be said to involve no federal aspect. I will therefore consider whether it is just to extend time to bring proceedings, notwithstanding the periods of limitation have expired. When asked by the Court, ' Are [the declarations sought] not simply dependent on your making good your claims in respect of defamation and other breaches of the trade practices and corporations laws? ', the applicant stated ' They don't stand apart from it, except perhaps the order for declaration, but I suppose that's tied to the defamation action in any case' . I was legally advised [in early March 2002] that the evidence of Mr. Ettridge was insufficient to found a claim for damages for defamation . Material which is defamatory does not fall outside the operation of sub-s 52(1) of the Act merely for that reasons any more than it is brought within the operation of sub-s 52(1) by reason only that it is defamatory. If the operation of sub-s 52(1) was limited to exclude material because it was defamatory, not only newspaper publishers, but all corporations would be exonerated. The fact that the material is defamatory does not for that reason fall outside the operation of s 52, nor is it brought within the operation of s 52 because it is defamatory. It was further submitted that the claims for breaches of the Trade Practices Act and Corporations Act are also out of time. 26 In the case of the tort of defamation, time starts to run at the date of publication. The impugned conduct there is said to have occurred between 19 August 1999 and 30 September 1999. 28 Atkinson J gave Reasons for Judgment, in proceedings in the Supreme Court of Queensland on August 18, 1999, the effect of which led to the deregistration of Pauline Hansons' One Nation as a political party, pursuant to the Electoral Act 1992 (Qld). 29 O 13 of the Federal Court Rules provides the Court with power extend the time within which to bring a proceeding, notwithstanding it is statute barred. 34 The issue for the Court is whether the applicant should be permitted to rely on his new and extended allegation, yet to be pleaded, that, between 19 August and 30 November 1999, certain things happened. The applicant has provided no evidence explaining why this change in the period was introduced into the Statement of Claim. 35 On 14 November 2005 the Court gave the applicant leave to amend the Statement of Claim. Leave is granted to the applicant to amend the principal proceedings to remove "Gympie Times Pty Ltd ACN 009 656 928" as fifth respondent in those proceedings. Leave is granted to the applicant to amend the name of the fourth respondent in the principal proceedings to read "Ross Bensted" rather than "Ross Binstead". The foreshadowed amended statement of claim is to be filed and served by Friday 18 November 2005. It should be served by post on the third and fourth respondents forthwith and served in the usual way on the first and second respondents forthwith. If there is any additional material on which the respondents seek to rely in addition to the pleading, or the motion, or the material Mr Sharples has filed, that material should be filed and served by Friday 18 November and posted by ordinary pre-paid post to Mr Sharples at 45 Charles Street, Tweed Heads, on that day. Any material on which the applicant wishes to rely in support of the foreshadowed amended notice of motion or in response to the first and second respondent's notice of motion should be filed by 25 November and posted by that day to the solicitors for the first and second respondents and the third and fourth respondents. Any material in response to the applicant's material in support of his motion for an extension of time should be filed and served by 4 pm on Friday 2 December. An Amended Statement of Claim was filed by the applicant on 5 December 2005. This document goes well beyond what the applicant had 'foreshadowed'. 37 The Amended Statement of Claim has changed the pleading of the date of publication, from 'between 19 August and 30 September 1999', to 'between 19 August 1999 and 30 November 1999'. The effect of this change is to plead a cause action for which the limitation period has expired. Secondly, in his Amended Statement of Claim, the applicant has added a respondent, being Catalyst Newspapers Proprietary Limited. 38 There was nothing in the grant of leave that gave the applicant the ability to add a party or to amend the substance of the claim, as the applicant has done. In particular, it is not competent, without leave, to amend a pleading if the effect of the amendment was to plead a cause of action in respect of which the relevant period of limitation had expired. 39 Because Mr Sharples is acting for himself, I think the better course is to consider his notice of motion to be an application for an extension of time in which to bring his proposed causes of action; the relevant periods of limitation having expired. 40 In an affidavit filed 11 November 2005, the applicant provides various reasons for his failure to lodge his claim within time. He says that although he became aware of the publication in late 2001, he received legal advice in March 2002 that he had insufficient evidence to found a claim in damages. He further asserts that, despite his best endeavours, he could not receive a copy of the article to enable him to pursue his action until searching the Queensland State Archives in September 2005. He contends the newspaper was not available by normal means, being posted out to supporters and members of the party. I verily believe no prejudice will be occasioned by the respondents by an order extending time, should such an order, as a matter of law, be required to found these proceedings. I verily believe there is an addition to my own interests in this litigation a public interest in bring to account people who wrongfully misuse and abuse the constitutional freedom of speech in this country, for personal advantage. Only at this time, the applicant claims, did he have sufficient evidence to institute legal proceedings against the various respondents. However, the applicant seeks to show a republication of the article. He points to an affidavit of Mr Ettridge, who swears that ' sometime' in December 1999, he received a copy of the Catalyst newspaper by post. Of course, this is after 30 November 1999, the end point of the period for which he contends in the Amended Statement of Claim filed 5 December 2005. 43 The applicant contends that publication occurs ' not just when the newspaper is printed. It's when it is --- when people read it. Every time people read something like that, it's re-published. And that's the time-frame that should be applied here'. He further stated ' the person is defamed every time someone reads it'. This is the date that the applicant contends the limitation period should commence; this is the date the applicant seeks to have as the ' publication point '. 45 The applicant contends that his ignorance of the publication should be no bar against his claim; that he did not have any reasonable way of knowing about the alleged defamation until it was told to him verbally, and he could thus make proper inquiry and obtain a copy of the newspaper. 46 The applicant's reasoning poses problems. If the applicant's contentions are correct, and it is 'just' to extend time to bring an action to the time a party learns that he has suffered damage, then there would effectively be no limitation period in respect of defamation. Unfortunately for the applicant (except for exceptions of fraudulent concealment and the like), limitation periods do not start to run from the period a person learns they have suffered damage. 47 In the original Statement of Claim the conduct on which of the respondents on which he complains is said to have taken place between 19 August 1999 and 30 September 1999. The applicant's proceedings were not commenced until 3 October 2005, which is after the affluxion of the period of limitation of six years. Even with the changes introduced by the Amended Statement of Claim filed on 5 December 2005, which extended the period so that the relevant period was 19 August 1999 to 30 November 1999, the causes were then out of time. 48 The right to bring actions under the Trade Practices Act 1974 (Cth) at the time was within the period of three years. The period of limitation by subsequent amendments to the Trade Practices Act has now been extended to six years, but those amendments were not retrospective. The applicant on any view of the relevant time period is out of time and statute barred in respect to breaches of the Trade Practices Act 1974 (Cth). 49 In respect of claims based on the Corporations Law 1999 (Cth) or compensation pursuant to the Corporations Act 2001 (Cth), the relevant limitation periods again were no more than three years. 50 Viewing the matter more generally, the present application by the applicant, is one made in early 2006, for an extension of time to bring proceedings in respect of conduct that occurred at the latest by the end of December 1999. Nothing in the material before the Court provides a basis for concluding that it would be just for the period within which to bring proceedings to be extended this time. 51 The claims for damages, with their various statutory foundations are statute barred and those claims should be struck out: see Kim v Minister for Immigration, Local Government and Ethnic Affairs and the Commonwealth of Australia (1989) FCA 770 . It is intended to state the rights of the parties with respect to a particular matter with precision, and in a binding way. The remedy of a declaration is not an appropriate way of recording in a summary form, conclusions reached by the Court in reasons for judgment. This is even more strongly the case when the conclusion is not one from which any right or liability necessarily flows. 55 For the above reasons the Notice of Motion by the applicant seeking that the 'Time for issuing of these proceedings be extended if required by law until........ 2 October 2005' be dismissed and that the relief claimed in par [2] of the applicant's Notice of Motion filed 11 November 2005, namely, 'That leave be granted for further amended pleadings after the examination of the First and Second Respondents in relation to the description of persons concerned with the printing, production and publication of the newspaper known as the catalyst' be refused. 56 On the Notice of Motion by the First and Second Respondents, the Court orders that the applicant's application and statement of claim be struck out, as statute barred. 57 The applicant in the principal proceedings should pay the costs of the first and second respondents of the two Notices of Motion, to be taxed if not agreed. | associated jurisdiction of the federal court whether claim in defamation associated with claims in the federal court falls with the court's associated jurisdiction statute barred proceedings application to amend pleadings failure of applicant to lodge claim in time whether just to grant an extension to institute proceedings whether utility in making declarations jurisdiction defamation declarations |
2 The patent application in suit is entitled "Operation of Gaming Machines in a Linked Bonus Prize Winning Mode". The patent application relates to a method and a system for awarding a bonus prize in the playing of a number of gaming machines (variously called poker machines, slot machines or fruit machines) all linked to a central computer or processor. 3 The opposition of Aristocrat before the delegate was based on the assertions that the claims in the patent application were not novel, that the claimed invention was obvious and that the claimed invention did not reveal a new manner of manufacture. 4 There was no appeal by the patent applicants, IGT (Australia) Pty Limited and Acres Gaming Inc (the respondents to the appeal in the Court, to whom I will refer in the singular for convenience as "IGT") in relation to the decision that two of the claims were anticipated. Thus, it is unnecessary to analyse in any detail the reasoning of the delegate based on such evidence as was before him. Nevertheless, it may be appropriate for the Court to accord respect and a degree of weight to the views of the delegate informed as they were by his experience and technical skill: Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5 ; (1999) 199 CLR 135 at 154-55 [45] - [47] ; Eclipse Sleep Products Inc v Registrar of Trade Marks [1957] HCA 86 ; (1957) 99 CLR 300 at 321-22; and E I Du Pont de Nemours and Company v ICI Chemicals and Polymers Ltd (2006) 66 IPR 462 at 469 [14]. The circumstances that would affect the weight to be given to the views of the delegate include the differences or similarities between the material placed before the delegate and the evidence led before the Court. There was such a difference here. I will return to this issue in due course. It is also necessary to recognise the nature of the judicial task thus described. In the present case, however, the respondent has conceded that no issue estoppel would apply to the findings of fact of Heerey J in any revocation proceeding instituted by the applicant in respect of the patent. In any event, the difference between the issue determined by his Honour in the pre-grant opposition proceeding, and the issue that would arise for determination in any revocation proceeding instituted by the applicant, is in our view sufficient to preclude the operation of issue estoppel principles in that second proceeding. The overriding issue in the pre-grant opposition proceeding before Heerey J was whether it was practically certain that the patent to be granted on the specification would have been invalid on the ground that the content of the specification was not in accordance with the requirements of s 40 of the Patents Act 1952 (Cth) ( Genetics Institute Inc v Kirin-Amgen Inc (No 3) (1998) 156 ALR 30 at 39-41). Even if revocation of the patent was subsequently sought by the applicant on the virtually identical ground of non-compliance with subs 40(2) or subs 40(3) of the current Act (see par 138(3)(f) of the Act), the issue for determination by the judge hearing that revocation application would be whether the patent should be revoked for the specification's non-compliance with subs 40(2) or subs 40(3). The decision of Heerey J that it was not practically certain that the patent should be so revoked would be inconclusive of this issue. Accordingly, there would be no scope for the operation of an issue estoppel in relation to the decision of Heerey J in any post-grant revocation proceeding instituted by the applicant in respect of the current patent. This purpose is reflected in the explanation by the Minister for Science for the Federal Government's policy decision to retain pre-grant opposition proceedings in Australia, despite the recommendation of the 1984 Industrial Property Advisory Committee Report Patents, Innovation and Competition in Australia (IPAC Report) that they be abolished (recommendation 29). Opposition procedures will be made more stringent in order to expedite the determination of oppositions. " [(1986) 56 No 47 Official Journal of Patents, Trade Marks and Designs 1475. Thus, opposition should be confined to those grounds that have a fair potential to establish clearly that the prospective patent would be invalid. To permit an opponent, without some justification, to rely on new grounds of invalidity on an appeal from a decision of the Commissioner, or grounds abandoned below, may tend to be inconsistent with the object of opposition proceedings. I do not regard any of those authorities as decisive one way or the other. As I have said, however, I do draw some comfort from the cases to which I have just referred for my conclusion, based on the scheme of the legislation, that there is a significant distinction to be drawn between the nature of an opposition proceeding under s 60 (or under the 1990 Act for that matter), on the one hand, and proceedings for revocation on other. The former is, in a sense, in the nature of an interlocutory proceeding, although any analogy tends to be misleading. There are some suggestions in early High Court authorities, that an opposition proceeding is in the nature of a summary proceeding ... Either analogy might suggest that the question to be determined in an opposition proceeding is whether there is a serious question as to whether or not a patent, if granted, might be valid. If there is, then the application should proceed to grant. I consider that, before the Court would uphold an opposition to the grant of a patent, the Court should be clearly satisfied that the patent, if granted, would not be valid. That, however, is not to say that an opponent should not be permitted appropriate opportunity to lead evidence-in-chief as to the facts that are designed to demonstrate, with the requisite degree of clarity, that a patent, if granted, would not be valid. Where the subject matter of the patent is one of complexity, of necessity, the evidence that an opponent would be entitled to adduce would itself be of considerable complexity. 9 What lies behind this approach is the purpose of pre-grant opposition proceedings, as discussed by the Full Court in Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742 ; 92 FCR 106 at [19] , in the second emphasised passage cited above. 10 The parties were agreed that the amendments effected by the Patents Amendment Act 2001 (Cth) do not affect the approach of the Court in this respect in this case. 11 The cases referred to by Emmett J in F Hoffman --- La Roche AG v New England Biolabs Inc [2000] FCA 283 ; 99 FCR 56 and the decision of the Full Court in Genetics Institute Inc v Kirin-Angen Inc [1999] FCA 742 ; 92 FCR 106 lead to the conclusions that the issue for resolution by the Court is whether it can be concluded clearly or as a matter of practical certainty that the opposition is well made and that the patent, if granted, would be bad, and that the issue for resolution by the Court is not whether the matters grounding the opposition (here want of novelty and obviousness) have been made out in the manner required in revocation proceedings. 12 I am bound by Genetics Institute Inc v Kirin Angen Inc [1999] FCA 742 ; 92 FCR 106, and, by comity, would respectfully follow the views of Emmett J in F Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283 ; 99 FCR 56, Bennett J in Austal Ships 66 IPR 420 and Branson J in E I Dupont de Nemours v Imperial Chemical Industries 54 IPR 304 . Neither side submitted, formally or otherwise, that that approach was erroneous. Importantly, however, both sides agreed that expressing the matter in this way did not do away with the necessity of the Court coming to a final view about the proper construction and meaning of the patent application in suit and the earlier patent said to be an anticipation of it. Thus, to the extent that the outcome turns upon the meaning of either the applicant or the patent the constraining effect of the need for practical certainty is less apparent. 14 The application of the proper approach insofar as it affects the assessment of the asserted obviousness of the patent application and the assessment of the expert evidence as to the teaching or disclosure given by the documents in the light of the prior art for the purpose of the asserted lack of novelty is best dealt with in the context of discussing the evidence about those matters. 16 Each of the parties called one expert witness. Aristocrat called Mr Edward William Culley and IGT called Mr Keiran Daley. The experts met prior to the hearing and produced a joint report setting out the extent of their differences. Both gave some oral evidence in chief explaining their qualifications and experience and expressing through the spoken work their different views. They were both cross-examined. Neither was cross-examined on his credit. Each was experienced and intelligent, and sought, at all times, to assist me by being frank and clear. Each was willing to engage in dialogue both with the cross-examiner and with me. Each used language (both in writing and orally) with precision and care. I am grateful for the way that they approached their responsibilities. Aristocrat submitted that the claims properly construed were sufficiently wide to encompass a system or method exemplified by the Megabucks System and the Bennett Patent. If Aristocrat is correct in that regard, IGT conceded that, applying the relevant standard discussed above, the patent, if granted, would certainly be bad as anticipated by that earlier art and so would not be novel. 18 If Aristocrat is not correct in its construction of the patent application, Aristocrat submitted that the disclosures within, and that were taught by, the Megabucks System and the Bennett Patent were wide enough and clear enough to anticipate the patent application. 19 Finally, Aristocrat submitted that, even if the patent application could not be clearly said not to be novel, it could clearly be said to be obvious given the prior common general knowledge, which included the Megabucks System, but not, it was conceded, the Bennett Patent. 20 The priority date of the patent application is 7 May 1997. Most attention and debate was focussed on them at the hearing. The bonus prize wining mode is additional to wins occurring in play of the normal game(s) provided by each gaming machine. Such systems typically comprise a bank of gaming machines each having an interface providing communication with a central controlling computer or data processor. The controlling computer receives from each connected gaming machine an indication of each play (and possibly also the wager value). A bonus prize pool is formed and accumulates with each play of the gaming machines. This accumulating total most usually is prominently displayed on a visual display unit. The bonus pool is awarded when it reaches a (usually) randomly chosen value, being won by the player of the machine whose play caused the total to be reached. As such a bonus prize winning scheme encourages and promotes usage by the prospect of a windfall prize independent of won in normal play of the gaming machines. It is accordingly desired to develop improved methods of operating a prize wining mode to encourage greater machine usage, also to provide enhanced enjoyment for the players. The present invention seeks to achieve these objectives. The inventiveness and novelty is said by IGT to lie in the duality of phases and the use of two, what were called, count triggers to end each successive phase. 31 There was no disagreement about the expression of the principles of construction. The debate lay in the different application of them, in particular in the subtle question of the correct perspective from, or prism through, which to read the patent application. The construction of the claims takes place in the context of the specification as a whole, recognising the existence and role of the different parts thereof, the Court having placed itself in the position of someone acquainted with the state of the art: Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 67 IPR 230 at 236 [39]; Welch Perrin & Co Pty Ltd v Worrel [1960] HCA 91 ; (1961) 106 CLR 588 at 610; and Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8 ; (2001) 207 CLR 1 at 16 [24] . That said, two different people skilled in the art may take the meaning of the specification as a whole or the claims therein differently. That may reflect the perennial problem of the imprecision of language, meaning and perception or it may reflect different emphases taken from the prior art. Insofar as a view expressed by an expert depends upon a reading of the patent, it cannot carry the day unless the Court reads the patent in the same way. This can be seen in particular from the fact that the application is concerned with achieving enhanced enjoyment from the players of the games on gaming machines. Such a person will understand the prior art and the marketing of such games, including the motivation of players, and the aspects of the games and machines that excite or interest players. This knowledge and background takes place in the technical environment of computing. Thus, such a person will have some background in computing, or have available such background, in order to be able to appreciate what can be done to implement the game that is designed and the operation of the machine. 33 Aristocrat emphasised that it was the designing of a progressive linked system that was the focus of the patent. In a sense that is correct. Aristocrat put it that way, however, to stress the computer technology involved. This, as shall be seen, is particularly important in assessing the meaning of the word "count". I would prefer to put the matter in the way I have in the preceding paragraph. To do so reflects, I think, the expertise of both Mr Daley and Mr Culley and to do so recognises that the patent is not about computer technology itself, but about a system and method of awarding prizes using computer technology to instruct a person with a practical interest in designing games for modern computer based gaming machines. Both Mr Daley and Mr Culley had that practical interest, though they came from different backgrounds --- Mr Culley from a computing background, and Mr Daley from the perspective of designing games and the mathematics thereof. 35 The claim then requires a prize accumulation phase that is prior to, and independent from, the later prize awarding phase. This can be seen from the words "thereafter executing" (on line 12). 36 The prize accumulation phase sees a value accumulated from play signals up to a point at which the value equals a prize value. The player causing the prize accumulation phase to end is not the winner of the bonus prize. This is said to be their ordinary natural meaning, reflected by the ordinary usage of subsequent plays being separately counted. Further, the notion of counting can be seen as different from the "registering of a play signal" used earlier in the claim. 39 Aristocrat on the other hand submitted that the word "count" is not necessarily a process of numerical addition but refers to the counting process undertaken by the central computer. The counting function is the process of recognising a specific event on a base gaming machine being the event that the central computer has been programmed to recognise as entitling that gaming machine to the award of the bonus prize. This can be seen, it was said, from the phrase "separately counted for their occurrence". This meaning of count is apt to include the simple recognition of one event, such as a certain combination of symbols, as the occurrence which causes the prize to be awarded. A count, so Mr Culley said, may be a count of zero, being the "count" when no specified event is recognised or one, being the count from zero to one when a specified event is recognised. 40 An important aspect of the debate concerned how one saw the patent application in suit fitting into the existing common general knowledge. It was agreed between Mr Daley and Mr Culley that there were two types of triggers known to people in the relevant field (a trigger being an event which set off either an entitlement to a prize or a switch from one phase of a game to another). These triggers were: (a) a pattern or combination of symbols trigger and (b) a mystery quantum equalisation trigger. The mystery quantum equalisation trigger was also referred to at times as a count trigger. 41 Mr Daley saw these two types of triggers as quite distinct. In the first, a given line up of symbols on the machine was the winning combination of symbols. He saw this as occurring at the level of the machine --- when the player got three jacks, for instance, he or she became entitled to a prize. This was not counting or a mystery quantum equalisation or count trigger, but the recognition of a pattern or a combination. 42 Mr Culley disagreed with the notion that the appearance of the three jacks (or any relevant winning combination) on the machine caused the entitlement. Rather the machine would transmit to the controller information which would be recognised and according to the programme move from zero to one if the information transmitted told it that the three jacks had appeared. This process of recognising three jacks and moving zero to one was a count. It was the count, Mr Culley said, that gave the entitlement to a prize, not the appearance of the symbols on the face of the machine. 43 The second, a mystery quantum equalisation or count trigger, worked as follows. A master number was chosen (randomly or arbitrarily) in or by the controller or operator of the controller. During the relevant phase the signals from each play of the machines went to the controller and were added up until this accumulated number equalled the chosen master number. If the master number can be "1" (especially if it can be set arbitrarily so) and if the combination of symbols can be seen as being counted once (rather than merely recognised), it could be said that a winning combination as the trigger could be counted --- that is counted '1' equalling the set master number of '1'. I agree with Mr Culley's description that the controller monitors and processes information or data that it receives including event detection such as with Megabucks a winning combination. I think that a divergence occurs in our understanding of the win entitlement and its detection and I can categorise that by describing my own view is that the win having occurred, the win event having occurred on Megabucks the detection through the monitoring and processing at the control level is an administrative process, not a determining one. If the machine gets a combination, as I mentioned before, and the controller doesn't know about it a payment won't happen. Likewise you could insert a coin. That machine has now got an entitlement to win if that was the correct number of coins. If the controller didn't know about it you still would have no completed payment. So I see both parts as being necessary to be a complete system. I think that is where we differ. If the application refers to every play being counted (as it does) then if the chosen play signal generated to be counted is a non-zero number every time, that is if the chosen play signal is always the number 1 or more than 1, that must be so only if the chosen play signal has something to do with some attribute of playing the machine: for example, how many coins inserted, how much money wagered. This would not be the case if some aspect of winning determined the chosen play signal, since the player does not win on every play. The specification, however, clearly identifies coins-out as one subject of the play signal to the controller. This will not occur on every play. Therefore, the specification contemplates a chosen play signal that does not occur in every play. Thus, the counting can be seen as directed to the recognition and adding up of those events --- because all are separately counted. If the chosen play signal that is generated and that is to be counted does not necessarily occur in every play, it is apt to include a given combination. The consistory clause of the patent application in suit discussed the breadth of choice of play signals and their attributes that might be counted. The prize awarding phase further can be based on a chosen fixed value of play signals. 48 Mr Daley's view of the patent application was based on his view of the two triggers: "combination of symbols trigger" and "mystery quantum equalisation trigger": see Mr Daley's affidavit at [20]-[24]. On examination of Mr Daley's evidence, it might appear that the fundamental distinction in relation to the mystery trigger or count trigger is related to the "number of plays or other quantum event". (See [24] of Mr Daley's affidavit. ) That is, something from each play which is non-zero numerical is counted on each occasion. But that is not the case for the reasons set out in [47] above. This can also be seen in [24] of Mr Daley's affidavit in which there is reference to coin-out activity (which does not occur on every play) as one of the attributes of the plays that can be counted. Yet Mr Daley says the mystery trigger is fundamentally different from the combination trigger. This must be because he sees the difference between the two triggers as based on the notion of counting things that are themselves (in the sense of their essence) nominal being present in the mystery trigger, but absent from the combination trigger. At pp 124-25 of the transcript, Mr Daley explained this in an answer to me. The given combination of symbols has no numerical attribute to it, though of course one can count how many times it occurred. Of its own nature however it does not have a numerical attribute. There does not appear to be anything in the patent application which limits the repertoire of play signals that can be generated and counted. They clearly include events which will not occur in every play (coin-out). Therefore the notion of separate counting for their occurrence encompasses monitoring and attributing zero when such an event did not occur and attributing a positive number or numbers when it did. Page 3a appears to specifically include the possibility of a combination. 50 Thus, the specification does not appear to exclude the possibility of the relevant play signal generating information about combinations and when they occur. If that is correct then the patent in its terms does not reflect the dichotomy seen by Mr Daley. Considerations such as these led Mr Daley to identify as a relevant factor that the combination occurs at the level of the gaming machine (and not of the controller) and that the only trigger that is relevant to the patent application is a so-called count trigger or mystery quantum equalisation trigger at the level of the controller, not the gaming machine. 51 The claim is for a method wherein the prize is executed by a counting of play signals (referable to a defined aspect of the play of the game) to a given level (the prize win count). What is to be counted by reference to the play signal is not defined; but it is some aspect of the playing of the game. 52 The method in the specification is wide enough to encompass the possibility of setting the prize win count value at "1" and of choosing an aspect of the play, including a particular combination or result, as the part of the signal to be counted. This would produce a bonus win when a particular combination appears for the first time. Equally, the prize win count may be fixed (arbitrarily or randomly) at 2, 3, 5, 10 and so on, such that the bonus prize is won by the 2 nd , 3 rd , 5 th , 10 th and so on particular combination that is reached by counting. 53 Thus, even accepting for the moment the respondent's submission that "count" is used in the patent application in a sense wider than merely recognising and recording the occurrence or non-occurrence of an event and includes the notion of adding up to (counting up to) an enumerated value, the patent application can be seen to encompass the setting of the prize win count value to "1" and the criterion of the play which is separately counted as an event involving a given combination. 54 There does not appear to be any reason from the specification why the prize win count value could not be '1'. That this is so is made clear by Mr Daley's description in his affidavit of triggers and count triggers. In that discussion he refers to a "master number" being randomly generated. Such could be "1" to whatever number was shown as a limit for the random generation. 55 Thus the claims of the patent application in suit can be seen to be wide enough to cover the (count of the) first (if the prize win count value is "1") signal of a chosen combination of symbols. It would also cover the 2 nd , 3 rd , 50 th or 100 th occasion that the chosen combination of symbols appeared. 56 The words of claim 1, read in the light of the specification, appear to be wide enough to encompass the prize awarding phase operating with a prize win count value of "1" and a play and play signal therefrom being a particular combination of symbols as the subject or event counted (on this hypothesis counted to "1"). In those circumstances, one of the many prize win count values could be "1" and one of the many criteria of play signals counted could be a given combination. Thus, the counting of the subsequent plays of one or more of the gaming machines are separately counted for their occurrence and the count of the first given combination equalled the prize count value of "1". The present invention provides a means of providing a bonus prize that is different from and has advantages over known methods. The connection of the gaming machines to the controller allowed transmission of electrical signals between the machines and the controller. The signals might relate to a percentage of payments into the machine or games played on the machine. It simultaneously arrests games being played on the individual machines and imposes a secondary game screen common to all machines. The first machine to display the combination of three jacks wins the bonus and thereafter the programme of the controller causes the individual machines to revert to their original games. The applicant submitted that the phrase is wide enough to encompass a mystery quantum equalisation trigger, and that the disclosure thereby was sufficiently clear to amount to an anticipation. 63 The body of the specification of the Bennett Patent only expressly disclosed a combination trigger as illustrative of the predetermined objective. The combination trigger is the illustration used in the body of the specification and in the drawings. The present embodiments are, therefore, to be considered in all respects as illustrative and not restrictive. This point is made most clearly in Mr Daley's evidence. Mr Daley was clear in his evidence that the phrase predetermined objective was wide enough to include any one of the numerous parameters available as a basis to award a prize or to act as a trigger, including a mystery quantum equalisation trigger or combination trigger. Mr Daley, however, in the context of the various references in the Bennett Patent to combination triggers, interpreted the general phrase "predetermined objective" to be limited to a predetermined objective by combination trigger. If the prior inventor's publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee's claim if carried out after the grant of the patentee's patent, the patentee's claim will have been shown to lack the necessary novelty, that is to say, it will have been anticipated. The prior inventor, however, and the patentee may have approached the same device from different starting points and may for this reason, or it may be for other reasons, have so described their devices that it cannot be immediately discerned from a reading of the language which they have respectively used that they have discovered in truth the same device; but if carrying out the directions contained in the prior inventor's publication will inevitably result in something being made or done which, if the patentee's patent were valid, would constitute an infringement of the patentee's claim, this circumstance demonstrates that the patentee's claim has in fact been anticipated. To anticipate the patentee's claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented: Flour Oxidising Co Ltd v Carr & Co Ltd (1908) 25 RPC 428 at 457, line 34, approved in BTH Co Ltd v Metropolitan Vickers Electrical Co Ltd (1928) 45 RPC 1 at 24, line 1. A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee. If something remains to be ascertained which is necessary for the careful application of the discovery, that affords sufficient room for another valid patent. 67 The reverse infringement test cannot be applied literally: see Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 528 and R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565 at 568-569. And see generally Bristol Myers Squibb Company v FH Faulding & Co Ltd [2000] FCA 316 ; (2000) 97 FCR 524 at 546-49 [60] - [68] ; Jupiter Ltd v Neurizon Pty Ltd (2005) 65 IPR 86 at 105-106; Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 67 IPR 230; Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 at 66-69 [311]-[324]; Imperial Chemical Industries Pty Ltd v Commissioner of Patents (2004) 63 IPR 476 at 487-490 [60]-[68]; Merck & Co Inc v Arrow Pharmaceuticals Ltd [2006] FCAFC 91 ; (2006) 68 IPR 511 at 537-538 [104] - [112] . 68 The Bennett Patent undoubtedly discloses a two stage progressive prize system. It discloses the accumulation of a bonus prize in a separate and antecedent prize accumulation phase. It discloses a separate and subsequent prize awarding phase. Taking the Bennett Patent only to disclose a combination trigger, the question arises whether it would infringe the patent granted based on the application. For the reasons that I have already set out, in my view, the terms of the claims as drawn in the light of the body of the application encompass a master number in the prize awarding phase, the prize win count value --- being set at '1" and the play signals being counted being some combination. On this basis, the Bennett Patent would infringe by reason of the first combination chosen being the event which is counted to "1". I do not think that this gives a forced construction to the word "count". In one sense, it is merely the controller recognising the combination. But there is nothing in the claims of the patent application which restricts the prize win count value to a number above '1', or which restricts the subject of the play signal to subjects other than symbol combinations, or which restricts the claims to what Mr Daley would distinguish as a mystery quantum equalisation trigger and excludes from the purview of the claims a combination trigger in the second stage. Nor do the claims identify secrecy, as opposed to a known winning combination. 69 On this construction of the patent application, which I think is correct, the Bennett Patent anticipates claims 1 and 9. 70 Aristocrat presses another basis for anticipation even if it be the case that the patent application is not to be construed as wide enough to encompass a combination trigger. It submitted that the evidence was clear that anyone skilled in the art would understand that the Bennett Patent taught that the predetermined objective upon which to award the prize could be a mystery quantum equalisation trigger. The applicant stressed the clear evidence of Mr Daley as to the breadth of the phrase and the clear statement in the specification set out above that the embodiments were illustrative only. Recognising that the numerous variations and the drawings were illustrative and not restrictive of predetermined objective, there was nothing to detract from the clear disclosure of the use of any kind of well-known trigger to award the prize in the second phase. In particular, it was said that the lack of an illustrative mystery quantum equalisation trigger did not teach away from the clear disclosure made by the well-understood phrase. 71 On the other hand, IGT says that though the phrase "pre-determined objective" has a wider meaning, it is clearly used in the context in the Bennett Patent as referring only to the use of a set winning combination. 72 IGT is correct that the context of the use of the phrase, in particular on page 3 lines 19, 29 and 34, page 4 lines 10 and 18, and figures 1, 2 and 4 reveal that the only use of the word is by reference to a combination trigger. These references do not, however, limit the terms of the claims which are in language which the witnesses agree is wide enough to encompass a mystery quantum equalisation trigger. The words have that meaning to someone skilled in the art and such a trigger, it was well-known and well-understood. In my view, the Bennett Patent teaches through its own clear language that the prize awarding stage, being the second stage of the game can end with the use of a mystery quantum equalisation trigger. 73 The embodiments did not give any narrower meaning to the phrase "predetermined objective". Rather it was (non-exhaustively) exemplified in one way --- by a combination trigger. The phrase "predetermined objective" would be understood by anyone of ordinary knowledge of the subject to include both a combination trigger and a mystery quantum equalisation trigger. Thus the Bennett Patent can be understood to say that that the programme was arranged so that the programme causes the controller to impose a new game common to all machines and to award a bonus prize to the player of any machine first to achieve a predetermined objective whether by combination trigger or mystery quantum equalisation trigger, the embodiments being by reference to combination triggers. 74 In my view, the terms of the Bennett Patent state the use of a mystery quantum equalisation trigger as the trigger to cause the winning of the bonus prize in the second and separate prize awarding phase. 75 So understood, the patent application was anticipated and was and is not novel. 77 The system was described by Mr Culley as a so-called "Linked Progressive". The system comprised some 20 to 30 gaming machines installed in two clubs in New South Wales, the Twin Towns Service Club and the Benora Point Sports Club. These gaming machines were linked via a dedicated phone line to a controller located at a head office in Sydney to form a linked network. The operators at the clubs in which the Megabucks System was installed had a good working knowledge of the system because they were required to monitor the operation of the system and liaise with the company running the controller. The progressive prize was awarded to the gaming machine on the network whose play first generated the combination of symbols representing the highest paying award on the pay table or the jackpot. The software defining the operation of the system implemented a set of parameters for the progressive game. The maximum progressive prize was set at $100,000 because at the time the system was operating the Liquor Administration Board guidelines prescribed that the maximum value of any progressive prize that could be awarded on linked progressives was $100,000. The system was described in detail in [49] of Mr Culley's affidavit. I do not set all of that out in detail. In short, there was a bonus prize awarded through a combination trigger which could be won at any time in addition to normal prize winning. It could be won as soon as the game for it commenced. There was no second phase until a point (which might not be reached in any particular game) that the Liquor Administration Board limit of $100,000 was reached. In those circumstances, there had been, so Aristocrat said, a first stage in which that $100,000 prize was accumulated and thereafter a second phase which could be seen as the prize awarding phase. The prize was awarded, as I have said, with a combination trigger. Once the prize was set at $100,000 by the limitation of the Liquor Administration Board rules, the criteria which had led to the accumulation of the prize to $100,000 continued to accumulate in another pool which was carried over into the next game. 78 Whilst I do not accept Mr Daley's construction of the patent application, I do agree with Mr Daley that the Megabucks System is not a two-phase progressive jackpot system. Rather it is, in essence, a single-phase system. Even if the $100,000 limit is reached, the game has operated up to that point with a prize accumulation and prize awarding phase being coterminuous. The patent application in suit calls for two separate and always separate phases. For this reason, I do not think that the relevant integer of the patent application claims, that is the two stage operation, is met by the Megabucks System. 80 In reaching these conclusions, I have considered the questions of onus and the function of the Court in an appeal such as this. The common ground between the parties that I must reach a concluded view about the meaning of the patent application and the asserted anticipation leads to the result that I have come to. Ms Howard, senior counsel for IGT, strongly pressed me with the argument that to the extent that novelty was to be decided by what the Bennett Patent taught the reader, there was room for a difference of opinion. In such a case, the relevant disclosure could not, she submitted, be concluded with the necessary clarity. Notwithstanding these submissions, in my view, the proper construction of the patent application in suit and of the Bennett Patent leads to the conclusion that it is practically certain that the patent to be-granted on the specification would be invalid on the ground that it was not novel at the relevant date. On one view, it is a matter of appreciating that the patent application in suit was wide enough to encompass the Bennett Patent; on another view the Bennett Patent used language to be understood as, in terms, stating the relevant integer of the patent application in suit --- that the prize in the second phase could be awarded by a mystery quantum equalisation trigger. 81 I appreciate that this conclusion diverges from the views expressed by the delegate. It is clear that the delegate did not have available to him the clarity of evidence about the meaning of the phrase "predetermined objective" that I did. The description at page 2, lines 32 to 34, states that after any games have been suspended, the controller acts to "...impose a new game common to all machines and to award a bonus prize to the player of any mancine first to achieve a predetermined objective...". The "predetermined objective" consists of a nominated line-up of cards, and the only example provided of this is the first machine to display the combination of three jacks. It is clear that Ainsworth is concerned with a linked gaming machine system having a prize accumulation phase and a prize awarding phase. It cannot be said, however, that the citation discloses "plays of one or more of the gaming machines [being] separately counted for their occurrence..." (my emphasis), as required by claim 1 of the present invention. In Ainsworth, the bonus prize is awarded to the first player who achieves the "predetermined result". Play signals from the other linked gaming machines have no influence during this prize awarding phase. The play signals are not accumulated in any fashion, and the likelihood of any one player achieving the predetermined result is independent of all the other players. This is unlike the situation in the instant application, in which play signals from every player are counted towards the "prize win count value". This strikes me as a significant difference. Furthermore, to characterise the occurrence of a particular line-up of cares as a "count" is to impose a construction beyond the fair meaning of the language used, and I see no reason to depart from the plain meaning of the word. 83 Thus, giving respect to the view of the delegate, I have come to a different view as to the meaning and content of the words in the claims of the Bennett Patent. The known details of the operation of the Megabucks System, in my view, made it clearly part of the common general knowledge. No serious debate took place in relation to this. 85 I am not, however, prepared to conclude on the evidence of Mr Culley and Mr Daley that it was practically certain that there was no inventive step from the common general knowledge reflected in the specification of the patent application and Megabucks System. Whilst the different types of triggers were both well known, the existing common general knowledge (which on this hypothesis excludes the Bennett Patent) did not use a two phase system in which a prize awarding phase was concluded by the award of a prize based on a mystery quantum equalisation trigger. Given the test set out in cases referred to earlier, I do not think it can be concluded that it was practically certain that this was obvious. If the Bennett Patent were seen as part of the common general knowledge a different conclusion might well arise, even if I am wrong about the clarity of what it teaches for the purposes of novelty. Rather, it contemplates and encompasses play signals generated which are based on numerical notions of coin-in (that is money in) coin-out, play duration (that is a length of time and number of game plays and quantum wager). So limited, this does not encompass, and would not be anticipated by a piece of prior art such as Bennett Patent dealing with, a combination trigger in the prize awarding phase. However, the alternative reason why there is anticipation here, that is the breadth of the terms and teaching of the Bennett Patent equally deals with these claims because the Bennett Patent stated and taught that any form of mystery quantum equalisation trigger (and thus counting to a nominated prize win count to award the prize) at the second phase. Also, whilst the limitations on the machines which can participate in the prize awarding phase is not taught specifically by the Bennett Patent, the terms and teaching of the Bennett Patent are that any mystery quantum equalisation trigger can be used in the second phase and the Bennet Patent can thus be seen to anticipate in this regard. A system as claimed in any one of claims 9 to 15, further operable to continue to add a value for each play signal during the prize awarding phase, accumulate the added value during the prize awarding phase into an excess pool, initiate a second prize accumulation phase after the prize awarding phase, and use the excess pool as at least a portion of an initial value during the second prize accumulation phase. Bennett Patent did not teach this. However, claims 8 and 16 are only valid if some earlier claim, such as claim 3 can survive, for the reasons I have expressed earlier I do not think that is the case. A method of awarding a bonus prize substantially as herein described and as shown in the accompanying drawings. A gaming machine system substantially as herin [sic] described and as shown in the accompanying drawings. I may have misunderstood the arguments of IGT in this regard. I propose to have the parties bring in short minutes in the light of these reasons. In that process the parties may wish to turn their attention to any aspect of the submissions which may be said not to have been fully dealt with in these reasons. 99 Aristocrat should bring in short minutes to reflect these reasons. Subject to hearing the parties, the applicant would appear to be entitled to the orders sought in the notice of appeal. If there is any aspect that I have overlooked referable to the way the various claims fall out, this can be taken up in any debate on the form of orders. I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop . | patents patent for a system of bonus prize winning mode on gaming machines opposition to the grant of patent degree of weight given to views of the delegate of the commissioner of patents issues for court in opposition proceedings patent application construction principles whether lack of novelty or anticipation application of reverse infringement test whether obvious intellectual property |
These are the Court's reasons for dismissing the appeal. 2 The appellant appeals from the judgment and orders of Federal Magistrate Phipps: see Liyanage v Minister for Immigration and Multicultural Affairs [2006] FMCA 725. His Honour dismissed an application for review of, and relief by way of prerogative writ in respect of, a decision of the Migration Review Tribunal dated 2 November 2005. 3 The 2 November 2005 decision affirmed a decision, made on 25 August 2004, of a delegate of the Minister for Immigration and Multicultural Affairs to cancel the appellant's Student (Temporary) (Class TU) visa, subclass 573. A breach of this section is also an offence: see section 104. 11 Since arriving in Australia, the appellant has been granted a series of Student (Temporary) (Class TU) visas. On 25 February 2000 he was granted a further subclass 560 visa and on 30 January 2002 he was granted a subclass 572 visa. The appellant was then granted a subclass 573 visa on 19 June 2003, which was valid for stay until 15 March 2005. Attached to the subclass 573 visa was condition 8202. 12 On 6 September 2003, Central Queensland University sent the appellant a "Non-compliance notice" which was said to be issued pursuant to s 20 of the ESOS Act. The notice had been sent on the basis of the appellant's academic results. It also stated that his student visa would be cancelled 28 days later unless he attended the offices of the Department of Immigration and Multicultural and Indigenous Affairs. 13 The appellant failed to respond to the notice, or to contact the Department, and on 5 October 2003 his visa was automatically cancelled pursuant to s 137J of the Migration Act . 14 On 8 October 2003, the appellant applied for the automatic cancellation of his student visa to be revoked. This was done on 2 February 2004 on the basis that the appellant had not in fact breached condition 8202. 15 On 14 July 2004, the Kangan Batman Institute of TAFE issued a similar notice under s 20 of the ESOS Act. His term 1 attendance is 45%, term 2 is 37%. Overall attendance in semester 1, 2004 is 40%. He has not yet paid his tuition fees due on the 2nd July 2004. The day count begins on the first day after the date of this notice and ends on the 28 th day thereafter. 18 On 25 August 2004, the appellant's visa was cancelled on the grounds of a breach of condition 8202, subparagraph (3)(a). OVERALL IN SEMESTER 1 OF 2004 HE ATTENDED 40% OF CLASSES. THESE ABSENCES ARE DEEMED BY DIMIA TO BE PART OF THE 20% OF ALLOWED ABSENCE. THEREFORE, THE ATTENDANCE FIGURES ABOVE ARE NOT CHANGED BY THE PRESENTATION OF THE CERTIFICATES, THEY WERE NOT PRE-APPROVED. In the meantime, the Tribunal requested further information from the Institute about the appellant's attendance, including the documentation used to calculate that attendance. Further information was provided by the Institute to the Tribunal on 10 November 2004, however, it was not provided to the appellant at that time. 20 The appellant's migration agent sent a facsimile to the Tribunal on the morning of 16 November 2004, advising that due to illness the appellant would not be able to attend the hearing listed for that day. When no further communication was received from the appellant or his migration agent over the ensuing 72 hours, the Tribunal proceeded to determine the review, pursuant to s 362B(1)(b) of the Migration Act , without taking any further action or allowing the appellant to appear before it. 21 On 30 November 2004, the Tribunal affirmed the decision of the delegate. Following an application by the appellant to the Federal Magistrates Court, the matter was, however, remitted by consent back to the Tribunal on 13 May 2005. 22 On 3 August 2005, the Tribunal invited the appellant to comment on information which it considered would be the reason, or a part of the reason, for affirming the decision under review. The information in question was that provided by the Institute which seemed to demonstrate that the appellant's attendance had been 62% for term 1 of 2004 and 22% for term 2 of 2004. 23 On 16 August 2005, the appellant's migration agent sent a submission to the Tribunal stating that the appellant disputed the Institute's record of attendance. The submission claimed that the appellant's attendance was not marked, that he was said to have been absent on 25 April 2004 which was a Sunday, and that there were several discrepancies between the Institute's academic timetable and the record of attendance. The appellant's migration agent also advised the Tribunal that he had written to the Institute about the record and requested more time in order to receive a response. The Tribunal granted such an extension on 24 August 2005. 24 On 2 September 2005, the Tribunal received a further facsimile from the appellant's migration agent which attached two letters to the Institute. The facsimile also stated that the Institute's record of attendance was not reliable for the reasons previously mentioned and because the appellant was marked absent whenever he arrived late to class. 25 A hearing was scheduled for 3 October 2005. On 20 September 2005, however, the appellant's migration agent sent a facsimile to the Tribunal. That facsimile stated that the Department had decided to revoke all cancellations that had flowed from any s 20 notice sent to a student in the period from May 2001 to 16 August 2005. The migration agent submitted that on the basis of that policy change, the Tribunal may no longer have jurisdiction. 26 A case officer from the Tribunal subsequently contacted the appellant's migration agent and advised that the Department's notice only applied to students whose visas were cancelled automatically under s 137J of the Migration Act and not to visas that were cancelled under s 116. Accordingly, the appellant's migration agent was informed that the hearing would proceed on 3 October 2005. 27 In his oral evidence at the hearing on 3 October 2005, the appellant gave further details of illnesses that he had suffered during both terms 1 and 2 of 2004, some of which had been evidenced by medical certificates and others which had not. He also restated his belief that the attendance records had not been calculated correctly. It did so on essentially three bases. 29 First, it reviewed the procedure for cancelling visas under the Migration Act and found that the procedure had been followed. It stated that the notice of intention to cancel the visa clearly set out the grounds of the alleged breach and that the appellant had been given time to consider the notice and prepare his response. 30 Second, it held that once a breach of condition 8202 had been established, s 116(3) and reg 2.43(2)(b) operated to make cancellation of the visa in such circumstances mandatory. The Tribunal held that it had no discretion to set aside the cancellation. In that regard it relied upon the judgments of Minister for Immigration & Multicultural Affairs v Nguyen [2002] FCA 460 and Minister for Immigration & Multicultural Affairs v Hou [2002] FCA 574. 31 The Tribunal noted that the Migration Amendment Regulations 2005 (No. 8) (Cth) had introduced an "exceptional circumstances" test in relation to visas cancelled under s 116. However, as that amendment only applied to visas cancelled on or after 8 October 2005 it did not assist the appellant. 32 Last, the Tribunal found that the appellant had in fact breached condition 8202. It applied Pradhan v Minister for Immigration and Multicultural Affairs [1999] FCA 1240 ; (1999) 94 FCR 91 in concluding that the operative version of condition 8202 was that which applied on the date the visa was granted. 33 The Tribunal referred to the decisions of Quan v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 764 at [33] - [34] per Jacobson J and Singh v Minister for Immigration and Ethnic Affairs [1994] FCA 1011 , and found that it was required to be satisfied "to a high degree" that the information upon which the visa cancellation was based was correct. 34 The Tribunal found that there had been errors in the calculations of attendance for both terms 1 and 2. In term 1, it found that the medical certificates had not been taken into account as they should have been and, as a result, the appellant had in fact attended 91% of classes. Accordingly, he was not found to have breached condition 8202 in that term. However, the Tribunal found that even when considering the medical certificates and the correct hours which had been attended in term 2, the appellant's attendance would only be 35%. That attendance level was "far below" the required 80%. 35 The Tribunal was therefore satisfied that a breach of condition 8202 had occurred in term 2 of 2004. In light of that conclusion, it held that the mandatory nature of s 116(3) and reg 2.43(2)(b) required it to affirm the delegate's decision. Originally he did so on the basis that the s 20 notice was invalid. However, a Full Court of this Court had subsequently held that a cancellation under s 116 of the Migration Act was not dependant on the validity or otherwise of a s 20 notice: see Humayun v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 35 ; (2006) 149 FCR 558. 37 The appellant then submitted an amended application on 23 February 2006. The appellant submitted that even though the decision in question had been made prior to the 8 October 2005 amendments, a requirement for the Tribunal to provide natural justice applied. In his reasons for judgment, Federal Magistrate Phipps found, however, that the cases the appellant relied on in that regard were of no assistance. 38 His Honour also held that even if the appellant had been misled by the warnings given by the Institute, that did not effect the validity of the Tribunal's decision affirming the cancellation of the visa. His Honour held that once the Tribunal came to the conclusion that the appellant had failed to attend 80% of contact hours in term 2, the Tribunal was obliged to affirm the cancellation. 39 The appellant also submitted that the Tribunal had erred in the way it had dealt with the evidence that the education provider's policy was to mark students absent if 15 minutes late. He referred to the Tribunal noting that the Institute had confirmed the policy in a letter and advised that he had been late in June but not marked as absent. He argued that this did not exclude the possibility that he had been marked as absent on other occasions. He contended that there were two points of significance arising from this. First, that the Tribunal had misled itself and, second, that it should have waited for further comments from the Institute or sought further information about attendance. 40 The Federal Magistrate rejected both of these contentions. His Honour held that the Tribunal had been entitled to conclude that the letter meant that the appellant had not been late in April or May. He further held that there was no legal obligation on the Tribunal to make inquiries and that the Tribunal had not breached any requirements for procedural fairness. However, she has also correctly submitted that the invalidity of a s 20 notice does not lead to the invalidity of a subsequent decision of a delegate of the Minister, or the Tribunal, to cancel a visa pursuant to s 116 of the Migration Act : see Humayun and Minister for Immigration and Multicultural and Indigenous Affairs v Zhou [2006] FCAFC 96 ; (2006) 152 FCR 115. In any event, the Tribunal did not rely on the information contained in the s 20 notice when satisfying itself that the breach of condition 8202 had occurred. Accordingly, for both of those reasons, the appellant's submission that the s 20 notice was defective and invalid is of no consequence in the present appeal. 43 In response to the appellant's contention that the Tribunal misconstrued and misapplied the operation of condition 8202, the Minister submitted that she was not obliged to consider any "exceptional circumstances". She stated that the amendments set out in Sch 5 of the Migration Amendment Regulations 2005 (No. 8) (Cth) only apply to visas that were in force on or after 8 October 2005, which is the date that Sch 5 came into force. 44 In Zhou , the Full Court of this Court accepted that the amendments could not assist a person whose student visa was cancelled prior to 8 October 2005. The effect of the amendment is to import an additional element into the matters which the Minister must consider before cancelling a visa for breach of a condition 8202. That element is that "the non-compliance was not due to exceptional circumstances beyond the visa holder's control". The effect is therefore to place the procedure under s 20 of the Overseas Students Act and s 116 of the Migration Act on a similar footing with respect to consideration of exceptional circumstances. The amendment came into effect on 7 October 2005 and so cannot assist Ms Zhou. It does however serve to address any apparent injustice implicit in the argument of "legal interaction" by reason of the fact that the requirement to attend in response to a s 20 notice afforded an opportunity for service of a s 119 notice. The necessity for this amendment is nevertheless confirmatory of the opinion we have reached that, without it, the relevant and regulatory provisions do not allow us to uphold the reasoning of the federal magistrate. 46 The Minister has further submitted that the Federal Magistrate was correct in holding that the Tribunal was entitled to interpret the letter from the Institute setting out its absentee policy in the manner that it did. I agree that the Federal Magistrate was correct in so holding, particularly when regard is had to the circumstances in which the Tribunal drew the conclusions that it did. 47 The appellant submitted that the Tribunal had denied him procedural fairness because it had failed to wait for a response from the Institute when the appellant queried the accuracy of the attendance records. The steps taken by the Tribunal in attempting to ascertain the accuracy of the attendance records have been set out above. It is also clear that the Tribunal took the appellant's evidence with respect to illness into consideration. As the Minister submitted, the appellant was given ample opportunity to make submissions to the Tribunal in relation to all relevant matters. She further stated that the appellant did not make any submission to the Tribunal that it ought wait for the Institute's response. In the circumstances outlined above, I consider that the Tribunal was entitled to make the decision on the material before it. I agree with the Federal Magistrate that there was no denial of procedural fairness. 48 Accordingly, the appeal will be dismissed with costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | appeal from judgment and orders of federal magistrate affirming migration review tribunal decision breach of condition 8202 student visa cancelled pursuant to s 116 of the migration act 1958 (cth) on ground of failure to attend at least 80% of contact hours whether federal magistrate erred whether jurisdictional error established migration |
Although it is the second applicant, Peninsula Hospital Management Pty Limited, which is the first cross-respondent to the cross-claim and therefore the party which chiefly agitates this application, I will for the sake of ease refer to the "applicants" as having made the application. 2 The background to and nature of the principal proceedings in this matter are set out in a previous judgment given by me in relation to an application by the applicants for an asset preservation order: see KGL Health Pty Limited v Mechtler [2007] FCA 1410. I will not reiterate those matters. ... all correspondence and records of communication between your client (or its solicitors and/or other agents) and the purchaser (or its solicitors and/or other agents) concerning the purchase of the property, the intended use of the property and any claims arising by the purchaser after the sale of the property. The first is an entitlement to damages for lost rent, other outgoings and interest up to and including the date on which the lease of the premises was terminated on 10 May 2007. The second is damages for loss as a result of the cost of restoring and reinstating the premises to a state of good repair. The third is damages for the loss of bargain on the basis that, but for alleged breaches and repudiation of the relevant lease by the applicants, Rosanza would have retained ownership of the premises at least until some time between 12 September 2009 and 2 March 2010, and in that period would have received the benefit of the lease, including rent less expenses. Finally, Rosanza claims for loss in respect of legal and other costs in connection with the default under the lease by the second applicant/first cross-respondent. 5 The crux of the applicants' application is that Rosanza in its cross-claim seeks damages for the loss of bargain of the lease and, despite the property having been sold on 12 September 2007, quantifies and particularises these damages by reference to the rent it would have received after this date. Therefore, the applicants contend, the documents it seeks are relevant to Rosanza's damages claim, especially on the question of mitigation. 6 The applicants also submit that a major area of dispute between the parties relates to the various "unauthorised" works which took place on the hospital premises, and that, in order to ascertain which works were unauthorised, it is necessary to investigate the works done, the extent to which they were unauthorised, and the directors' knowledge as to whether any works had been done without approval or authorisation. In particular, the applicants contend that the physical state of the premises and the works done may be matters raised in correspondence between Rosanza and its real estate agents, legal advisors or potential purchasers. The suggestion is that such correspondence may comment on or disclose the actual state of the property which was being put up for sale. In addition, the applicants submit that information as to the intended use of the property by a purchaser may be relevant to the damages claims because, for example, it may show that those claims are excessive. 7 On the question of mitigation, the applicants submit that further discovery is appropriate because they are entitled to explore whether the promotion for sale of the property and communications with potential purchasers may disclose matters which assist in deciding whether there is an excessive claim. The issue here, according to the applicants, is whether Rosanza is entitled to contend that there has been no mitigation of damages as a result of selling the property on 12 September 2007, and whether the issue of mitigation is affected by any evidence that Rosanza failed to obtain the best sale price or failed to market the property appropriately. This, it is said, is an aspect of the damages claim which the applicants seek to explore through further discovery. I note at this point that there has been no reference to mitigation of damages in the formal pleadings to date. However, the applicants state that they intend to respond to Rosanza's Further Amended Cross-Claim (filed on 6 February 2008) and raise this issue. 8 In my view, the proposed classes of further discovery as set out in the letter from the applicants' solicitors dated 15 November 2007 are too broad and, at times, do not appear relevant to the dispute. The applicants' application for further discovery should be dismissed. 9 For the above reasons, I am of the view that the proposed classes of discovery, as presently framed, are too wide and at times not relevant, and therefore an order for discovery in those terms is not warranted. With some suitable modification, it may be that the classes could be more specifically stated to eliminate the objectionable expressions. In particular, phrases such as "any other interested party" in several of the classes, and "any claims arising ... after the sale of the property" in class 16 require some revision. This is a matter to be resolved between the parties. 10 In order to justify further discovery beyond that which is verified by an affidavit of a legal practitioner, generally it needs to be shown that there is some substantial or manifest failure to produce documents. Ordinarily, an affidavit of discovery will be conclusive. Insufficiency of discovery may be shown from the pleadings, from the affidavit or from any other source that constitutes an admission of a discoverable document: see Seven Network Ltd v News Ltd [2005] FCA 915. However, in this case, no such insufficiency has been shown. It is important when framing classes for discovery that the classes of documents sought be shown to be relevant to the dispute. That is a consideration, which my comments at [8] above indicate, which applies to some of the classes in this application. This Court will endeavour to limit discovery so far as possible to ensure that it is not excessive, and that only those documents which are necessary to ensure a fair presentation of a party's case are produced: see O 15 r 15 of the Federal Court Rules and Federal Court Practice Note No. 14. 11 This application for further discovery is dismissed with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | application for further discovery proposed classes too broad or not relevant insufficiency of current discovery not shown. practice and procedure |
He arrived in Australia on 17 October 2004, and shortly afterwards on 11 November 2004 he applied for a protection visa under the Migration Act 1958 (Cth) (the Act). He claimed in his protection visa application to have a well-founded fear of persecution if he were to return to Bangladesh by reason of his religious beliefs. 2 In his statutory declaration with his application, the appellant claimed that he was of the Buddhist religion, and had experienced persecution in Bangladesh both as a result of his religious belief and because of his participation in different activities for the welfare of the Buddhist community. He claimed that fundamentalist Muslims had threatened him and had attacked him and his family. He said he was a prominent target because his father was involved as an organiser of protest activities and the appellant himself was well known in the community in which he lived due to his participation in religious and community activities within the Buddhist community. 3 On 25 January 2005 a delegate of the first respondent refused to grant the appellant a protection visa. That decision was affirmed by the Refugee Review Tribunal on 26 May 2005. 4 The appellant then applied to the Federal Magistrates Court to quash the Tribunal decision for jurisdictional error. That appeal was dismissed on 22 February 2007. This is an appeal from the decision of the Federal Magistrate. 6 The appellant was 27 years old at the time of the Tribunal hearing. He was born in the Chittagong region, and lived in Raozan in Chittagong from May 1994 until May 2001. He studied for 12 years, including at a Buddhist orphanage institute in Raozan from 1994 until 2000, and then at a different institution in Sri Lanka between 2002 and 2004. His occupation was given as Buddhist monk. 7 In his protection visa application, he claimed that his father was involved in religious activities. In January 1994, Muslims tried to stop the celebration of a Buddhist festival, prompting protests by Buddhists, including the appellant's father. Consequently, he said, his family came under pressure to leave the area and his sister was assaulted and threatened with kidnap. His family home was attacked and set on fire. His family members were assaulted, and his grandfather died of that assault. As his family could no longer subsist, he was sent to the orphanage in Raozan. The other children were sent elsewhere. It was then that he embarked upon his career as a Buddhist monk. 8 The appellant then claimed that, following completion of his education as a Buddhist monk in 2004, he realised that his life would be in danger if he returned to Bangladesh due to his religion and his participation in welfare activities. In June 2000, he had been teaching in the Raozan area and had been warned by local fundamentalists Muslims to stop his activities. Those fundamentalists, together with local leaders, physically abused him on one occasion and endeavoured to ensure that he did not reclaim his parents' property. He therefore left for Myanmar where he stayed for about six months, but his visa was not renewed and he was forced to return to Bangladesh. In 2001, he then went to Thailand, India, Nepal and Laos looking for opportunities to practise Buddhism peacefully but was unable to stay in those countries. Eventually in 2002 he went to Sri Lanka for nine months before returning to Bangladesh, but as he was unable to practise his religion in Bangladesh he returned to Sri Lanka in January 2004. 9 He claimed that upon his return to Bangladesh in January 2004, the "Muslim terrorists" demanded a ransom from him as a non-Muslim living in an Islamic state. He left Bangladesh again because of a feeling of insecurity. While he had been there, he was involved in a demonstration organised by the Buddhist Welfare Society, which brought him to the attention of local thugs. 10 He claimed to fear that, if he returned to Bangladesh, he would be persecuted by reason of his religious beliefs and by reason of his membership of a particular social group, namely Buddhists who were acting and supporting their community. It did not accept that his movements in and out of Bangladesh were due to actual or threatened persecution. It did not accept his claims of the physical attack on his grandfather and sister, and the partial burning down of the family home in May 1994. It did not accept that he had been subject to extortion demands on his return from Burma in 2002. Overall, it thought that his claims of past harm in Bangladesh were not reliable, and that he did not leave Bangladesh at any time to escape harm but rather because of his commitment to pursue Buddhist studies and practice. 12 The Tribunal also included, on the basis of independent country information, that Buddhists are generally treated in an acceptable manner in Bangladesh, and are not subject to systematic persecution in Bangladesh. It therefore concluded that the mere fact that the appellant was a Buddhist or a Buddhist monk in Bangladesh did not give rise to a real chance of harm amounting to persecution. 13 It also concluded that, if the appellant genuinely feared returning to his own area for other reasons, he could safely and reasonably live in another part of Bangladesh, including in one of the cities or towns with Buddhist minorities. 15 That was a complaint of failure to accord common law procedural fairness, rather than a complaint based upon s 424A of the Act. Section 424A requires the Tribunal, in certain circumstances, to give to a visa applicant particulars of information which the Tribunal considers would be the reason, or part of the reason, for affirming the decision that is under review and to invite the visa applicant to comment on it. No complaint of contravention of s 424A(1) was made before the Federal Magistrate. 16 The allegations of a lack of procedural fairness were that the Tribunal had not specifically invited the appellant to comment upon its observation, in its reasons, that there would have been other opportunities over the years to harm the appellant or his father directly if the claimed victimisation were true; that it was unlikely that the local fundamentalists would have endeavoured to extort funds from him because they would have known that the appellant did not have the financial means to pay extortion demands; and that it was unlikely that the fundamentalists would have thought that the appellant would be able to arrest or reverse the decline in the family fortune. It was said that, as a matter of procedural fairness, the appellant should have been given the opportunity to comment on those three matters. 17 Section 422B of the Act excludes the operation of common law principles of procedural fairness in proceedings before the Tribunal: Minister for Immigration and Multicultural Affairs v Lat [2006] FCAFC 61 ; (2006) 151 FCR 214; SZCIJ v Minister for Immigration and Multicultural Affairs [2006] FCAFC 62. Those authorities establish that Div 4 of Pt 7 of the Act provides a comprehensive procedural code containing detailed provisions for procedural fairness with which the Tribunal must comply, and which excludes any other common law natural justice hearing rule. Consequently, the ground of alleged jurisdictional error argued before the Federal Magistrate could not be sustained. He contended that the appellant should be bound by the conduct of the case before the Federal Magistrate. Realistically, as counsel for the first respondent acknowledged, if those grounds of appeal are likely to result in success on the appeal and the quashing of the decision of the Tribunal, given the significant implications to the appellant of the present decision of the Tribunal which would have him return to Bangladesh, there would be strong reason to allow the proposed grounds of appeal to be pursued: cf SZAIX v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 3 at [66] ; NAJT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 134 ; (2005) 147 FCR 51. It was not satisfied that any part of that account was correct. It noted that the photographs of his grandfather's funeral provide no information as to the cause of his death, or as to the perpetrators, and that the mourners and bystanders pictured did not give the impression of there being any security concerns such as might be expected if a person's death was attributable to "terrorists". It was part only because it followed the Tribunal's observations about the photographs of his grandfather's funeral. The first was that, if the appellant or his family had been targeted by terrorists, there had been ample opportunity over the years to late 2004 to harm him and his family but that had not apparently occurred. The third was that it must have been known to the alleged extortioners that the appellant and his family did not have the resources to meet any such demands. Those three reasons led to the Tribunal to conclude that the appellant's claims of past harm in Bangladesh are not reliable. 24 The reference to the statement attached to the protection visa being discredited flowed from the appellant's evidence at the hearing before the Tribunal that his protection visa application and attached statutory declaration had been prepared by his migration agent, and had only been subject to cursory checking by him. The Tribunal accepted that the protection visa application and supporting material contained assertions which the appellant had not checked and which were not his. It said that it was, therefore, unable to rely on the text of the protection visa application and supporting material, and acceded to the appellant's request that it draw no adverse conclusions from minor discrepancies between that material and his oral evidence. 25 The particular document identified in submissions was the statutory declaration attached to the protection visa application then dated 11 November 2004. In that document the appellant had said that in early 1994 his family members were physically assaulted and his grandfather had died of that assault without treatment. When recording the appellant's oral evidence at the hearing before the Tribunal on 20 April 2005, the Tribunal noted the receipt of a submission on behalf of the appellant of 13 April 2005 which included two photographs of a funeral, and that at the hearing the appellant had said that the two photographs were of his grandfather's funeral taken in 2003 after he had been "attacked and killed by terrorists". The Tribunal also recorded the appellant as having described the May 1994 incident when local Muslims had attacked and targeted his family and had beaten up his grandfather, who sustained injuries from which he never fully recovered, and partly set the family home on fire. 26 The appellant contended on the basis of that material that the Tribunal had failed to give him written notice as required by s 424A(1) of the information in the statutory declaration about what he had then said about the circumstances of his grandfather's death. 27 The first respondent submitted that in the material referred to, in particular the quoted passage, the Tribunal has not used the inconsistency which emerged from the statutory declaration attached to the protection visa application about his grandfather having died in or around 1994, compared to his evidence at the hearing of his grandfather having died in 2003, as a reason or part of the reason, for affirming the decision under review. It was submitted that the Tribunal did not rely on the claim of the grandfather having been killed in 1994, but upon the appellant's explanation at the hearing as to why that claim had been made earlier. Consequently, the first respondent contended that there had been no use of information not provided by the appellant to the Tribunal within the meaning of s 424A(3)(b) so as to enliven the obligation under s 424A(1). The first respondent's counsel referred specifically to the Tribunal's observation that it did not intend to rely on the text of the protection visa application and that it would draw no adverse conclusions "from minor discrepancies between that text and his oral evidence. 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 and NAZY 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. 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. In the present case, the relevant information was uncontentious factual material that formed an essential element of the decisions which were under review by the tribunal. The appellant either expressly provided or affirmed the relevant dates in response to basic propositions put by the tribunal at the hearing. The tribunal's questions arose naturally from the appellant's application. In these circumstances, and given the uncontentious factual nature of the information, I consider that the exemption in s 424A(3)(b) applies. The appellant expressly stated the date of her arrival in Australia to the tribunal at the hearing. I do not accept the appellant's argument that s 424A(3)(b) cannot apply because the date was given in response to a question posed by the tribunal. The mere fact that the tribunal elicited a response from the appellant, which confirmed an uncontentious detail of her application, does not render the information incapable of falling within the exemption in s 424A(3)(b). It is not inconsistent with NAZY or SZEEU to hold that the exemption applies in such circumstances, given the nature of the information and the context in which it was communicated. I also find that the appellant 'gave' the date of her arrival in Australia and the approximate date of her protection visa application via her visa application and the written submissions provided to the tribunal by the appellant's adviser. The appellant affirmed that the details of her application were correct. The written submissions contained a statement which expressly referred to the appellant's statement attached to her protection visa application. In that statement, which was dated 17 November 2004, the appellant said that she 'came to Australia on strength of a 457 working visa on 12.3.99'. Thus, for the purposes of s 424A(3)(b) , the information was given in the written submissions: VWBF at [51]. 29 Alternatively, the first respondent contended, albeit perhaps with less enthusiasm, that the appellant before the Tribunal had adopted what he had put in his protection visa application and the accompanying statutory declaration subject to any additional qualifications, so that he "gave" the statutory declaration to the Tribunal for the purposes of his application for review: cf Applicant S301/2003 v Minister for Immigration and Multicultural Affairs [2006] FCAFC 155 at [17] . 30 Clearly, s 424A(3)(b) must be carefully applied according to its terms. It exempts from the operation of s 424A(1) information which the appellant gave to the Tribunal for the purpose of the application to the Tribunal. And the observations of Young J in NBKT [2006] FCAFC 195 ; 93 ALD 333 indicate that the question of fact as to whether particular information has been given to the Tribunal may sometimes be a difficult one, and sometimes the line between giving information to the Tribunal and between adverting in a general way to a collection of material (such as the material presented to the first respondent in support of an application for a protection visa) in a hearing before the Tribunal may be a fine one. Each case must be looked at on its own particular facts. By way of a comparison with the facts in NBKT [2006] FCAFC 195 ; 93 ALD 333, in SZGGD v Minister for Immigration and Multicultural Affairs [2006] FCA 1138 at [69] Jessup J concluded that the fact that that appellant's protection visa application contained a particular explanation for the death of his mother, which differed from that advanced by him at the hearing before the Tribunal, was a part of the reason for the Tribunal affirming the decision under review. The fact that he had conveyed that particular explanation in his protection visa information was accepted to be "information" within the terms of s 424A(1) of the Act and had not been given by that appellant in that case to the Tribunal. Consequently, his Honour concluded that there had been a failure to comply with s 424A(1) of the Act. 31 In this matter, at the hearing, the Tribunal recorded (in terms with which the appellant does not disagree) that he described the May 1994 incident in terms similar to his original statement, including an assault upon his sister, a home intrusion, the beating up of his grandfather who (the appellant then said) sustained injuries from which he never fully recovered, and the partly setting fire to the family home. The Tribunal apparently then raised with the appellant that he had said in his statutory declaration that his grandfather had died in about 1994 from that assault, because the Tribunal records (again in terms which the appellant does not dispute) that in his evidence to the Tribunal the appellant sought to explain that by saying that the 1994 incident had contributed to the death of his grandfather. As noted, by explaining that apparent inconsistency in that way, the Tribunal considered that the appellant had brought into question the cause of his grandfather's death, so that the Tribunal was not satisfied that his death had any link with terrorist-related activity. 32 In my judgment, those parts of the Tribunal's recording of its hearing indicate that the appellant acknowledged before the Tribunal that he had earlier claimed that his grandfather had been assaulted in 1994 and had died as a result of that assault. He has therefore explicitly given to the Tribunal at the hearing, in response to its questioning, the information that he had made that earlier claim in his statutory declaration with his protection visa. The Tribunal went beyond a general reference to his statutory declaration, and has elicited confirmation of that information having been given. 33 It was the nature of the explanations for that claim having been made which caused the Tribunal concern, rather than the fact of the appellant having earlier stated that his grandfather had died in 1994. The information therefore fell within s 424A(3)(b) so that s 424A(1) was not enlivened. In that respect, the appellant's contention is rejected. 35 Moreover, in my view, the Tribunal did not use the inconsistency in the two dates of death in the way the appellant alleged. It positively indicated that it did not place much weight upon the inconsistency between what the appellant is recorded to have said in that original statement and what he said at the hearing. In the particular passage of which the appellant complains, the Tribunal in fact recognises that that earlier statement was discredited. It was the appellant's attempt, notwithstanding his abandonment of that part of his earlier statement, to tie the events in 1994 to which he referred in part to the death of his grandfather which the Tribunal was concerned about. Consequently, in my view, there is no use of information which the appellant did not provide to the Tribunal at the hearing. Its process of reasoning was based upon the material exempt from the operation of s 424A(1) by s 424A(3)(b). It did not treat the earlier statement in that respect as the reason, or part of the reason, for affirming the delegate's decision, but the appellant's explanation for having made that earlier statement. That provides an additional reason why s 424A(1) was not enlivened in the way the appellant sought to contend. 36 It is not therefore necessary to consider the first respondent's alternative contention that the appellant, by explaining the circumstances in which the protection visa application and the accompanying statutory declaration had been made, had given to the Tribunal all the contents of the statutory declaration. There is, however, some apparent merit in that contention that he had thereby provided that material to the Tribunal, not as truthful information but as to the fact of having earlier given that information: cf Applicant S301/2003 v Minister for Immigration and Multicultural Affairs [2006] FCAFC 155. 37 The second proposed ground of appeal involves identifying that the appellant did claim to have been persecuted by reason of his membership of a particular social group. The Tribunal acknowledged such a claim, but identified it as a claim of membership of a particular social group, being Buddhist monks. The appellant contends that his relevant social group was those involved in welfare activities for the Buddhist community, that is religious activists and social organisers within that community. 38 It is clear enough that a failure to address a Convention claim clearly made by a protection visa applicant which gives rise to a well-founded fear of persecution amounts to the Tribunal constructively failing to exercise its jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389; Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244; NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 ; (2004) 144 FCR 1 at 18-19, [58] . 39 The issue between the parties was whether the appellant did identify before the Tribunal a claim to fear persecution by his membership of the more confined social group, namely those positively engaged in activities for the welfare of the Buddhist community (or as his migration agent put it: as "a religious activist [and] a social organiser within his [Buddhist] community". The first respondent submitted that no such social group was clearly identified before the Tribunal. 40 In NABE [2004] FCAFC 263 ; 144 FCR 1 at 18-21, [58] - [63] , the Full Court (Black CJ, French and Selway JJ) discussed the circumstances in which a claim to persecution for a Convention reason must be addressed by the Tribunal. Their Honours said that the Tribunal may be required to consider a claim not expressed by the visa applicant but open on the facts, provided it is squarely raised, that is provided that it is apparent on the face of the material before the Tribunal. They said at 19, [60], that the Tribunal is not obliged to deal with claims which are not articulated and which do not "clearly arise before from the materials it". In that case, no jurisdictional error was found to exist because the putative social group put forward by the appellant was not in respect of a group which was a "substantial clearly articulated argument relying upon established facts". 41 In the submissions, counsel for the appellant referred to several passages in the material before the Tribunal which were said to have identified the nature of the claim, even if not expressly articulated. (I put aside the fact that the first proposed ground of appeal is premised upon the basis that the document was not provided to the Tribunal by the appellant, and that the appellant asked the Tribunal to place no or little weight on it). It generally refers to the appellant's father in 1994 being involved with religious activities in their home area, and helping other community members, including helping to organise a religious festival which led to a hostile atmosphere between Buddhists and Muslims in the area. It also refers to the appellant from mid 2000 as a Buddhist monk engaging in community activities, and from May 2001 in religious activities in his family region where he attracted the attention of local fundamentalist Muslims. The concluding parts of that statement complains of discrimination against Buddhists generally in Bangladesh, and as he devoted himself to their interests in his family region of him attracting "fierce enmity" from the leaders of the local society. He then asserts having been persecuted "for my faith in Buddhist religion", including "selective harassment of the person as an individual or a member of a group". (That last reference is one of six descriptions of persecution, the others of which do not apparently focus upon the appellant as distinct from other Buddhists. The statutory declaration accompanied the protection visa application, which identified the fear of persecution as being for his religious belief. 43 The second group of references identified by the appellant are contained in the written submission of the appellant's migration agent to the Tribunal of 11 April 2005. It refers to the appellant as a Buddhist monk having taught members of the Buddhist community so as to attract the attention of local fundamentalist Islamists, and described him (like many others) as a "religious activist" vulnerable to persecution for his religious beliefs and his involvement in religious and welfare activities for his community. He was also said to be a social organiser. 44 The submission then, however, identified the appellant as vulnerable to persecution as a member of a religious minority and due to his religious affiliations. It said religious minorities are persecuted because they are regarded as political opponents. It referred to material about the position in Bangladesh concerning religious minorities including Hindus and Buddhists, and did not identify religious activists or Buddhist religious activists as a particular social group. We, therefore, request to consider his well founded [fear] of persecution that is not private or sectional and grant him refugee status. Upon analysis of the appellant's claims as presented to the Tribunal, he did not positively identify a claim based other than upon his religious beliefs as a Buddhist monk. Specifically, he did not either expressly, or by the articulation of the material he relied upon, identify separately a social group comprising socially active or politically active Buddhist welfare workers within the Buddhist community. At one point, his migration agent in a submission to the Tribunal describes him as "a social organiser within his community" but there is no identification of a separate and refined social group of the type now asserted: cf NABE 144 FCR at 21, [68]. The fact is, in my view, that no social group of that character was suggested to the Tribunal: cf STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 61 ; (2006) 231 ALR 556 at [39] . 46 The Tribunal recognised the appellant's claims to fear persecution on the grounds of religion, both by general discrimination against Buddhists and by reason of his religious and social welfare activities as a Buddhist monk. It recognised that the latter claim could be reformulated as membership of a particular social group, namely Buddhist monks. In doing so, it did not overlook the nature of the claim --- based on the appellant's activities as a Buddhist monk. It addressed both of those claims. In my judgment, no more refined social group was raised on the material before the Tribunal. It did not commit jurisdictional error by failing to address any more refined group. 47 Finally, in any event, the findings of the Tribunal mean that the Tribunal did not accept that the appellant, whatever the reasons for him fearing harm --- that is either as a Buddhist monk or as a member of a social group comprising socially active Buddhist monks or religious workers --- had a well-founded fear of harm upon his return to Bangladesh. No evidence was pointed to independently of the appellant's evidence supporting the existence of such a positive social group, or of any persecution of such a social group. It rejected his claims of past harm in Bangladesh, for whatever reasons, and concluded that he had no well-founded fear of being persecuted for any Convention reason if he were to return to Bangladesh. 48 It follows in my judgment that the fresh grounds of appeal should not be permitted to be raised, and the appeal should be dismissed. The appellant should pay the first respondent the costs of the appeal. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | appeal decision of refugee review tribunal to not grant protection visa affirmed by federal magistrate whether s 424a of the migration act 1958 (cth) enlivened where appellant explained inconsistency between visa application and submissions to tribunal where tribunal referred to explanation in reasons where tribunal did not treat visa application as information under s 424a whether tribunal properly addressed social group claim whether claim to be member of a social group of socially or politically active buddhists arose on the materials before tribunal application for leave to appeal on grounds not raised before federal magistrate where applicant represented before federal magistrate immigration immigration procedure |
Subject to one issue, these claims are yet to be determined. The current proceedings concern that issue, in summary an allegation by HFAT that one or both of the respondents took HFAT's booking records from HFAT's office, and a claim for delivery of those records to HFAT. HFAT has sought relief in respect of this claim in Pt A para 7 of the Application. On 19 May 2009 I ordered that the relief sought by HFAT in Pt A para 7 be the subject of a separate hearing and determination. A broad range of evidence was covered during the course of the hearing. However the only issues for determination in this judgment relate to Pt A para 7 as stated. These issues can be summarised as: The nature of the booking records claimed by HFAT in terms of Pt A para 7 of the Application. Whether Mr Rhys Thomas took those HFAT booking records, and whether Mr Rhys Thomas and/or Mr Troy Thomas have in their possession those records. Whether HFAT is entitled to an order for delivery of those booking records, or any other order. In around March 2004 Ms Cummins and Mr Rhys Thomas decided to commence a business in Broome, Western Australia under the name "Horizontal Falls Adventure Tours" ("the HFAT business"). They decided that the HFAT business would operate tours by aircraft and boat to the natural phenomenon known as Horizontal Falls. Horizontal Falls is characterised by tidal waters flowing between two narrow gorges of the McLarty Range in the Kimberley region of Western Australia. It is a tourist attraction accessed by aircraft and boat from the towns of Derby and Broome in Western Australia. The HFAT business was conducted by Ms Cummins and Mr Rhys Thomas through two companies: HFAT and Kimberley Seaplanes Pty Ltd ("KS"). HFAT was responsible for taking bookings for the HFAT business, and KS owned the assets of the HFAT business including boats, pontoons and a bus. Ms Cummins and Mr Rhys Thomas were equal shareholders of both HFAT and KS, however Ms Cummins was the sole director of HFAT and Mr Rhys Thomas was the sole director of KS. Mr Rhys Thomas (who is an experienced aircraft pilot) occupied the position of Chief Pilot and Operations Manager in the HFAT business, and Ms Cummins was the financial controller of both companies. Mr Troy Thomas is an experienced boat charterer who assisted in the HFAT business as a contract skipper as needed. Ms Cummins left Broome in October 2008 to reside on the Gold Coast in Queensland. Plans were made by the parties to sell the HFAT business however the proposed deal did not eventuate. By late 2008 the financial position of KS had worsened and Ms Cummins applied to the Supreme Court of Queensland for KS to be wound up in insolvency. The reason for the financial collapse of KS was the subject of cross-accusations by the parties, which are not relevant to the issues before me. The Supreme Court of Queensland made an order winding up KS on 6 March 2009. On 11 December 2008 the business name "Horizontal Falls Seaplane Adventures" ("HFSA") was registered in Western Australia by Mr Troy Thomas. The HFSA business also conducts tours to Horizontal Falls by aircraft and boat. Mr Troy Thomas commenced operating the HFSA business in April 2009. It is not in dispute that HFSA is a competitor of HFAT. Mr Rhys Thomas gave evidence that he was not involved in the operation of HFSA, but does contract work for the RH Thomas Trust which owns a seaplane used by HFSA (TS 11 June 2009 p 172 ll 36-47). The booking records which HFAT alleges were removed were booking records made by Ms Kaye Chaloner and, according to Ms Cummins, Ms Shelley Ratcliffe. Ms Chaloner had been employed as a booking agent by the HFAT business since 2006. Ms Ratcliffe also appeared to be an employee of the HFAT business however neither oral nor written evidence was adduced from Ms Ratcliffe for the purposes of the hearing. Ms Chaloner deposed that when a customer booked and paid for a tour, as a usual practice she would send the customer an email confirming the booking and the day of travel (affidavit of Kaye Chaloner affirmed 25 May 2009 para 10). It was usual practice for details of the bookings to be written in a hard copy diary kept at the office, and for Ms Chaloner to also enter the bookings into an Excel spreadsheet (affidavit of Kaye Chaloner affirmed 25 May 2009 para 7 and para 11). Ms Chaloner left HFAT at the end of January 2009, and deposed that she left a manilla folder containing email confirmations of bookings on the desk at the HFAT office in Hangar 5 at Broome Airport (affidavit of Kaye Chaloner affirmed 25 May 2009 para 9). The role of Ms Ratcliffe in the HFAT business, and when that role ended, are not the subject of evidence in these proceedings. Ms Chaloner's replacement at HFAT was Ms Sophie Bishop. Ms Bishop worked for HFAT from offices in Perth including managing bookings by way of telephone and email from 31 January 2009 until mid-April 2009. She then relocated to Broome where she continued with HFAT. Partners of KordaMentha were appointed provisional liquidators of KS on 2 February 2009. Shortly thereafter Mr Simon Harris (an Associate Director of KordaMentha, who was assisting the provisional liquidator) and Mr Rocke, one of the provisional liquidators, visited the KS office --- which was also the HFAT office --- at Hangar 5, Broome Airport. Mr Harris deposed that they took possession of the books and records of KS, and made a list of that material which comprised 15 archive boxes of standard size. The respondents have suggested that the material taken by the provisional liquidators may have included the HFAT bookings, however Mr Harris deposed that to his knowledge this is not correct (affidavit of Simon Harris sworn 4 June 2009 para 7). Ms Bishop gave evidence as to conversations she had with travel agents in Broome in February, March and April 2009, which revealed confusion among travel agents as to whether HFAT and HFSA were the same entity. They will contact you within the week after Australia Day. One reason for this was an email sent by Ms Cummins to Mr Rhys Thomas on 8 January 2009 (exhibit 8R) in which Ms Cummins offered to appoint an administrator to HFAT pursuant to Pt 5.3A of the Corporations Act 2001 (Cth) if Mr Rhys Thomas similarly appointed an administrator to KS. A further complication was that the aircraft utilised by HFAT in conducting tours was owned by a trust associated with the respondents and the aircraft was not available for use by HFAT for the 2009 tourist season. Mr Rhys Thomas had assumed that HFAT would not be able to conduct tours without that aircraft. On or about 18 February 2009 a circular was sent to tour operators at the instigation of Ms Cummins advising them that HFAT and HFSA were not the same entity. In or around April 2009 Ms Cummins arranged for another company to carry HFAT's customers with the result that HFAT continued to offer tours to Horizontal Falls. The lessee of the office space in Hangar 5, Broome Airport used by the HFAT business was actually KS. On 21 April 2009 Mr Paul McSweeney, the manager of commercial services at Broome Airport, emailed Ms Cummins and Mr Rhys Thomas. In a letter attached to his email Mr McSweeney noted that KS was in liquidation and listed items which would be deemed abandoned if they were not collected. The list included furniture and "Assorted files". Mr Rhys Thomas gave evidence that he went to Hangar 5 and let himself in through an open door (TS 22 June 2009 p 38 l 42). The date Mr Rhys Thomas went to the office is not clear, but appears to be on or around 21 April 2009. Mr Rhys Thomas said that he took from the HFAT office at Hangar 5 assorted files which were archives of manifests, flight plans and some houseboat drawings. He took this material to the rubbish dump because the documents only need to be retained, under council regulations, for three months (TS 22 June 2009 p 43 ll 1-14). Mr Rhys Thomas gave evidence that the files were old documents which he saw no point in keeping (TS 22 June 2009 p 43 ll l-19). Ms Cummins deposed that Mr Paul McSweeney telephoned her on 22 April 2009 to inform her that the HFAT office had been broken into and the contents removed. She deposed further that she had reported the matter to the Broome police (affidavit of Mary Cummins sworn 12 May 2009 paras 66-67). Notwithstanding the contact with police, it appears that the police took no action against Mr Rhys Thomas in relation to the removal of chattels from the HFAT office. On 28 April 2009 Ms Chaloner and Ms Bishop had a telephone conversation. Much of what was said is in contention. It is not in dispute however that Ms Chaloner said that she had left a folder containing records for tour bookings on the desk at the HFAT office in Hangar 5. During April and May 2009 Ms Bishop received three telephone calls from customers of HFAT in relation to tour bookings they had made with HFAT but of which HFAT had no record. The relevant facts as deposed by Ms Bishop in her affidavit sworn 12 May 2009 were: Ms Bishop was contacted by Mr Trevor Owen on 28 April 2009. Emails forwarded by Mr Owen to Ms Bishop showed that he had made a booking on 20 October 2008, for a tour with HFAT to be operated on 6 July 2009. On 29 April 2009 at 5.30 am Ms Bishop was telephoned by Ms Fiona Allen, advising that Ms Allen and her partner were in Broome waiting to be collected for their tour to the Horizontal Falls. Ms Bishop had no record of Ms Allen's booking. Ms Allen provided Ms Bishop with a copy of her reservation confirmation which purported to have been sent on behalf of HFAT on 6 November 2008. On 5 May 2009 Ms Bishop was contacted by Mr and Mrs Osler, informing her that they had booked and paid for tours with the applicant for July 2009. Ms Bishop had no record of the bookings to which these customers were referring and no receipts for any payments by them. The law as to mandatory injunctions, and the adequacy of damages as an adequate remedy is irrelevant. There is overwhelming evidence that the booking records existed and were in HFAT's office. There is overwhelming evidence that Mr Rhys Thomas took the booking records. In particular, it is clear that Mr Rhys Thomas and Mr Troy Thomas removed everything they found in the applicant's office except the desk. There is evidence that a booking made by Mr Trevor Owen for a tour with HFAT was not in HFAT's possession. Ms Bishop, an employee of HFAT, deposed that Ms Chaloner had told her that Mr Rhys Thomas had removed all the material in HFAT's office, and that Ms Bishop had summarised her conversation with Ms Chaloner in an email to Ms Chaloner. The fact that neither Ms Chaloner nor the respondents denied the substance of the conversation by return email to either Ms Bishop or Ms Cummins is telling. The liquidators of KS do not have the HFAT booking records. There is no evidence that all of HFAT's missing bookings are contained on computers in the hands of the liquidators or anyone else. Whether the respondents could not or would not wish to benefit from HFAT's bookings is irrelevant. Mr Rhys Thomas acted purely out of spite, to damage the business of HFAT, its reputation and its relationship with its customers. HFAT could not reconstruct the missing bookings by surveying local travel agents because local travel agents were not the sole source of bookings. In any event, such a reconstruction would not derogate from the right of the applicant to the return of its booking records. To decide the application on one of the alternative bases now claimed by HFAT would constitute a breach of the rules of procedural fairness. Given the grave consequences should the Court make an order and Mr Rhys Thomas be unable to comply, a higher standard of proof than the balance of probability is required of the applicant. HFAT is unable to describe with any confidence or particularity the precise nature of what it claims the respondents have taken. There is no evidence that a diary existed for the applicant for 2009, or that, if any 2009 booking records for HFAT existed, they still exist. HFAT has not established an underlying, exclusive right to ownership of the alleged booking records because of the relationship between HFAT, Ms Cummins and Mr Rhys Thomas, and the manner in which the HFAT business was conducted. The case against each of the respondents is entirely based on inference and conjecture. Evidence of Ms Bishop is squarely denied by Ms Chaloner, who is an unbiased witness. The evidence of what documents reside with the liquidator is far from clear, a position which has not been assisted by the failure of HFAT to search the documents or make its own inquiries. There is no suggestion that Troy Thomas took any booking records, indeed HFAT concedes that it has no case against him in respect of the booking records. In written submissions HFAT conceded that there was no basis for an order against Mr Troy Thomas. The onus is on HFAT to prove that the booking records existed, that they were in HFAT's possession, and that they were taken by direct interference perpetrated by Mr Rhys Thomas. This is a civil matter, and the civil standard of proof applies. HFAT must prove its case on the balance of probabilities. Indeed in this case HFAT accepted that it must establish that: It is clear however that in making a determination according to the civil standard the Court is to take into account: (a) the nature of the cause of action or defence; (b) the nature of the subject matter of the proceeding; and (c) the gravity of the matters alleged. The court could enforce such an order in several ways. In considering the application of the civil standard of proof, Dixon J observed in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 , 361-362, in summary, that: In determining whether I am satisfied on the balance of probabilities that HFAT has proven the facts it needs to prove, I take into consideration the matters required by s 140(2) of the Evidence Act as well as Dixon J's comments in Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336. What are the booking records the subject of HFAT's claim? I understand that it is not seriously in dispute that booking records for HFAT existed or that HFAT had booking records. The dispute in this case is as to the composition and nature of the booking records the subject of this claim. HFAT did not conduct regular tours during this period. However tour bookings were able to be taken at this time in respect of tours for the 2009 tourist season (scheduled to begin around April 2009) by employees of the HFAT business, including Ms Chaloner. A number of tours bookings were recorded by Ms Chaloner and (apparently) Ms Shelley Ratcliffe between October 2008 and the end of January 2009 when Ms Chaloner left HFAT. As I have already noted, no evidence was given by Ms Ratcliffe in these proceedings. Bookings were made with HFAT for tours by tour desks around Australia (in particular Broome and the Kimberley Holidays) on behalf of clients and by individuals directly. Bookings were made by email and telephone. Ms Cummins gave evidence that when individuals made bookings directly with HFAT, they were required to make immediate payment in order for their booking to be confirmed (TS 22 June 2009 p 6 ll 31-36). I have already noted Ms Chaloner's evidence that when an individual customer booked and paid for a tour she would send the customer a confirmation email in respect of the booking and the day of travel. Usually, telephone bookings for HFAT tours were recorded in a hard copy diary acquired by the HFAT business, and an Excel spreadsheet on a computer (operated by Ms Chaloner). The relevant diaries were yearly calendar diaries. Both the hard copy diary and the computer with the Excel spreadsheet were kept at the HFAT office, located at Hangar 5, Broome Airport. During the proceedings however HFAT's definition of the booking records narrowed. In HFAT's written submissions the booking records were more specifically identified as: It is also possible that bookings taken between October 2008 and January 2009 were entered into an Excel spreadsheet prepared by Ms Chaloner. Evidence given by Ms Cummins indicates that this was her belief (TS 22 June 2009 p 8 l 33). Further, it is clear that the booking records the subject of HFAT's claim are definable by a time period --- namely they were bookings allegedly taken by Ms Chaloner (and possibly Ms Ratcliffe) while still in the employment of HFAT between approximately October 2008 and the end of January 2009. This is clear from: Ms Cummins' affidavit sworn 12 May 2009 (para 70); and Ms Bishop's affidavit sworn 12 May 2009 (para 28). The only sustainable claim by HFAT in respect of booking records for the period between October 2008 and January 2009 is that the booking records were papers in a manilla folder which Ms Chaloner left on the desk in HFAT's office at Hangar 5, Broome Airport, in late January 2009. I form this view for the following reasons. I reject HFAT's submissions that she was an unsatisfactory witness, "evasive" or "quick to follow the party line". It is clear that Ms Chaloner was initially very reluctant to give evidence in the proceedings in circumstances: Indeed, Ms Chaloner produced evidence that she was suffering severe depression as well as anxiety attacks arising from her concerns about giving evidence in the proceedings. I reject the applicant's submission that her medical condition was "pure poppycock". However as my ruling earlier in these proceedings demonstrated ( Horizontal Falls Adventure Tours Pty Ltd (ACN 108 455 410) v Thomas [2009] FCA 639) I was of the view that, despite these medical conditions, Ms Chaloner would be able to answer questions under cross-examination, and indeed she did so in a direct, detailed and honest manner. Further, I accept Ms Chaloner's evidence as to the mode of taking bookings between October 2008 and January 2009 because it was, and always had been, her job to take bookings for the HFAT business. I accept Ms Chaloner's evidence that she did not purchase a 2009 diary following instructions from Ms Cummins not to do so, and her evidence that she had not entered bookings into an Excel spreadsheet for forward bookings for 2009. Indeed, in light of the discussions in 2008 between Ms Cummins and Mr Rhys Thomas concerning, among other things, the possible sale of the HFAT business and later the appointment of administrators to both HFAT and KS, it is logical that Ms Cummins would have instructed Ms Chaloner not to purchase a hard copy diary for 2009. Objectively, Ms Cummins had no personal knowledge of the HFAT bookings system between October 2008 and January 2009, Indeed, I note that Ms Cummins apparently left Broome in October 2008 at the end of the tourist season, after which regular examination of booking records for organising tours or any other purpose was presumably not necessary by her or anyone else. (I note for example evidence of Mr Rhys Thomas (TS 22 June 2009 p 57) that he consulted the diaries in order to identify the number of passengers travelling on the tours. ) At this time of the year, it appears that the only persons dealing with booking records would have been staff of the HFAT business taking forward bookings for 2009. From Ms Cummins' perspective, the existence of a hard copy diary for 2009 into which Kaye Chaloner allegedly entered bookings was only speculation based on previous practice. The same observation may be made in respect of alleged entry of bookings data by Ms Chaloner into an Excel spreadsheet for that period. Finally, I consider that Ms Cummins' evidence needs to be treated with caution because, in my view, her beliefs are significantly influenced by her personal feelings towards the respondents in the wake of the breakdown of the personal and business relationships between her and Mr Rhys Thomas, and the establishment of a new competitor in the form of HFSA. Ms Wade was an administrative assistant who worked for HFAT from July 2007 until November 2008 (affidavit of Barbara Wade sworn 2 June 2009 para 4). However it was clear from Ms Wade's evidence that during 2008 she was involved less in the filing and invoicing for HFAT, and more in performing tasks outside the HFAT office such as ensuring that the houseboat used by the business was stocked with food and drink for the overnight tourists (affidavit of Barbara Wade sworn 2 June 2009 para 5). So far as is relevant to the existence of booking records, Ms Wade could tell the Court only that she was aware that bookings were taken past the time when she left the HFAT business (TS 11 June 2009 p 119). Ms Wade's evidence is of little assistance in resolving this issue. In summary, I accept Ms Chaloner's description of the booking records as being confined to papers in a manilla folder recording a number of bookings taken between October 2008 and the end of January 2009. I accept that Ms Chaloner left the manilla folder containing this information on the desk at the HFAT office at the end of January 2009. In my view Mr Rhys Thomas did not take the HFAT booking records. I do not consider that HFAT is entitled to an order as sought in Pt A para 7 of the Application. I have formed this view for the following reasons. During the proceedings HFAT sought to make much of the conversation between Ms Sophie Bishop and Ms Kaye Chaloner to which Ms Bishop referred in her affidavit, and in particular to the alleged agreement by Ms Chaloner to the notion that Mr Rhys Thomas had "broken into" the HFAT office on 21 April 2009. The clear tenor of HFAT's contentions in this regard was that Mr Rhys Thomas' actions in entering the premises were tinged with impropriety and, to quote a word much used by HFAT in its submissions, spite. However I accept Mr Rhys Thomas' evidence that he quite properly went to Hangar 5 in response to an email from Mr McSweeney to both Ms Cummins and Mr Rhys Thomas. It was not in dispute that the lessee of the office at Hangar 5 was actually KS, which was in liquidation by 21 April 2009, and of which, significantly, Mr Rhys Thomas was the sole director. Although Mr Rhys Thomas gave evidence that the ownership of the chattels he removed from the HFAT office, which were worth less than $1,000, was to be settled between himself and Ms Cummins in the Family Court (TS 22 June 2009 p 48 ll 7-10) there is no evidence before the Court that Mr Rhys Thomas required Ms Cummins' permission to access the office or remove the chattels there. It is unfortunate --- and perhaps surprising --- that Mr McSweeney was not called as a witness in these proceedings, however I do not consider this omission undermines Mr Rhys Thomas' evidence. I consider Mr Rhys Thomas' evidence as to the reason he went to the HFAT office --- namely to remove furniture and other material there following the request by Mr McSweeney --- reasonable and acceptable. I attach no weight to the evidence of Ms Sophie Bishop (affidavit of Sophie Bishop sworn 12 May 2009 para 30) as to the "break-in" by Mr Rhys Thomas and Ms Chaloner's alleged agreement as to that occurrence. At best, even if such a conversation occurred, I consider it would be little more than idle and sensational gossip between two administrative staff who lacked first-hand knowledge of relevant events. I attach no weight to the failure of Ms Chaloner, Mr Rhys Thomas or Mr Troy Thomas to respond to allegations of Ms Bishop in her email of 29 April 2009 to Ms Chaloner, or to allegations of Ms Cummins in her email of 29 April 2009 to Mr Rhys Thomas. In its submissions, HFAT emphasised the supposed importance of both respondents failing to refute statements of both Ms Cummins and Ms Bishop concerning Mr Rhys Thomas and his alleged removal of booking records from the HFAT premises. However in relation to Mr Troy Thomas, I consider that there was no positive obligation on him to deny allegations in relation to his father made by a bookings agent employed by HFAT. I draw no inference from the contents (or lack thereof) of Mr Troy Thomas' email to Ms Bishop of 29 April 2009. Given the clearly poor relations between Ms Cummins on the one hand, and the respondents on the other, which were at the stage where it appears that both sides had engaged lawyers, it is not surprising that Mr Troy Thomas should refrain from engaging in extensive email contact with HFAT employees, and understandable that he would not necessarily respond to allegations in such emails. I take a similar view in relation to the "failure" of Mr Rhys Thomas to respond to Ms Cummins' email of 29 April 2009 in which Ms Cummins similarly alleged removal of HFAT booking records by Mr Rhys Thomas and the alleged offer of those booking records to Ms Chaloner. I note evidence of Mr Rhys Thomas given during cross-examination in which he said, in summary, that he received many similar emails from Ms Cummins and chose not to respond to them. I consider this evidence credible: TS 11 June 2009 p 180 ll 13-39 and, in the circumstances, draw no inference from the lack of email response by Mr Rhys Thomas to Ms Cummins in respect of his alleged conduct. I do not accept this evidence because: Ms Chaloner denied that she had ever so informed Ms Bishop (affidavit of Kaye Chaloner affirmed 25 May 2009 para 5.2). On balance, I consider it likely that Ms Chaloner's version of the conversation between herself and Ms Bishop is accurate, if only because there is no obvious reason why, even if Mr Rhys Thomas had "offered" the HFAT bookings to Ms Chaloner, Ms Chaloner would spontaneously inform Ms Bishop, a person who was a stranger and recently employed by HFAT which was a competitor to Ms Chaloner's new employer HFSA. In light of the bookings system at HFAT an "offer" of confirmed tour bookings by customers with HFAT by Mr Rhys Thomas to Ms Chaloner --- presumably for the HFSA business --- makes little sense. It was clear from the evidence that, as a general practice, individuals who booked a tour with HFAT were required to pay for the tour before the HFAT booking agent confirmed the booking. It follows that any individuals who had booked with HFAT had already paid for the relevant tour. The financial (or other) benefit to HFSA from "poaching" such customers when HFSA could not expect payment from them is not obvious. In my view Mr Rhys Thomas' "spite" as alleged by HFAT would not counter the financial disincentive to HFSA in relation to such an offer. Evidence to this effect is given by Mr Troy Thomas in his affidavit affirmed 19 May 2009 para 60, and I accept this evidence. From Ms Bishop's evidence it appears that there were only three tour bookings with HFAT, involving six individuals, which were made during the period October 2008-January 2009, but for which HFAT did not have records. There is conflicting evidence between Ms Cummins and Ms Bishop on the one hand, and Mr Rhys Thomas, Mr Troy Thomas and Ms Chaloner on the other, as to the length of time in advance of a tour customers made bookings. (The evidence of Ms Cummins and Ms Bishop was that it was common for tour bookings to be made considerably in advance of a tour, whereas the evidence of Mr Rhys Thomas, Mr Troy Thomas and Ms Chaloner was that it was more common for bookings to be made only a few days in advance of a tour. ) On the basis that, by the last date of the hearing in June 2009, it appears that Ms Bishop had been contacted in respect of only three unrecorded bookings for tours with HFAT, it is difficult to avoid the conclusion that only three advance bookings for HFAT tours for six individuals had been made during the October 2008-January 2009 period which were unaccounted for in HFAT records. It is possible that bookings had been made with HFAT by travel agents in Broome or elsewhere in Australia during that period which were unaccounted for, but no evidence was produced as to this, nor, as the respondents submitted, did HFAT appear to make any effort to inquire as to whether any travel agents had made bookings with HFAT on behalf of clients during the period October 2008-January 2009. The possibility of such bookings by travel agents is mere speculation, compared with the fact that apparently only three bookings had been made by individuals with HFAT during the same period which were unaccounted for. The end result is that the "list of bookings" to which Ms Bishop referred in her affidavit at para 30, and which Mr Rhys Thomas was alleged to have offered Ms Chaloner, appears illusory. It appears that the office of HFAT was part of an open plan in Hangar 5, and not separated from the remainder of Hangar 5 by, for example, a locked door. Mr Rhys Thomas gave evidence that he had simply walked through an open door into Hangar 5 to remove furniture and other chattels on or around 21 April 2009. The manilla folder containing booking records was left by Ms Chaloner on a desk in the HFAT office and, according to the submissions of HFAT, remained on that desk for almost three months until it was allegedly taken by Mr Rhys Thomas on or around 21 April 2009. The incongruity of such apparently important HFAT booking records being left unattended by Ms Cummins or Ms Bishop for such a long period of time is heightened by the fact that HFAT was not the only entity with an office in Hangar 5. It is not in dispute that a business called Skipper Aviation subleased part of the area, and that, according to unchallenged evidence of Mr Rhys Thomas, staff of Skipper Aviation accessing their office from the nearby street had to walk through the HFAT office to reach it (TS 22 June 2009 p 56 ll 16-31). Indeed there is evidence before the Court that persons with access to the HFAT office after the end of January included: Unfortunately, as the respondents observe in their written submissions, HFAT lead no evidence of any inquiries made of the Skipper Aviation business or its employees in respect of removal of HFAT material. Accordingly it appears that third parties including possibly members of the public had access to Hangar 5 --- and the HFAT office --- between the end of January 2009 and 21 April 2009. It is not inconceivable that the HFAT booking records could have been removed by a third party. Mr Simon Harris of KordaMentha deposed that, to his knowledge, the liquidators did not take possession of the HFAT booking records (affidavit of Simon Harris sworn 4 June 2009 para 7). However during cross-examination by Mr Telford for the respondents it became clear that details of "Miscellaneous Papers" taken by the liquidators from the HFAT office and to which Mr Harris referred in his affidavit could not be explained by Mr Harris (see for example TS 11 June 2009 pp 23-24). Mr Harris' evidence was that one of his administrative staff, who did not give evidence in these proceedings, had completed listing of the records taken by liquidators (TS 11 June 2009 p 20 ll 36-37). While on balance it is unlikely that experienced liquidators would remove material other than that belonging to the corporation the subject of the liquidation, in the circumstances of this case I consider it possible that the liquidators of KS may have removed the manilla folder containing the booking records and that this material could be in, for example, the "Miscellaneous Papers" retained by the liquidators. I take this view because: Accordingly I am not satisfied that the liquidators of KS did not remove the manilla folder containing the booking records in their general removal of KS documentation from Hangar 5. The liquidator had previously gone to the offices and removed all books, paperwork etc, I witnessed approximately 300 kilograms worth of documents being taken by the liquidator back to Perth and also the computers. There was no list of bookings at the office when I relocated the items in or about April 2009. I hadn't been in the office for two months. When I went into the office on 21 April all the desk tops were all clear, and if there were documents, lists of bookings or whatever, I didn't see them. Mr Troy Thomas gave evidence at the hearing that he had assisted Mr Rhys Thomas load a number of old desks from the HFAT office on to a trailer, that Mr Rhys Thomas had taken some of the desks to the rubbish dump the following day, and that Mr Troy Thomas could not remember if there were any documents at the HFAT office (TS 11 June 2009 p 60 ll 18-26). In written submissions HFAT attacked the credibility of the evidence of both respondents. HFAT reserved particular criticism for Mr Rhys Thomas, and submitted in summary that none of his evidence should be accepted without corroboration. HFAT also submitted that evidence of Mr Troy Thomas should not be accepted. It is, no doubt, in HFAT's interests to attempt to completely discredit the evidence of the respondents. However as is commonly the case, the position is not quite so unequivocal as HFAT has urged. In my view evidence of Mr Rhys Thomas needs to be treated with caution because his personal feelings, in particular anger at what he clearly perceives as Ms Cummins' conduct, affected the tone of his evidence. (In making such an observation however I have already noted similar reservations in relation to Ms Cummins' evidence. ) However I note that Mr Rhys Thomas has been consistent, both in his written and oral evidence, in his denial of removing the HFAT booking records from the HFAT office. During cross-examination he steadfastly maintained that position. Further, I do not accept HFAT's attack on Mr Troy Thomas' credit as legitimate. I considered Mr Troy Thomas a satisfactory witness, who endeavoured to be of assistance to the Court. The alleged "pre-conceived party line" in Mr Troy Thomas' evidence as suggested by HFAT was not explained by HFAT. The claim by HFAT that his evidence ought not to be accepted because "he has obviously copied the Applicant's website" raises issues which are both irrelevant in the context of these proceedings and indeed remain unresolved for the purposes of the substantive litigation. I also consider that HFAT's claim as to inconsistencies in Mr Troy Thomas' evidence is in fact based on irrelevant events and absurd assumptions. So, for example, I have already given my views in relation to Mr Troy Thomas' email to Ms Bishop of 29 April 2009. The fact that Mr Troy Thomas did not take positive steps to deny Ms Bishop's allegations against Mr Rhys Thomas does not, in my view, undermine Mr Troy Thomas' credibility as a witness. I consider that Mr Troy Thomas was credible when he gave evidence that he took no notice as to whether there were papers among the goods taken by Mr Rhys Thomas from Hangar 5, Broome Airport on 21 April 2009 (TS 11 June 2009 p 60 ll 14-22). Further, notwithstanding the fact that HFSA (which was in competition with HFAT) was operated by Mr Troy Thomas, it was clear that Mr Rhys Thomas was supportive of Mr Troy Thomas in that business. An example of this support was the letter to the Broome travel agents announcing the establishment of HFSA. However in determining an issue on the balance of probabilities, as Dixon J observed in Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences (at 362). As I have already observed, potentially many other people had an opportunity over several months to remove the booking records --- perhaps inadvertently, perhaps deliberately. There is absolutely no direct evidence before the Court that Mr Rhys Thomas took the booking records from the HFAT office in Hangar 5 at Broome Airport, only hearsay from Ms Bishop as to alleged comments by Ms Chaloner, which Ms Chaloner denies having made. The only basis on which I could find that Mr Rhys Thomas had taken the booking records would be on the grounds of speculation, conjecture, and inference. I am not persuaded on the balance of probabilities, particularly taking into account the material before the Court which I have already discussed, the seriousness of HFAT's allegations, and the gravity of the consequences should Mr Rhys Thomas fail to (or be unable to) comply with an order as sought by HFAT, that Mr Rhys Thomas removed the relevant booking records. It follows that the Application against him so far as concerns Pt A para 7 should be dismissed. While HFAT conceded that there was no basis for an order against Mr Troy Thomas in relation to the relief sought by HFAT pursuant to Pt A para 7 of the Application, HFAT also submitted that: In my view however there is no basis for adjourning the case against Mr Troy Thomas, because: Accordingly, it follows that the appropriate order is to dismiss HFAT's claim against Mr Troy Thomas so far as concerns Pt A para 7 of the Application. First, in light of my factual findings it is not strictly necessary for me to resolve the legal question whether HFAT was entitled, in written submissions filed after judgment in the proceedings had been reserved, to claim that it sought orders for the return of the booking records: In its Outline of Submissions, somewhat surprisingly, HFAT submitted that the law as to mandatory injunctions and the adequacy of damages as an adequate remedy was irrelevant (para 12). In its Outline of Submissions in Reply, the respondents protested that to decide the application on one or more of the grounds raised by HFAT in its written submissions would, in the circumstances of the way in which HFAT conducted its case, constitute procedural unfairness as described by the High Court in Kioa v West [1985] HCA 81 ; (1984) 159 CLR 550 at 582-593. In light of the parties' detailed submissions with respect to possible grounds for decision in this case, I make the following observations. I consider that the respondents' submissions in this respect have merit. Nowhere in the application does HFAT plead the tort of detinue, the Income Tax Assessment Act , the Corporations Act or specific restitution. Not once during the course of the hearing were any of these causes of action raised by the solicitor for HFAT. The proceedings were not conducted on the basis that the respondents were required to meet a case in detinue, specific restitution, or based on the Income Tax Assessment Act or the Corporations Act . In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities: see, for example, Browne v Dunn (1893) 6 R 67 at 76; Mount Oxide Mines (1916) 22 CLR at 517-518. It does not automatically follow that a claim for an order requiring the respondents to deliver chattels to the applicant introduced those causes of action to be met by the respondents --- indeed the pleadings equally support a claim for a mandatory injunction, or an order pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) ( Humphries v Halifax Vogel Group Proprietary Limited [2008] FCA 569 ; (2008) 76 IPR 144). Accordingly, even had I made factual findings in favour of HFAT on the issue of whether Mr Rhys Thomas had taken the HFAT booking records, I consider that a decision on the previously undisclosed bases submitted by HFAT after judgment had been reserved would be procedurally unfair. Second, I make a general observation about the HFAT submissions prepared by its solicitor. Unfortunately, these submissions are characterised by repeated use of inflammatory and grandiloquent expressions such as "shocking", "pure poppycock", "dishonourable", "startling", "spite", "ridiculous fancy" and "snipe from the shadows". I note that overuse of such language in written submissions for consideration by the Court is, at best, unpersuasive and unhelpful to the judge in the task of objectively evaluating material. Finally, at the end of the hearing it was envisaged that the parties be permitted to prepare submissions as to costs with the benefit of the reasons. I will now make directions for filing and service of those submissions. I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | applicant company conducts tours in remote western australia applicant part of tourism business jointly operated by applicant's sole director and the second respondent applicant seeks order for delivery of booking records allegedly taken by respondents whether applicant entitled to relief sought standard of proof causes of action raised by applicant after judgment reserved practice and procedure |
Mr Soh is a citizen and resident of Korea who commenced proceedings for damages against the Commonwealth of Australia and the State of New South Wales in 2003 for time which he alleges was wrongly spent in immigration detention and in New South Wales Correctional facilities. On 18 April 2008 this application by Mr Soh was dismissed by Madgwick J: see Soh v Commonwealth of Australia [2008] FCA 520 , where his Honour has set out the history of the application and the issues involved. There is no need to repeat those matters in these reasons. Mr Soh then filed a Notice of Appeal on 15 May 2008 from the orders of Madgwick J and on 28 May 2008 sought an extension of time to file the Notice of Appeal. The Commonwealth then filed an application for an order requiring security for costs from Mr Soh on the ground that he was (i) impecunious, (ii) resides in Korea, (iii) has no assets in Australia, and (iv) his appeal had no real prospect of success. The Commonwealth pointed out in submissions before Moore J that it had already spent in excess of $210,000 in successfully defending the claim by Mr Soh, the costs of which had not been recovered, and it was estimated the predicted costs of defending the appeal would be $30,000. This amount was the security ordered by Moore J on 14 October 2008, to be paid on or before 14 December 2008, and in default of which the appeal would be dismissed. It is important to note that the decision of Moore J in relation to security for costs was an interlocutory decision and that consequently leave must be obtained, and also that the current application was out of time so that an extension of time is required. Leave will normally be granted if it can be shown that the decision below is attended by sufficient doubt to warrant reconsideration or where substantial injustice would be caused if leave is refused: see Décor Corp Pty Ltd v Dart Industries Pty Ltd [1991] FCA 655 ; (1991) 33 FCR 397 at 398-400. In addition, the order in relation to security for costs was a discretionary judgment which on accepted principles will not be varied unless it is shown that exercise of that discretion was miscarried for specific reasons, or more generally that the decision is outside the limits of what could be considered to be sound discretionary judgment: see House v R [1936] HCA 40 ; (1936) 55 CLR 499 at 504-5. The Court in that case identified the general types of error which must be shown, namely; that the primary Judge acted upon a wrong principle, took account of extraneous or irrelevant matters, was mistaken as to material facts, or where some material consideration was not taken into account. In addition, the application relating to an appeal on questions of practice and procedure enlivens the principles in Adam P Brown Male Fashions Pty Ltd v Phillip Morris Incorporated [1981] HCA 39 ; (1981) 148 CLR 170 , namely that in such a case an appellate court will exercise particular caution in reviewing challenged decisions. These principles must be applied when considering the application in this case. The Commonwealth submits that in making a direction as to security for costs Moore J has exercised and exhausted the appellate jurisdiction of the Federal Court so that a single Judge has no jurisdiction to hear the present application. The Commonwealth submits that the effect of the self-executing order made by Moore J on 14 October 2008 to require security for costs and dismissing the matter in the event of non-compliance is that, in the event of security not being provided by 14 December, the matter stands finally dismissed pursuant to s 25(2B)(bb)(i) of the Federal Court of Australia Act 1976 (Cth) (the Act) which provides that a single Judge or a Full Court may make an order that an appeal to the Court be dismissed for failure to comply with a direction of the Court. In making his orders of 14 October 2008, Moore J, it is submitted, exhausted the appellate jurisdiction of the Court and therefore I have no power or jurisdiction to grant an extension or leave. The matter came before me for hearing on 10 December 2008, which was four days before the last day for providing for security for costs. The position is that at the date of these reasons no security has been provided and no application has been made for an order to prevent his Honour's order coming into effect. On the question of jurisdiction, it is submitted on behalf of Mr Soh that the way in which his Honour's order of 14 October 2008 operated was that first there had to be non-compliance with the direction, and that if the matter were to be dismissed it was necessary for the Commonwealth to bring the matter back before the Court and seek a specific order based on that failure and only after establishing non-compliance. In other words, the submission is that the Court does not have power to make a self-executing order which does not require a fresh exercise of the judicial function before the proceeding be dismissed. There is no doubt that the Court has power to make contingent self-executing orders that in the event of non-compliance the matter stands dismissed. It is not unusual for courts to make such conditional orders which come into effect on the occurrence of a contingency. However, the authorities indicate that the power of the Court to extend time under O 3 r 3(2) of the Federal Court Rules (the Rules) may be exercised before or after the time has expired in relation to self-executing orders: see Bourke v State Bank of New South Wales [1995] FCA 139 (per Beaumont, Einfeld and Beasley JJ) at [7]-[11]. In FAI General Insurance Co Ltd v Southern Cross Exploration NL [1988] HCA 13 ; (1988) 165 CLR 268 at 289, Gaudron J observed that the making of a conditional order of dismissal necessitates the exercise of the further judicial function of determining that the condition was satisfied at the relevant time: see also Sammy Russo Meat Supplies Ltd v Australian Safeway Stores Pty Ltd [1999] FCA 1381 at [13] . Having regard to these authorities I consider that the jurisdiction of the Court has not been exhausted and that there is power to extend time and grant leave. When taking into account whether to grant an extension of time the Court will have regard to the length of the delay in bringing the proceedings and the explanation for it together with the prospects of success of the appeal. In this case the delay is not great and there was an explanation as to the need for the extension of time based on an error on the part of Counsel. If there was any sufficient doubt as to the correctness of his Honour's decision in this matter I would not dismiss the application for extension solely on the basis of the period of delay in initiating the application for an extension. Applying the principles set out above I am not persuaded that on the questions of security for costs the decision is attended with sufficient doubt to warrant the granting of leave for appeal or to extend time. Nor am I persuaded that any injustice would be suffered if leave to appeal or an extension of time were not granted. The reasons given by his Honour and the circumstances adverted to by him in the exercise of his broad discretion on this question of practice and procedure do not indicate or disclose any error of principle, fact or consideration on his part. The reasoning of Moore J in his judgment of 14 October 2008 shows that his Honour applied s 56 of the Act and O 28 of the Rules, and the relevant general principles relating to security for costs as formulated in Equity Access Limited v Westpac Banking Corporation (1989) ATPR 40-972 at 50, 635, as well as the observations of Spender J in Tait v Bindal People [2002] FCA 322 at [3] - [4] . In particular, Moore J noted that the appellant was outside the jurisdiction with no assets in Australia and that he was clearly impecunious. I also agree with his Honour's conclusion that there was no sufficient prospects of success in this matter on the substantive claim for damages, and am satisfied that no error has been pointed to in relation to his Honour's reasoning in relation to the prospects of success on this matter Accordingly, for the above reasons I dismiss the present application with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | application for extension of time and leave to appeal orders for security for costs and for dismissal of the proceedings contingent on non-compliance, in accordance with s25(2b)(bb)(i) of the federal court of australia act 1976 what conditions must be satisfied in order for leave to be granted whether a contingent self-executing order exhausts the appellate jurisdiction of the court the decision is that the court has jurisdiction to extend time and grant leave where the requisite conditions are made out practice and procedure practice and procedure |
His appeal is from a judgment of the Federal Magistrates Court dismissing an application for judicial review of a decision of the Refugee Review Tribunal ("the Tribunal"). 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. Prior to departing the country, the appellant was a sub-inspector of police who had joined the police force in 1991. He was sent to the town of Sindhupalchak for three months in 1998 as the officer commanding 17 police officers stationed there. He was involved in a number of armed confrontations with local Maoists, during one of which his men injured and, it seems, killed a number of Maoist insurgents. Four insurgents were captured. Despite a number of death threats from unidentified Maoists, the appellant handed the detainees to the District Police Office for further action before he returned to Kathmandu. They were each imprisoned and were still in prison at the time of the Tribunal hearing. In 2005 the appellant was ordered to return to the posting in Sindhupalchak. During the intervening period, when he had been posted to other locations, he received death threats, in phone calls, from Maoists from Sindhupalchak. These threats were expressly linked to the injuries, deaths and imprisonment of their fellow Maoists during and after the 1998 encounter. They were tied to demands for the release of those imprisoned. The threats began to take an emotional toll on the appellant. The Police Department sent him to join the Dili Police, in East Timor, under United Nations command, as a means of providing him some relief from these threats and their adverse affect upon his mental health. Insurgent activity in the area of Sindhupalchak had increased considerably since his prior posting. The Police Department refused to rescind his posting. Because of his fears of revenge by the Maoists, he decided to absent himself from the police force and seek asylum in Australia. He said that if he were to return to Nepal, he would be arrested for failing to take up his assigned post. He said that the Nepalese police were searching for him and had advised his wife that they would arrest him as soon as they found him. It made no express finding concerning the appellant's claims that during the armed confrontation which led to those arrests, some of the Maoists had been injured and killed. There was however no express rejection of this evidence. The Tribunal accepted that Nepalese police officers could be considered to be members of a class of persons who possess a uniting feature or attribute, and that persons in that class are cognisable as a particular social group: Applicant S v MIMA [2004] HCA 25 ; (2004) 206 ALR 242 at [69] . However, it was not satisfied that there was a real chance that an essential or significant reason for persecution directed towards the appellant was because he was a member of the Nepalese police force or by reason of his imputed political opinion. This was, the Tribunal found, because the sole or dominant motive for the Maoists' targeting of the appellant was the satisfaction of a personal grudge against him and implicitly therefore not by reason of his imputed political opinion. (b) Whether in light of all the facts and evidence that the Tribunal did accept or did not reject, the appellant had a well-founded fear of persecution for a Convention reason. (c) Whether, applying common sense to all the facts of the particular case, the appellant had a well-founded fear of persecution for a Convention reason. The Tribunal committed jurisdictional error in taking an irrelevant consideration into account that being that officers of the state, charged with protecting the state and its people are outside the protection of the Refugees Convention. The Tribunal committed jurisdictional error in its consideration of the issue of state protection in that it failed to consider how effective such protection may be. The Court below held that the first and second grounds were not made out although the third ground was made out. However, the Court refused relief in its discretion based on the finding that the earlier findings regarding the absence of Convention nexus were independent of the findings in respect to state protection and otherwise sustained the decision. There is no such dichotomy. That case concerned a Sikh of Indian nationality who entered Australia and applied for a protection visa. His application was refused. On an application for review, the Administrative Appeals Tribunal concluded that the applicant was excluded from protection by virtue of Art 1F(b) of the Convention because he had been implicated in serious non-political crimes in India. The applicant gave evidence that he had participated as a member of a political organisation in the killing of a police officer by supplying information and intelligence about the officer's movements to facilitate his killing by other members of the organisation. The Tribunal considered that the crime was non-political because it had been committed by the applicant as an act of revenge or retribution for the torture of a member of the organisation. On appeal, the Full Court held that the Tribunal had erred in law in determining that the suspected crimes were "non-political". It concluded that the Tribunal had proceeded from an artificial antithesis between political action and revenge. That finding was upheld by the majority in the High Court, (Gleeson CJ, with Kirby and Gaudron JJ). In some respects, Singh is analogous to the present matter. Like Singh, on one interpretation, "there was no real suggestion of private purposes or of a personal motivation" on the part of the appellant in his conflict with Maoists in 1998: Singh at [138]. In Singh, the issue was how to characterise whether a crime that targeted a police officer for reasons of revenge was personal or political. In the present case, there is an issue as to how to characterise persecution that targets a police officer for reasons of revenge: personal or political. For the appellant, if the motivation for the persecution was political, and not based on a private grudge, then there is a strong argument that he was targeted for reasons of his actual or imputed political opinion, or for reasons of his membership of a particular social group under Art 1A(2) of the Convention. The crucial link between the two cases is the analysis of motive. In Singh , analysis of motive (including revenge, and the political objectives of an organisation) was essential in characterising a crime. In the present matter, analysis of motive is key, as Art 1A(2) of the Convention requires persecution "for reasons of race, religion, nationality, membership of a particular social group or political opinion". The Federal Magistrate sought to distinguish Singh on the grounds that it concerned perpetrators of "serious non-political crimes" under Art 1F(b) of the Convention. The High Court was not addressing the notion " for reasons of " in the context of Art 1A(2). The question of motive, objectively viewed, should be considered against all the relevant circumstances. These will include, in this context, the objectives and methods of the Maoist insurgents as an organisation: Singh at [22], [46]-[47] and [141]. The Tribunal did not do this. At first blush it might be thought that the Tribunal specifically considered the relevant law, and instructed itself that "revenge is not the antithesis of political struggle, it is one of the most common features": see Singh at [18]. True it was that the Maoists threatened revenge against the appellant as an individual but it was in the context of the longstanding armed struggle between the Maoist insurgents and the State of Nepal. The police force was an agency of the State. The deaths, injuries and subsequent imprisonment of insurgents were the result of a fire fight initiated by a group of Maoists against a group of police officers commanded by the appellant. None of the insurgents was known to the appellant and there is no evidence, apart from his position as the officer in command at the time of the fire fight, that he was known to them. The death threats made against him arose out of that armed clash and its aftermath. Indeed the threats were accompanied by demands that he arrange for the release of the four imprisoned insurgents. Counsel for the first respondent conceded that there was no evidence to warrant a conclusion that the appellant was threatened for reasons of personal animus or private retribution. On its face it is difficult, with respect, to see how these threats could, in the circumstances, be characterised as the result of a personal grudge held against the appellant. Apart from other considerations the threats carried with them a demand for the release of the imprisoned Maoists. Counsel for the first respondent, did not identify any basis in the evidence for such a finding. No rationale exists beyond the fact that the appellant acknowledged in evidence that his fear was related to possible revenge by Maoists. Two things immediately may be said about that. First, the appellant's view of the motives of the Maoists who made the threats could hardly be determinative. Ultimately, it was no more than a matter of inference on his part. The actual motive may not have been revenge. In any event as is obvious and as was conceded by counsel for the first respondent revenge could be politically motivated . Second the Tribunal, in its reasons, in fact noted that the appellant feared revenge from the Maoists "... because of his involvement with (the Maoists) as a police officer in 1998" and "for reasons of his having been responsible for the arrest (and possible mistreatment) of a number of their colleagues after the abovementioned 1998 incident". The Tribunal evidently accepted this explanation. Accordingly the Tribunal itself linked the threat back to what had occurred in 1998. The Tribunal, in its reasons was prepared to accept that the appellant may be targeted in Sindhupalchok by Maoists because he had been responsible for the arrest and possible mistreatment of a number of their colleagues after the abovementioned 1998 incident. However it seems, in the absence of any other relevant evidence that the Tribunal concluded, on the basis of the appellant's evidence, that the motive of revenge against him as an individual must necessarily be characterised as 'personal'. 'Revenge', in this case, apparently, inevitably equated to a 'personal grudge'. It was unreasonable on the evidence before it for the Tribunal to conclude that the motive of revenge, if indeed that is what it was, was equivalent to a personal grudge. The Tribunal, as the first respondent correctly says, considered whether the feared persecution of the appellant was for reason of his political opinion or membership of a particular social group. It acknowledged that in appropriate circumstances Nepalese police officers may invoke refugee protection obligations. However, the first respondent submits that there was insufficient evidence to satisfy the Tribunal that the motivations were Convention based. There was, the first respondent contends, no direct evidence before the Tribunal going to the motivations of the Maoists. These submissions merely highlight the error of the Tribunal and in turn the Court below. The appellant's oral testimony was that the Maoists were motivated by revenge for the events of 1998. This evidence alone is said to justify the relevant finding of the Tribunal that the revenge was of a personal and not political nature. I do not accept this last submission. It is the case however that there was a deficit of relevant evidence before the Tribunal on these questions. ... there was no claim by the applicant that he was or could be perceived as having engaged in politically significant acts. There was no direct evidence as to the motivations of the Maoists vis-à-vis the applicant for the Tribunal to consider, other than the applicant's testimony that the Maoists were motivated by "revenge" for the events of 1998 . In particular, there was an absence of evidence that compelled an inquiry as to whether the Maoists in question wanted to harm the applicant because he was a policeman, an agent of the state, to whom a political opinion of ideological opposition to the Maoists may be imputed. First, it accords with my own view that the Tribunal's conclusion that the Maoists were motivated by a personal grudge against the appellant was based solely on the appellant's evidence that the motive was revenge for his involvement in the events of 1998. However, that evidence poses but does not answer the question: was the threatened revenge, and the asserted fear of persecution generated by it, by reason of the appellant's membership of the Nepalese police force and/or as a result of actual or imputed political opinion. To admit that revenge was likely to have been the motive does not amount to a concession that the motivation was for the satisfaction of a personal grudge against the appellant. Second, the analysis actually highlights the failure of the Tribunal to consider the methods and objectives of Maoists on the significant question of motive: cf Singh at 546 [22] per Gleeson CJ; at 552 [47] per Gaudron J; at 578-579 [141] per Kirby J. There is no specific consideration in the decision record of the methods used by the Maoists or whether targeting police officers were part of their accepted modus operandi . The Tribunal did not make findings as to whether the Maoists' objective of freeing their imprisoned comrades was consistent with threatening or killing the appellant. The proper characterisation of revenge will depend on the evidence as to the activities of the Maoists and their aims and attitudes toward the State of Nepal involving, in this case, the police force as one of its agencies. That genre of evidence was all but absent in this case. The finding of the Tribunal that the sole or predominant reason for his being targeted by the Maoists was the satisfaction of a personal grudge against him was, so submits the first respondent, a finding of fact which cannot be reviewed: Peiris v Minister for Immigration and Multicultural Affairs (1999) 58 ALD 413 at [18]-[23]; Buultjens v Minister for Immigration & Multicultural Affairs [2001] FCA 1058 at [12] and [13]. The first respondent further submits that the Court should not too readily find error in such a finding of non-satisfaction: NAAH of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 354 at [27] ; NATC v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 52 at [27] . To do so, it submits, would involve the Court transgressing into merits review or finding that there was only one reasonable finding open to the Tribunal, being Convention related persecution for reason of political opinion or membership of a particular social group, notwithstanding the lack of evidence to support such an inference. Finally, it contends that there was no evidence that the Maoists in question wanted to harm the appellant because he was an agent of the state and the Court should not reconstruct those claims in a different or more articulate manner than they were put to the Tribunal: S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 203 ALR 112 at [1] ; NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 at [58] . I do not agree. . . of the KLF". The Tribunal said that the political objectives of the KLF had no bearing because this particular killing of a government agent was done "out of retribution". I agree with the conclusion of all four judges of the Federal Court. The reasoning of the Tribunal was legally erroneous, and cannot be explained upon the basis suggested by the appellant. It was not merely a finding of fact related to the particular circumstances of the case. There was no evidence to warrant a conclusion that the police officer was killed for reasons of personal animus or private retribution . On the respondent's account, which the Tribunal evidently accepted, the police officer became a "target" because he had tortured a KLF member. That can be described as a form of vengeance or retribution, but, if it were accepted that one of the political objectives of the KLF was to resist oppression of Sikhs, it is not vengeance or retribution of a kind that is necessarily inconsistent with political action in the circumstances which the respondent claimed existed in India. For the Tribunal to say, even by reference to the facts of the case, that such retribution cannot be political, was wrong. That failure was, in my opinion, a relevant error of law. I do not consider that the Tribunal properly instructed itself as to the law, that even where revenge is the immediate purpose or motive, that it can nevertheless sit within a political context, sufficient to attract the protection of the Convention. As Kirby J pointed out in connection with the political/personal dichotomy, revenge and personal hatred may be the expression, in a particular case, of a political motive: Singh at [141]. There was an impermissible short-cut in the Tribunal's reasoning, consistent with the observations of Gleeson CJ at [22] and Kirby J at [141]. In substance, the Tribunal implicitly concluded, as occurred in Singh, that vengeance was incompatible with a political motive. This in turn, it appears, led the Tribunal to side-step the question of the political nature of the Maoist insurgents operating in Nepal. In so doing it erred. The conclusion of the Federal Magistrate which is, in effect, to the contrary, at [69], is in my respectful opinion incorrect. Again, contrary to the finding of the Federal Magistrate [71], I do not consider that the Tribunal discharged the necessary evaluation in relation to the reasons why the appellant was targeted and claimed to have a well-founded fear of persecution: Chen Shi Hai v Minister for Immigration and Multicultural Affairs [2000] HCA 19 ; (2000) 201 CLR 293 per Kirby J at [69]. The appeal be allowed. 2. The orders of the Federal Magistrates Court made on 14 December 2007 be set aside. (b) The first respondent pay the applicant's costs to be taxed if not agreed. 4. The first respondent pay the appellant's costs of the appeal to be taxed if not agreed. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | tribunal found that sole or dominant motivation for threatened harm was for revenge and therefore for satisfaction of a personal grudge finding was unreasonable on the available evidence whether threatened revenge giving rise to alleged fear of persecution was for the reason of the appellants membership of the nepalese police force or by reason of his actual or imputed political opinion tribunal implicitly found that revenge and political motive were incompatible tribunal failed to consider relevant evidence to find whether revenge threatened was for a convention reason appeal allowed. migration |
The applicants are shareholders in the first respondent, Watershed Premium Wines Ltd (the company). The company is a public unlisted company which carries on business as the manager of a managed investment scheme comprising persons engaged in the growing of grapes for the production of wine and as the manager of the wine marketing operations of the scheme. The second to sixth respondents are directors of the company. The seventh to eleventh respondents are shareholders in the company and are related entities of the directors. 2 A number of the shareholders, including the directors and their related entities, are creditors of the company, having previously made shareholder loans to the company. These loans were made by the shareholders some time ago when the company was founded. The total amount still outstanding in respect of the shareholder loans is $4.25 million. The loans have been reflected in the annual accounts of the company as being loans repayable on demand. The applicants are not creditors of the company. 3 On 24 December 2008, the company issued an information memorandum referred to as the Offer Information Statement inviting shareholders to acquire, what was referred to, as "parcels". Each parcel comprises the making of a five year term loan of $1,000 and the acquisition of 26 shares at one cent per share. The information memorandum says that the purpose of the offer is to discharge the existing on demand shareholder loans. The information memorandum goes on to provide that those shareholders who are already creditors of the company can set-off the amount of the existing debt against any amount payable on the taking up of the offer. Accordingly, the offer will not result in the flow of $4.25 million of "new money" to the company. The primary effect of the full implementation of the offer will be to replace on demand shareholder debt with long-term shareholder debt and the issue of 110,578 new shares at one cent per share. The information memorandum does not contain a valuation report. 4 The on demand debt currently due by the company to the directors and related entities comprise more than $3.7 million of the $4.25 million owed. The directors have advised that they intend to take up the offer. There has been no general meeting called by the company for the shareholders to approve the making of the offer referred to in the information memorandum of 24 December 2008. 5 The reason why this application is urgent is that the period within which shareholders are to make offers to acquire the "parcels" expires on 19 January 2009 and the new shares are to be issued on 20 January 2009. 6 The originating application shows that there are two main limbs to the final relief which the applicants claim. First, the applicants seek to enjoin the company by way of a permanent injunction pursuant to s 1324(1) of the Corporations Act 2001 (Cth) (the Act), from accepting any offers made by shareholders to acquire the "parcels" referred to in the information memorandum; and from issuing any of the new shares referred to in that information memorandum. There are other orders which are sought but they are irrelevant to this interlocutory application. 7 Secondly, the applicants seek orders pursuant to s 233(1) of the Act, that there be an inquiry as to the fair and reasonable value of the applicants' shares in the company as at 25 October 2007 and as at 8 January 2008; and that the second to eleventh respondents, alternatively the company, purchase the applicants' shares in the company at the higher of the two valuations. 8 The interim relief which is sought by the applicants is sought under s 1324(4) of the Act. 9 This application was heard over two days. At the end of the hearing on 15 January 2009, I delivered an extempore judgment and made orders dismissing the applicants' motion for the interim injunction. However, on 16 January 2009, I directed that the District Registrar of the Court not enter those orders and relisted the motion for further hearing on 16 January 2009 because after the hearing I apprehended that I may not have fully understood the nature of the final relief sought by the applicants and the case sought to be advanced by the applicants. At the end of the hearing on 16 January 2009, having heard further argument, I revoked the orders that I had made on the previous day, and decided to issue an interim injunction restraining the company from accepting any offers for the acquisition of the "parcels"; and from issuing any shares pursuant thereto. I asked the parties to bring in orders reflecting my decision. I said that I would deliver my reasons later. These are my reasons. 10 In very brief summary, the applicants' claim for a final injunction under s 1324(1) of the Act, restraining the acceptance of the offers and the issue of shares, is based on allegations of a threatened breach by the company of s 208 of the Act, and also breaches and threatened breaches by the directors of ss 180 , 181 , 182 and 183 of the Act. In short, the applicants claim that the information memorandum provides for the giving of a financial benefit to related parties of the company (namely, to the directors and their related entities) and that in breach of s 208(1) there has been no approval of the members in the manner set out in ss 217 - 227 of the Act. Further, it is said that the directors are acting, and threatening to act, in breach of their statutory and fiduciary duties in seeking to issue shares at undervalue to dilute substantially the shareholding of the applicants. 11 It is also pleaded that there have been other occasions since October 2007 when the directors have, in breach of their statutory and fiduciary duties, issued new shares in the company without giving the applicants a reasonable opportunity to participate in the new share issue. This conduct has progressively diluted the applicants' shareholding in the company. The applicants also contend that this conduct, as well as that related to the threatened issue of the 110,578 new shares, pursuant to the 24 December information memorandum, comprises oppressive conduct, which they rely upon, in support of their claim for "buy out" relief under s 233 of the Act. 12 However, in support of their claim for an urgent interim injunction under s 1324(4) , the applicants concentrated on their claim for final injunctive relief under s 1324(1) to enjoin the threatened breach by the company of s 208(1) of the Act. 13 The applicants contended that the offer to acquire the "parcels" referred to in the information memorandum comprised the giving of a financial benefit to a related party of the company because it provided for the issue of shares at undervalue to the directors and their related entities. The applicants relied upon independent valuation evidence which showed that in March 2007 one share in the company was valued at between $1,090 to $1,223. The offer in the information memorandum by contrast sought to provide for the issue of a share for the consideration of one cent. Further, the applicants contended that the offer was discriminatory because it distinguished between those shareholders that were also creditors of the company and those shareholders who were not. The shareholders who were not creditors of the company would have to become creditors of the company by advancing "new money" to the company in order to take up the offer, whereas the shareholders who were already creditors would be able to set-off the existing debts against the subscription monies. 15 Whether or not an interim injunction should be granted under s 1324(4) does not depend upon the application of the usual equitable principles for the granting of interlocutory injunctive relief. The remedy is a statutory remedy. Therefore, consideration must be had to the Parliament's intention in providing by that section, a statutory power to aid the enforcement of the Act, which may be invoked by the regulatory authority, and also by persons whose interests may be affected by a breach of the Act. However, the considerations taken into account in determining applications for equitable injunctive relief will usually be of some assistance in determining whether it is "desirable" for a court to make an interim order under s 1324(4). (See, Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605 at 612-614). 16 The company contended that it was not "desirable" to grant the interim injunction. 17 First, it was said that any relief granted would amount to final relief. I do not accept this contention. The relief sought will not preclude any of the shareholders from making the offers referred to in the information memorandum, but will restrain the acceptance of those offers and any consequential action. Thus, the effect of the orders will do no more than delay the timetable foreshadowed in the information memorandum and receipt of any "new money" which may be advanced to the company. There was no evidence before me as to whether, and if so, how much "new money" it was anticipated would be raised by the proposal in the information memorandum. Further, I intend to order an expedited trial of the question of whether the company threatens to contravene s 208 of the Act and whether the applicants are entitled to a final injunction to restrain the contravention of that section. 18 Secondly, it was contended that there was no serious question to be tried that there was a threatened contravention by the company of s 208 of the Act. The company contended that there was no evidence that the issue of a share in the company at one cent would amount to the issue of the company's shares at undervalue. In my view, this submission cannot be accepted. There is evidence of an independent valuation from RSM Bird Cameron valuing a share in March 2007 at more than $1,000. The company did not refer in its information memorandum to any independent valuation justifying the issue of a share at one cent as being fair and reasonable. Nor did the company lead any evidence to that effect. In my view, there is a serious issue to be tried that the issue of the shares for one cent per share is an issue at undervalue which would have the effect of giving a financial benefit to a related party of the company. 19 Next the company contended that there was no serious issue to be tried because it was plain beyond doubt that the exemption in s 215 of the Act applied. In my view, there is a serious issue to be tried that the offer in the information memorandum discriminates between the class of shareholders who are creditors of the company and those that are not. There is, therefore, in my view, also a serious question to be tried as to whether s 215 of the Act applies. 20 It was, then, contended that an interim injunction was not needed because the applicants would not suffer irreparable harm if interim relief was refused. This contention cannot be accepted. Section 209(1) of the Act provides that if a company contravenes s 208 of the Act, the contravention "does not affect the validity of any contract or transaction connected with the giving" of the financial benefit. Thus if the interim injunction is not obtained and the offers are accepted, the applicants would not be able to impugn the validity of the issue of the new shares on the grounds of a contravention by the company of s 208 of the Act. Accordingly, there is a very substantial benefit to the applicants in preventing the acceptance of the offers and the issue of the shares which would be irretrievably lost if the interim injunction was not granted. 21 I do not accept that there is a readily available claim in damages as an adequate alternative remedy to the claim for injunctive relief. The Act provides that the directors and those involved in any contravention of s 208 of the Act are liable to pay a civil penalty. However, that remedy cannot be invoked by aggrieved shareholders. In my view, this is an instance where the statutory basis of the remedy in s 1324 of the Act as a means to ensure compliance with the Act, is a significant consideration in favour of granting an interim injunction. 22 Further, the fact that the applicants sought a "buy out" of their shares as final relief under s 233 of the Act in respect of the alleged oppressive conduct of the respondents, did not preclude the applicants from being entitled to enforce the provisions of the Act whilst they remained shareholders. 23 The company also submitted that the balance of convenience favoured the refusal of the interim injunction. The company contended that if the injunction was granted then there was a risk that the company would not be able to pay any shareholder creditor who between now and the trial made demand for the repayment of the debt. The second respondent deposed that the company would not be able to borrow $4.25 million from the bank to repay the loans. 24 The evidence was that the shareholder on demand debt had been in existence for about seven years. Further, there was no mention in the information memorandum that there was an imminent likelihood of any shareholder creditor making demand. However, on the morning of the hearing on 15 January 2009, affidavits were filed by Mr Ralph Steel, Mr Gregory Hancock and Mr David Miller. Each deposed that he was, or represented, a shareholder creditor and that he had been advised by a director, Mr Brett Robins, of the injunction application. Each went on to depose that if an interim injunction was granted, he proposed to make demand for the repayment of the shareholder loan. Two of the deponents said that they wanted the money to pay for events which would occur in May 2009. The third deponent did not explain why he needed the money. I place little weight on these affidavits. This is because of their timing; and because of the absence of any explanation from each deponent as to why he would make such a demand, when on the evidence of the second respondent there was a risk that the making of the demand would put the company into liquidation with the consequence that the demands would not be met. In any event, if the demands were made and the company was to go into liquidation this would be as a consequence of the directors having permitted the company to get into a precarious financial position and then seeking to remedy the position by embarking upon a course of action which is arguably unlawful, rather than adopting a less contentious means of raising funds. 25 Accordingly, I will grant an interim injunction restraining the acceptance of any offers made pursuant to the offer to acquire the "parcels" referred to in the information memorandum, and the issue of any new shares referred to in the information memorandum. 26 Insofar as the applicants seek the interim injunction in aid of the claim for final relief that the second to eleventh respondents, alternatively the company, acquire the applicants' shares at the higher of the 25 October 2007 or the 8 January 2008 valuations, I decline that application on the grounds that there would be no utility in granting that interim relief because the final relief could be granted even in the absence of the making of interim orders restraining the acceptance of the offers and issue of the new shares. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | application for interim injunction under s 1324(4) of the corporations act 2001 (cth) whether equitable principles apply grant of interim injunction to give effect to the statutory purpose of s 1324(4) corporations |
The Registrar's subsequent act of removing the applicant's claim from the Register. The application was lodged with the Native Title Registrar on 26 June 1996. Under the NTA as it then stood, details of the application were placed upon the Register of Native Title Claims once the application was accepted by the Registrar (ss 63 and 66 NTA as originally enacted). By operation of s 190(1)(a) of the NTA as originally enacted, the Registrar was required to include in the Register details of any claims contained in applications given to the Registrar. The registration test (contained in ss 190A, 190B and 190C) was incorporated into the NTA by the Native Title Amendment Act 1998 (schedule 2, pt 1, Item 64). Item 11 of Schedule 5 to that Act made provision for s 190A to be applied to certain applications, the details of which were already recorded on the Register of Native Title Claims prior to the commencement of the 1998 amending Act. However, the subject application (having been lodged on 26 June 1996) was not one in relation to which s 190A was to be applied. Thus, the subject application remained on the Register by virtue of ss 66(1)(b) and 190(1)(a) of the NTA as originally enacted. (2) The Registrar must: (a) consider the claim under section 190A , or if the claim has already been considered under that section, reconsider the claim under that section; and (b) use his or her best endeavours to finish doing so by the end of one year after the commencing day. If the Registrar does not do so by that time, the Registrar must consider, or reconsider, the claim under that section as soon as reasonably practicable afterwards. 4 Item 90(1) thus sets out the circumstances in which Item 90 applies. It is not in dispute, as confirmed by the written submissions of both the applicant and the Attorney-General, that the applicants' native title determination application satisfies all of the elements of Item 90(1). 5 The requirement to consider the claim under s 190A , which is required by Item 90(2)(a), directs attention to s 190A(6) , which relevantly requires the Registrar to accept a claim for registration if the claim satisfies all the conditions in s 190B (which deals mainly with the merits of the claim) and all of the conditions in s 190C (which deals with the procedural and other matters). Those conditions, both about the merits of the claim and of procedural and other matters, are extensive and detailed. 6 The Registrar concluded that, as Item 90(1) was satisfied, he was obliged to consider the applicants' native title determination claim, pursuant to Item 90(2)(a). If your application passes the test, it will remain on the Register of Native Title Claims, as a 'registered claim', and you will retain certain important procedural rights, like the right to negotiate with other people about some things proposed to be done to the area covered by your application. If your application fails to satisfy the conditions of the registration test, your application will come off the Register of Native Title Claims. Because of the changes you can provide new information to support your application if you wish. If you want to make changes to your application, you must amend your application by filing a notice of motion in the Federal Court. As your application is one of the older applications, I would like to test it as soon as possible. 7 The Registrar also assigned a case officer to the application, indicating that the case officer would shortly be in contact. A delegate of the Registrar will apply the registration test to your claim in September 2007. Please ensure that any amendments you may intend to file have been filed with the Federal Court by 17 August 2007. If you are providing additional material directly to the delegate, please provide this material to me by 17 August 2007. The material needs to be provided by this date to allow the Registrar to provide procedural fairness to persons who may be affected by the registration decision. This will also allow the delegate an opportunity to properly consider all the relevant material and draft their reasons for decision. 8 The case officer wrote to the applicants again on 7 August 2007, reminding the applicants that the registration test was due to be applied by 30 September 2007, and that any material the applicants intended to provide should be provided by 17 August 2007. That letter further informed the applicants that " If I do not receive anything further from you by 17 August 2007, the Registrar's delegate will proceed to test the claim on the basis of the information now before him or her. I might point out that there has never been any cultural heritage work in the national park in the last 15 years and probably never will be. This can be confirmed with National Parks & Wildlife. Our function in this matter is not for cultural heritage (as was stated at the last Directions Hearing), but to protect the mountains --- our time and energy have been given freely. Would you mind passing on this request to the Court. The case officer accordingly wrote to the applicants to inform them of the decision. Whether or not an extension of time should be granted is assessed on a case by case basis, taking into account statutory timeframes, the applicant's situation, whether a reasonable amount of time has already been allowed, and the effect of the delay on third party interests. 11 In addition, an internal memorandum written by the delegate on 20 August 2008 has since been provided to the applicant as part of these proceedings. Whilst the applicant is unrepresented, I understand there have been a number of telephone conversations between the Case Manager and Dr Eve Fesl and Mr Nurdon Serico, claimants on the application. During these conversations, both Dr Fesl and Mr Serico have been reminded that the application in its current form is unlikely to be capable of registration and that considerable amendments would need to be made to make it capable of registration. They have both understood that to be the case. They have indicated on more than one occasion that they intend to withdraw the application and, probably, file a new application. The Case Manager advises that she suggested to Dr Fesl and Mr Serico that they seek legal advice from Ms Susan Gilmour who has been providing legal assistance to them in relation to other matters. The Case Manager is unaware as to whether they have sought that advice. 12 The applicants did not file any further material, and on 28 September 2007 the delegate considered the applicants' claim for registration against ss 190B and 190C of the Act. The delegate decided not to accept the claim on a number of grounds. As a consequence, the applicants' claim was removed from the Register. 13 On 9 November 2007 the applicants filed an Application for Review. By leave, an Amended Application for Review was subsequently filed on 14 December 2007, and on 11 March 2008 the applicants were granted leave to file a Further Amended Application for Review in Court. That Further Amended Application seeks review of the decisions and action set out in [1] above. The applicant submits that both decisions of the delegate were decisions "of an administrative character" made "under an enactment" such as to bring them within the scope of s 5 of the ADJR Act. In addition and in the alternative, the applicant submits (relying upon Western Australia and the Northern Territory of Australia v Patricia Lane, Native Title Registrar [1995] FCA 1484) that s 39B of the Judiciary Act 1903 (Cth) could confer jurisdiction on the Court, as the Registrar is an officer of the Commonwealth, and it is within the original jurisdiction of the Court to review the decisions of such officers. 15 The Attorney-General does not dispute that the decision of the delegate made on 28 September 2007 in relation to the claim for registration falls within the scope of the ADJR Act. However, the Attorney-General submits that the earlier decision of the delegate, made on 20 August 2007 in relation to the extension of time, was not of an administrative character, nor was it made "under an enactment". 16 Mason CJ set out, in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 , characteristics of decisions to which s 5 applies. Although one is tempted to conclude that in a sense it has some operative effect and carries with it findings adverse to Mr McGibbon, it is to be seen as merely procedural and intermediate and as such is to be viewed as conduct engaged in as a step towards and for the purpose of the later "decision". 18 In my view, the decision in the present case made on 20 August 2007 regarding an extension of time falls into the same category. The granting of an extension was not required by or provided for under the Act, nor was it a final determination of a substantive matter. Rather, it appears to be a procedural and intermediate step. In my opinion, the conduct of the delegate would not be reviewable under s 5, but might be reviewable under s 6 of the ADJR Act. However, as the submissions on behalf of the Attorney-General acknowledge, the decision of 28 September is within the scope of s 5; the grounds of review relied upon by the applicants are the same in relation to both decisions; and the remedies sought by the applicants relate to the 28 September decision. It is therefore sufficient for the present proceedings that the court has jurisdiction to review the 28 September decision. It is not necessary to express a concluded view on the character of the 20 August decision. 19 I also note, however, that the application filed by the applicants was filed outside of the 28 day time period within which an applicant may lodge an application for review (s 11(3) of the ADJR Act). In such circumstances, the Court has a discretion, pursuant to s 11(1)(c) of the ADJR Act, to allow an application to be lodged "within such further time as the court concerned (whether before or after the expiration of the prescribed period) allows. 21 On behalf of the Attorney-General, it was submitted that the Court, in the exercise of its discretion to allow further time pursuant to s 11(1)(c) of the ADJR Act, may take into account that the applicants had available to them "another more specific avenue for review by this Court, under s 190D" of the Act as it stood immediately before the commencement of the Native Title Amendment (Technical Amendments) Act 2007 (Cth). Section 190D(2) of the Act, before those amendments, provided that if the Registrar did not accept a claim for registration, the applicant could apply to the Federal Court for a review of the Registrar's decision. Such an application for review under s 190D(2) of the Act could have been made by the applicants within 42 days of the notification of the Registrar's decision: O 78 r 12(ii) of the Federal Court Rules . 22 It follows that the application for review filed on 9 November 2007 would have been within the 42 days provided by O 78 r 12(ii), and therefore within time. 23 It should be pointed out that although s 190D of the Act was repealed and replaced by s 190D to 190F in their present form by Item 107 of the Native Title Amendment (Technical Amendments) Act 2007 (Cth), Item 136 of that Act provided that the amendments were to be disregarded for the purposes of Item 89 and 90 of Sch 2 to the Amending Act, that is the Native Title Amendment Act 2007 (Cth). 24 It is plain that the applicants are seeking review pursuant to the provisions of the ADJR Act. In this case, the delay of the applicants in seeking review under the ADJR Act is only very short and no prejudice is suggested to other interested parties. It is therefore appropriate to extend the period within which an application, pursuant to the ADJR Act, to review the decision of the Registrar of 28 September 2007 can be made, to 9 November 2007. If the Respondent was so empowered or directed he breached the rules of procedural fairness and/or natural justice in denying the Applicant's request for an extension of time in which to meet the registration requirements. 26 Each of these will be considered in turn. Where Item 90(1) is satisfied, Item 90(2) is enlivened. The dispute which has arisen in the present proceedings centres upon the interpretation of Item 90(2). If the Registrar does not do so by that time, the Registrar must consider, or reconsider, the claim under that section as soon as reasonably practicable afterwards. 29 The applicants submitted that this Item requires the Registrar to apply s 190A to an applicable claim in a very particular way. The applicants argue that, as their claim does not fall within either of those sections, the Registrar has no power to consider their claim for registration under s 190A. In oral argument, Mr Peter Black, the solicitor for the applicants, noted that the applicants have had the benefits of registration for some time already, and any statute which purported to potentially remove those rights would require "the most plain language" to do so. In this instance, Mr Black submitted, the wording is ambiguous and the applicant should get "the benefit of the doubt". 31 The Attorney-General argues that Item 90(2) and s 190A cannot be so narrowly construed. Rather, the Attorney-General argues that Item 90(2) is a mandatory direction to the Registrar to consider the claim "under" or "in accordance with" s 190A. Ms Bowskill of counsel submitted on behalf of the Attorney-General that the provisions of Item 90 "impose a clear statutory obligation on the Registrar to consider claims which fall within Item 90, ss 1, under the registration test provision in the Act. " It is argued that, as a consequence, the duty imposed on the Registrar under Item 90(2) is an extension of the scope of the operation of the duty imposed under s 190A which is otherwise set out in s 190A(1). As such, the Attorney-General argues that s 190A(1) sets out the general categories of claims that must be considered by the Registrar under s 190A, and that Item 90(2) operates to require the Registrar expressly to consider an additional category or class of claims, namely those which satisfy Item 90(1). 32 I accept this interpretation. In my opinion, the clear object of Item 90 is to have certain claims, which had not before been subject to an examination against the criteria of the registration test, tested by the Registrar. The reference in that section to "Item 89" appears to be in error. As the heading in the Explanatory Memorandum indicates, the reference should be "Item 90". In effect he had to decide whether to accept it for registration pursuant to s 190. Further, the applicants argue that s 190 is comprehensive and exhaustively lists all of the Registrar's powers to deal with the Register. The applicants argue that there therefore can be no grant of power to the Registrar by "necessary implication". Accordingly, the applicants say, the act of removing the claim from the Register was beyond power, and should be reversed. 37 The Attorney-General argues that the Amending Act, although not containing an express power to remove claims from the Register in the circumstances of this case, must be read so as to imply such a power, as the removal of the claim is the necessary consequence of a decision that the claim does not meet the conditions in ss 190B and 190C. Following the 1998 amendments, the only claims entered onto the Register are those which satisfy the registration test. • There are significant consequences which flow from the registration of a claim on the Register (and, hence, the continued presence of a claim on the Register). These consequences extend to impact on third parties with interests in the claim area. • The Register is a significant public document which is required to be available for inspection. • The intention of the Act, especially following the changes flowing from the Amending Act, is that any claim which does not satisfy the conditions in ss 190B and 190C should not be included on the Register. • If the Registrar decides that any claim included on the Register, which has not been subject to the registration test, does not satisfy the conditions in ss 190B and 190C, the Registrar must, by necessary implication, come under a duty to remove that claim, and must therefore have the requisite power to do so. 39 In her oral submissions, Ms Bowskill drew particular attention to the duties imposed on the Registrar by the Act with respect to the establishment and maintenance of the Register. The provisions of the NTA concerning its maintenance suggest that it is intended to reflect the current state of affairs with respect to claims. Section 186(1)(ca) requires the date upon which the claim is entered on the Register to be included in it. The Registrar is required 'as soon as practicable' to include in the Register details of any claim accepted for registration under s 190A (s 190(1)(a)) and must likewise amend the Register where there is an amended application which complies with the Act's requirements and remove any entry relating to the claim where it does not: s 190(2) and (3). The Registrar must also take prompt action to remove entries where a claim has been withdrawn, dismissed or finalised: s 190(4). The need for the Register to reflect the current state of claims is confirmed by the Explanatory Memorandum to the Native Title Amendment Act 1998 (in connexion with s 190(2)). 41 It is clear from the above that Pt 7 of the Act imposes particular duties upon the Registrar to maintain the Register, to keep it up to date, and to ensure that the only entries on the Register are those which have met the requirements of the statute. Prior to the Amending Act, the applicants' claim fell into that category. The effect of Item 90 of Sch 2 to the Amending Act was to require the applicants' claim to meet the criteria in the registration test if it was still to meet the requirements of the Act. In my judgment, if the Registrar decided that the applicants' claim did not so meet the Act's criteria, then he was under an obligation to update the Register accordingly. There is no express power in the Registrar to remove a claim under those circumstances, but such power exists, in my judgment, by necessary implication. 42 The principle by which power may be granted by necessary implication is a well established principle of statutory construction: see for example Hudson v Venderheld [1968] HCA 17 ; (1968) 118 CLR 171 at 175; Re Sterling; Ex parte Esanda Ltd [1980] FCA 61 ; (1980) 30 ALR 77 at 83; Gerah Imports v Minister for Industry, Technology and Commerce (1987) 14 ALD 351 at 362 and Collector of Customs v LNC (Wholesale) Pty Ltd (1989) 19 ALD 341 at 345. 43 In my opinion, as Item 90(2) of Sch 2 to the Amending Act requires the Registrar to examine claims as against the criteria in ss 190B and 190C, and as the Registrar has a duty to update and maintain the Register so that it contains only claims which have met the requirements of the Act, the comments of Griffith CJ are apposite. If, as the applicants argue, the Registrar could not remove claims such as the applicants' from the Register, he would be faced with a situation where he was required to examine certain claims for compliance with the registration test, but could not thereafter remove non-compliant claims from the Register. The power, and the duty, to review the claim in the first place would be rendered nugatory. 44 It follows from the above that, in my opinion, the Registrar had the power to remove the applicants' claim from the Register. That is, the argument that the decision of 28 September did not constitute sufficient grounds for the Registrar to remove the claim from the Register "flows on from" the argument above that the Registrar had no power to remove the claim. 46 It follows from my conclusions above that this argument cannot succeed. Once the Registrar had decided that the applicants' claim did not meet the registration test, he was under an obligation to update the Register, thereby ensuring that only claims satisfying the statutory requirements remained registered. The decision of 28 September enlivened that duty, and accordingly constituted a sufficient basis for removing the claim from the Register. 50 The importance of the construction of the relevant statutory scheme has recently been reiterated by the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592. It is also clear that the particular content to be given to the requirement to accord procedural fairness will depend upon the facts and circumstances of the particular case. 51 In the context of this matter, it is s 190A of the Act and Item 90 of Sch 2 to the Amending Act to which the Court must have particular regard. Section 190A(3) of the Act sets out the material to which the Registrar must have regard when considering a claim under s 190A. 53 Item 90 of Sch 2 to the Amending Act supplements s 190A in this instance. 54 In Gudjala People (supra), Dowsett J considered the procedural fairness requirements imposed upon the Registrar in considering an application under s 190A in the normal course of events; that is, where a normal application had been made to the Registrar to have an application entered on the Register. In that case, the Registrar's delegate had advised the applicant of some, but not all, deficiencies in its application. The applicant argued that this breached the rules of procedural fairness. However, he was not obliged to do so. To extend to the applicant an opportunity to re-formulate the claim before deciding whether or not to accept it for registration was a desirable, but not necessary, course. Even if the Delegate had not advised the applicant of all matters causing concern, that would not have led me to conclude that he was bound to proceed upon the basis that matters not addressed should necessarily be resolved in ways which were favourable to the applicant. The applicant was warned that it must satisfy the requirements of the Act. The Delegate directed attention to his major areas of concern. There is nothing in this point. 55 However, it must also be noted that the matter presently before the Court has a different historical context from that in Gudjala People . Aside from the additional requirements imposed on the Registrar by Item 90, it is important to note that the applicants' claim was already entered onto the Register, thereby conferring upon the applicants the various rights that come with registration. The applicants have enjoyed those rights for some 11 years. That context informs the requirement in Item 90(4)(c) for the Registrar to advise the applicant that he is considering the claim, and to provide the applicant with a "reasonable opportunity" to provide any further information or other things to the Registrar in his consideration of the claim. 56 The correspondence between the delegate and the applicants relevant to this issue is set out at [6]-[11] above. • The case manager wrote to the applicants on 14 May to tell them that the claim would be tested in September 2007, and that any amendments or additional information needed to be filed by 17 August 2007. • The case manager wrote a reminder letter to the applicants on 7 August 2007, noting that the claim was still to be tested by 30 September 2007, and that information had to be filed by 17 August 2007. • The applicants wrote an email to the case manager on 17 August 2007 requesting an extension of time to amend the claim and provide further information. • The delegate refused to change the time for the testing of the claim, but gave the applicants until 24 August 2007 to provide further information. This was communicated to the applicants on 20 August 2007. 57 The applicants' arguments rest in large part upon the fact that they were, at the time, not legally represented. This was the case until after the delegate made the decision on the extension of time, and, the applicants argue, should have been apparent. The applicants argue that, without such representation, they did not know what amendments might have to be made to the application if it was to pass the registration test, and were therefore reliant on assistance from the National Native Title Tribunal. 58 The applicants further refer to the Registrar's first letter of 24 April, which indicated that the case manager would discuss with the applicants what would need to be done to prepare the application, any changes the applicants would like to make, and the type of assistance the Tribunal could give them. The applicants argue that there is no evidence that the case manager informed them of what they needed to do or what changes had to be made, other than the comment that "considerable amendments would need to be made". As such, it is argued, the decision not to grant an extension meant that the applicants were not granted "a reasonable time" to prepare the application, and amounted to a breach of procedural fairness. 59 In support of this argument, the applicants point to Item 90(2)(b), which requires the Registrar to "use his or her best endeavours to finish [considering the claim] by the end of one year after the commencing day. " The applicants argue that as Item 90(2)(b) contemplates the Registrar taking up to a year to test claims, to require the applicants to prepare amendments to their claim in such a short time, especially after having been registered for 11 years, amounts to a breach of procedural fairness. 60 In addition, the applicants argue that, in assessing the "circumstances of the case" as required, the delegate failed to take into account certain issues. Whether it is practicable to reconsider all claims for registration within one year of the commencing day may depend on the resources, not only of the NNTT but also of the applicants and their representative bodies. 61 Further reference is made to a letter written by the case manager to the applicants on 20 August 2007, in which certain factors which are taken into account when assessing whether or not an extension of time should be granted are identified. 62 The applicants complain that the delegate did not give sufficient consideration to all of those factors. As such, and in light of the fact that the applicants had no legal representation, the delegate's decision is argued to be a breach of procedural fairness. 63 It is worthwhile noting that the applicants have not claimed as a ground of their application that the delegate failed to take into account relevant considerations in making the decision. Dowsett J in Gudjala People commented on an application which confused errors in the decision-making process and breaches of procedural fairness, observing that (at [13]) "errors alone will not generally amount to a denial of procedural fairness. " In this instance, supposedly relevant considerations may have some bearing on the question of procedural fairness, but only to the extent that they inform the "circumstances of the case". 64 The question for the Court on this occasion is therefore whether the delegate "acted fairly" and gave the applicants a "reasonable opportunity" to amend their application and provide further materials to the Registrar. In considering this question, I do not agree with the contention of the applicants that the obligation upon the Registrar to consider claims for registration within a year has any application. It seems to me that, by imposing upon the Registrar a nominal deadline of one year within which to consider claims, Item 90(2) clearly aims to have claims for registration tested and decisions made as quickly as the resources of the Tribunal, the applicants and relevant representative bodies will allow. It follows that that time period is not, in my opinion, relevant to any consideration of whether an applicant has been given a reasonable opportunity to submit materials to the Registrar. 65 The Registrar first put the applicants on notice of the fact their claim would be tested on 24 April 2007. That letter informed the applicants that they would have the opportunity to amend their claim, however it was not clear from the letter the kind or extent of changes that would need to be made, or the time frame within which the changes would have to be made. 66 It was therefore the case manager's letter of 14 May 2007 which first informed the applicants of the timeline that would be applied. From that day the applicants were given three months to submit changes and new information. 67 As noted in [58] above, the applicants claim they were not given help by the case manager, as was promised. However, the memo produced by the delegate (see above at [11]) indicates that the applicants had a number of telephone conversations with the case manager, during which the applicants were informed that the application as it stood was unlikely to be registered and that considerable amendments would need to be made, and were advised to seek legal advice in relation to the claim. In my judgment, there is no obligation on the Registrar or his delegate to advise a claimant of what amendments are required to be made to an application to ensure compliance within the requirements of the Act. 68 Both the delegate's memo and the email request for an extension of time (at [9]) seem to indicate that the principal delay in taking action towards amending the claim or providing any information was due to an initial intention on the part of the applicants to withdraw the claim. However, the applicants eventually decided, at some point prior to 17 August 2007, that they wished to continue and to provide materials to the Registrar. On 17 August 2007, the applicants made their request for an extension of time to do so. I note that that email provided no justification or reasons for the requested extension, aside from the initial indecision over whether or not to withdraw. 69 Mr Black for the applicants argued that the "great rush" of the Registrar to test the applicants' claim was incongruous with the fact that the claim had been on foot, as yet unresolved, for some 11 years. In contrast, Ms Bowskill for the Attorney-General submitted that the length of time during which the applicants had enjoyed the advantages of registration without being subject to the test was a good reason for the claim to be tested first, and as quickly as was reasonable. It was also submitted on behalf of the Attorney-General that it was not unreasonable to expect the applicants to have, in the 11 years during which the claim was on the register, compiled material to support the claim which could readily have been provided to the Registrar. 70 The test for registration of a claim was enacted in 1998, although the applicants were not at that point subject to it. Any claim lodged after 1998 had to satisfy that test. The 2007 amendments, in light of the important purpose the test fulfils, extended the test's operation to claims which had not yet been tested. In my view, the fact that the applicants have enjoyed the privileges of registration for such a significant time without having had to fulfil the requirements of the registration test is not of itself a reason to allow that situation to continue. Rather, it seems to me that it is in the interests of all interested parties for the intention of the legislature to be carried out soon as is reasonably practicable. 71 The proposed orders claimed by the applicants in their Amended Application are also of some relevance. By that document, the applicants seek an order directing the Registrar to re-consider the claim subject to "allowing the applicants not less than 2 months to make any amendments to the claim...". (Emphasis added). For the applicants to seek two extra months to amend their claim seems to me inconsistent with a claim that the three month period originally granted to provide information and make amendments constituted a breach of procedural fairness. 72 In my judgment it has not been shown that the timeframe allowed by the delegate, in the circumstances of this case, unreasonably fettered or compromised the right of the applicants to a fair hearing. The Parliament had determined that the claims such as the applicants' were to be tested. The applicants' was one of the older claims in that category, having remained on the Register for many years and enjoyed those benefits without being subject to the requirements imposed on later claims seeking the same benefits. It was not unreasonable for the Registrar to place the applicants' claim amongst the first to be tested. In my opinion, the Registrar allowed the applicants a reasonable opportunity to make changes or to submit further information. The applicants failed to comply with the deadline not because it was unreasonable, but because, for whatever reason, they did not perform the necessary tasks in the time granted, which was a not unreasonable time for the performance of those tasks. In this application, the applicants have sought a month less than originally granted by the Registrar in order to complete the same tasks. 73 In my opinion there has been no denial of procedural fairness by the Registrar. 74 None of the grounds has been made out. 75 It follows that the Further Amended Application for Review is dismissed. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | application for review of decision of native title tribunal registrar not to accept native title claim for registration on the register of native title claims operation of the native title amendment act 1998 and the registration test whether the registrar was empowered to not accept the claim for registration where claim already registered whether registrar was empowered to remove the claim from the register whether the registrar's decision represented a sufficient basis to remove the claim from the registrar where the registrar was obliged under the legislation to test the claim where the registrar was empowered to remove the claim by necessary implication where registrar under a duty to maintain the register and remove the claim application for judicial review pursuant to the adjr act review of decision of the native title tribunal registrar not to grant extension of time to amend native title claim and to provide new materials to support claim whether the registrar's decision amounted to a denial of procedural fairness whether the applicants had been given a "reasonable opportunity" to provide materials where timeframe allowed by delegate did not unreasonable fetter or compromise the right of the applicants to a fair hearing where applicants allowed a reasonable opportunity to make changes and submit materials and information native title administrative law |
Between approximately 3:05 pm and 4:25 pm (local time) the ship drifted and dragged her anchor. At approximately 4:25 pm (local time) the anchor struck a submarine pipeline jointly owned by Esso Australia Resources Pty Ltd and BHP Billiton Petroleum (Bass Strait) Pty Ltd and used to transport ethane from their gas treatment facility at Longford. Four negligence actions are now pending against the APL Sydney. In each action the shipowner (Strong Wise Limited) contends that its liability is limited by the Convention on Limitation of Liability for Maritime Claims 1976. In two actions, one by Qenos Pty Ltd and the other by Huntsman Chemical Co Australia Pty Ltd, each plaintiff says its claim falls outside the 1976 Convention. It is agreed that this issue should be determined before each trial. The APL Sydney is a fully cellular container ship which was on time charter to American President Lines (APL). It was employed on a liner service operated by APL carrying cargo between Asian and Australian ports. The vessel had sailed from Hong Kong bound for the port of Melbourne to discharge her cargo. The vessel's gross register tonnage is 35,991 and its twenty-foot equivalent unit is 3,534. Qenos is the plaintiff in action NSD 2004 of 2008. It manufactures and supplies polyethylene and olefin products at a plant in Altona, Victoria. It uses ethane delivered via the pipeline in the production of polyethylene. When the pipeline ruptured, Qenos' supply of ethane stopped. In its action against the ship Qenos contends that the shipowner, by its servants or agents, negligently caused the rupture of the pipeline thus causing Qenos to suffer economic loss. In particular the loss is said to result from: (a) the need to switch to using LPG as a feedstock in the production of polyethylene which is more expensive, has a lower yield than ethane, and produces other by-products that are required to be disposed of and result in higher plant cleaning costs; (b) the inability to run its production facilities at full rates on LPG resulting in a substantial reduction in the plant's overall ability to produce polyethylene; (c) the need to import polyethylene in order to meet customer orders at a greater cost than producing polyethylene from ethane supplied via the pipeline; (d) higher operating costs; and (e) the inability to meet customers' demands through production and imports, causing some customers to switch to alternative suppliers. Huntsman is the plaintiff in action QUD 431 of 2008. It manufactures styrene monomer, polystyrene and expendable polystyrene from a plant at West Footscray, Victoria. Ethane is a necessary feedstock in the manufacturing process. Huntsman acquires it ethane via the pipeline. In its action, which is also based in negligence, Huntsman asserts that it also suffered economic loss when its supply of ethane stopped. Huntsman's loss is said to result from: (a) it being unable to operate the plant; (b) the need to ration the supply of existing stock to customers; (c) the purchase of alternative supplies of styrene monomer and expendable polystyrene; (d) it incurring dead freight obligations associated with shipments rendered unnecessary because it is unable to operate its plant; and (e) its inability to meet customer demands as a result of which some customers may elect to source their requirements from alternative suppliers, either temporarily or permanently. Qenos has provided detailed particulars of its loss. For commercial reasons the parties have agreed to keep the details confidential. For present purposes it is sufficient to note that Qenos' claim in damages exceeds $30 million. Huntsman Chemical Co has also provided particulars of its loss. The details are also confidential. Its claim exceeds $7 million. The question in issue in each action is whether a claim for economic loss is covered by the 1976 Convention. The 1976 Convention came into force as domestic law by s 6 of the Limitation of Liability for Maritime Claims Act 1989 (Cth). It permits shipowners and others to limit their liability in respect of certain claims to an amount calculated by reference to the ship's tonnage (as distinct from the ship's value or the owner's worth). The policy underlying the limitation provisions of the 1976 Convention is to protect shipowners and their servants and also to create a fund to be equitably (proportionately) distributed among claimants who have suffered loss from a particular event: Victrawl Pty Ltd v Telstra Corporation Ltd (1995) 183 CLR 595, 601. The Supreme Court of the United States said of similar provisions: "The statutory provision for limitation of liability, enacted in the light of the maritime law of modern Europe and of legislation in England, has been broadly and liberally construed in order to achieve its purpose to encourage investments in shipbuilding and to afford an opportunity for the determination of claims against the vessel and its owner": Just v Chambers 312 US 383, 385 (1941). The term "shipowner" shall mean the owner, charterer, manager and operator of a seagoing ship. ... ... In this Convention the liability of a shipowner shall include liability in an action brought against the vessel herself. The fund shall be constituted in the sum of such of the amounts set out in Articles 6 and 7 as are applicable to claims for which that person may be liable, together with interest thereon from the date of the occurrence giving rise to the liability until the date of the constitution of the fund. Any fund thus constituted shall be available only for the payment of claims in respect of which limitation of liability can be invoked. A fund may be constituted, either by depositing the sum, or by producing a guarantee acceptable under the legislation of the State Party where the fund is constituted and considered to be adequate by the Court or other competent authority. After a limitation fund has been constituted in accordance with Article 11, any ship or other property, belonging to a person on behalf of whom the fund has been constituted, which has been arrested or attached within the jurisdiction of a State Party for a claim which may be raised against the fund, or any security given, may be released by order of the Court or other competent authority of such State. On 23 January 2009 the shipowner established a limitation fund in the sum of $AUD 32,112,540. The shipowner says this fund is the limit of its liability in respect of the damage to the pipeline and all loss resulting from that damage. Further, the shipowner says that all claimants who are successful in their respective actions against the vessel cannot seek recovery beyond the fund. In respect of the claims made by Qenos and Huntsman, the shipowner says they are covered by the 1976 Convention as they fall under Art 2.1(a) or Art 2.1(c). The issues raised by this dispute depend upon the meaning of Art 2.1(a) and Art 2.1(c). The principles to be applied to ascertain the meaning are not in doubt. The general rules governing the construction of a treaty are laid down in the Vienna Convention on the Law of Treaties 1969. While the Vienna Convention did not come into force until 1980, it is accepted that it reflects customary international law and may be applied to treaties concluded before 1980: Arbitration regarding the Iron Rhine ("IJzeren Rijn") Railway (Belgium/Netherlands) , Award of 24 May 2005, p 23 para 45 ("It is now well established that the provisions on interpretation of treaties contained in Articles 31 and 32 of the [Vienna] Convention reflect pre-existing customary international law, and thus may be (unless there are particular indications to the contrary) applied to treaties concluded before the entering into force of the Vienna Convention in 1980. The International Court of Justice has applied customary rules of interpretation, now reflected in Articles 31 and 32 of the Vienna Convention, to a treaty concluded in 1955 ... and a treaty concluded in 1890, bearing on rights of States that even on the day of Judgment were still not parties to the Vienna Convention ... There is no case after the adoption of the Vienna Convention in 1969 in which the International Court of Justice or any other leading tribunal has failed so to act " as cited in R Gardiner, Treaty Interpretation (2008) 12-13). The general rule of interpretation is found in Art 31 of the Vienna Convention. A special meaning shall be given to a term if it is established that the parties so intended. Article 32 is also important. Article 31 has three elements to which regard must be had: (a) the ordinary meaning of the terms of a treaty; (b) the context in which the terms are used; and (c) the purpose and objects of the treaty. In applying these elements, a "holistic approach" ought be adopted, with primacy to be given to the text of the treaty: Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 , 254 citing Golder v United Kingdom [1975] ECHR 1 ; (1975) 1 EHRR 524. Article 31 therefore invites the following approach. First, determine the ordinary meaning of a term. Second, ask whether that meaning (or one of several meanings) should be adopted having regard to the context. The context includes the Article in which the word is found, as well as the whole treaty (and may also include the previous treaties). Third, the purpose and object of the treaty must be considered. But the third step should not be undertaken in isolation from the terms of the treaty, but rather as part of the context which can shed light on the meaning of particular terms. When following this approach it is necessary to be unconstrained by principles of domestic law, which usually have no role to play in the construction of international conventions: Stag Line Ltd v Foscolo Mango & Co Ltd [1932] AC 328, 350; The Shipping Corporation of India Ltd v Gamlen Chemical Co (A/Asia) Pty Ltd [1980] HCA 51 ; (1980) 147 CLR 142 , 159. In addition to the general rules of interpretation provided for in Art 31, Art 32 allows the use of supplementary means of interpretation in certain circumstances. For present purposes, it is sufficient to note that Art 32 permits consideration of the negotiating history leading to the conclusion of a treaty, to determine the meaning of a treaty when the interpretation according to Art 31 leaves the meaning ambiguous. With this background in mind, it is now appropriate to consider the interpretation of Art 2 of the 1976 Convention. Article 2.1(a) is concerned with three types of claim: (a) loss of life or personal injury; (b) loss of or damage to property; and (c) consequential loss resulting therefrom. There is nothing controversial about the first two categories of claim. As to the third category regarding consequential loss, two observations can be made. First, the loss must result from or be caused by (ie be consequential on): (a) loss of life or personal injury; or (b) loss of or damage to property. Second, the loss may be: (a) further loss of life or personal injury; (b) further loss of or damage to property; (c) financial loss resulting from loss of life or personal injury; or (d) financial loss resulting from loss of or damage to property. These types of losses may be characterised as "concrete" (i.e. loss of life or personal injury and loss of or damage to property) and "abstract" (i.e. financial loss resulting from a "concrete" loss). By way of contrast Art 2(1)(b) and Art 2.1(c) deal solely with "abstract" loss not covered by Art 2.1(a). This, I think, is clear, in the case of Art 2.1(b) from the nature of the claim with which that paragraph is concerned (delay in carriage) and, in the case of Art 2.1(c), because it deals with claims in respect of "other loss", that is, loss other than of the kind covered by Art 2.1(a) and Art 2.1(b). What I have said to this point as regards the operation of Art 2.1 is reinforced by the preparatory works. The words 'loss' and 'damage' in this connection are used in the concrete sense: physical loss and, broadly speaking, physical damage. The words are used in the same sense both in Article 1 of the 1957 Convention and Article 4, 1, (iv) of the 1967 Liens and Mortgages Convention. However, consequential damage --- physical damage as well as abstract damage --- arising out of loss or damage in the concrete sense shall give rise to limitation of liability as well as to a maritime lien. They accept that their claims are for consequential loss in the abstract sense (ie financial loss from the interruption of the supply of ethane) as a result of damage to property (ie the burst pipeline). The plaintiffs say, however, that the reference to consequential loss in Art 2.1(a) is to consequential loss suffered by a person resulting from a "concrete loss" suffered by that same person. Put differently, the plaintiffs contend that a person who neither suffers personal injury nor property damage is not a person who relevantly suffers "consequential loss resulting therefrom". This construction of Art 2.1 is not without its supporters. For instance, S Derrington and J Turner, The Law and Practice of Admiralty Matters (2007) observe at 249: "There are two possible meanings which could be ascribed to the phrase .... [t]hey could relate to further loss (or damage) resulting from, eg, the loss of property (such as bunkers), such as pollution of beaches and resulting clean-up costs; alternatively, they may be confined to 'consequential loss' in the narrower sense, ie losses caused to the property owner consequential upon the loss of or damage to his property, such as loss of profits. " The authors accept (at 250) that the competing views are "finely balanced" but tentatively submit that "the narrower construction is the better one ... the absence of the words 'or damage' and the difficulty of applying any notion of 'consequential loss' (in the wider sense) to loss of life (to which the phrase also applies) tip the scale in favour of the narrow reading of the words". With great respect to the authors there is no difficulty with the idea of consequential loss (including financial loss) resulting from loss of life. Most common law countries have adopted the Fatal Accidents Act 1846 (9 & 10 Vict. c.93) (often referred to as Lord Campbell's Act) which provides for the recovery of financial loss following death caused by a wrongful act, neglect or default. A similar position exists in some continental countries: see by way of example the German Environmental Liability Act of 10 December 1990 and the German Road Traffic Act of 19 December 1952. In any event, little if anything can be made from the failure (if it be a failure) to include the words "or damage" in the expression "consequential loss". It is impermissible to base a construction of the Article on such an approach; namely by looking at Art 2 with a grammar in one hand and a dictionary in the other. Not surprisingly, the wider view also has its supporters. The most important is the opinion of Thomas J in the Aegean Sea Traders Corporation v Repsol Petroleo SA [1998] 2 Lloyd's Rep 39. The shipowners made a claim against the charterer following the grounding of the vessel which resulted in her destruction and the loss of most of her cargo of crude oil. There were several heads of damages the shipowners sought to recover, including an indemnity in respect of claims brought against them for property damage, clean up costs and loss of profit claims by fishing boat owners in Spain under legislation giving effect to the Civil Liability Convention on Oil Pollution Damage 1969. The principal issue was whether the charterers were entitled to limit their liability in respect of claims bought by the shipowners. Thomas J held that the 1976 Convention does not apply where a shipowner brings the claim. This finding disposed of the action. Nonetheless, the judge went on to consider whether the particular claims were covered by the 1976 Convention. As regards the claims for indemnity, Thomas J said they fall within Art 2.1(a) albeit they were unrelated to the damage to the ship. In that case cargo was salvaged following a serious fire which occurred on the ship. The salvors had a lien on the ship and cargo for their salvage reward. The issue was whether the claim by the cargo-owners for their proportionate share of salvage, plus additional stevedoring and transhipment costs, was to be made against a limitation fund. Sheen J held that the lien diminished the value of the cargo, and therefore constituted property damage for purposes of Art 2.1(a). He did not specifically address the additional stevedoring and transhipment costs, but treated them as part of the cargo-owner's consequential loss, albeit the loss did not flow from any property "damage" to the cargo but, rather, was the consequence of damage to the ship. In my opinion the claims by Qenos and Huntsman for economic loss are consequential loss claims within Art 2.1(a). Such a conclusion is in accordance with a common sense (bona fide) reading of the Article, bearing in mind the purpose of the Convention (the limitation of liability), and is also consistent with the cases. But in case my construction of Art 2.1(a) is wrong, I propose to consider whether the claims fall under Art 2.1(c). The resolution of this question turns on the meaning of the phrase "infringement of rights other than contractual rights". The issue is whether the phrase is limited to the infringement of statutory or proprietary rights. In order to resolve this issue it is appropriate to consider, first, the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships 1957 which the 1976 Convention replaced. Initially it was proposed that the expression "infringement of any rights should read "any rights of any nature". This is manifestly not the intention of the writers, given that the English report at the Brighton conference explicitly excluded such claims for limitation. The word 'rights' seems to have been borrowed from the British proposition presented at the diplomatic conference in Brussels in 1909; 'injuries or losses caused to the goods or rights of any nature'. At the 1910 conference this statement was replaced without comment by that used in article 1, 1 of the current convention 'injuries caused' (minutes pg. 174). Neither the English project of 1909 nor a later publication gave any explanation of the term 'rights'. If, however, in the current project this term does not include contractual claims, then it should signify 'real rights', which corresponds approximately to the English expression 'property interests'. (Interestingly, the Norwegian proposal to exclude contractual rights from the Article did find its way into the 1976 Convention). In English law the term has no exact meaning, and the definition proposed by the International Sub-Committee was 'claims in respect of other loss in direct connection with the operation of the ship or salvage operations, not capable of being based on contract'. This is the formula used in the Liens and Mortgages Convention. As, however, the 'infringement of rights' conception has not caused undue difficulties in the application of the 1957 Convention the Conference preferred to retain it with the qualification 'right other than contractual rights' in order to exclude loss occasioned by breach of contract. It was a proposal which the French representative said made no substantial change to the basic text. Paragraph 1 of the French draft covered proposed Art 2.1(a) and Art 2.1(c) and read: "Subject to Articles 3 and 4, the persons specified in Article 1 may limit their liability to contracting parties or third parties if the damage was caused on board the ship or is directly connected with the navigation or operation of the ship". It is clear that the French representative was of the view that "rights" were not confined to property rights. The issue in contention, and the point discussed at the convention by the delegates, was whether "rights" should include contractual rights. With this background in mind, I can now deal with what is meant by the phrase "infringement of rights". In my opinion the word "rights" in the expression "infringement of rights" includes a legally enforceable claim which results from the act or omission of another person. Thus if a system of law provides that an act or omission by A which causes damage to B gives rise to a cause of action (claim) by B, that system confers a right on B and a co-relative duty on A. B has a protected interest (the right), the violation of which is a wrong. This conclusion is reinforced when regard is had to the interaction between Art 2.1(a) and Art 2.1(c). If the word "right" in Art 2.1(c) was limited, as proposed by the plaintiffs then, given the scope of Art 2.1(a) (which includes "damage to property"), Art 2.1(c) would have little work to do. It follows that claims in tort for pure economic loss fall within Art 2.1(c), provided the other criteria are satisfied. In reaching this conclusion I have not, as I was invited to do, had regard to the position in England regarding the difficulty of bringing an action for pure economic loss caused by the negligent act of a third party. I do not regard the difficulty that confronts a litigant under the common law in bringing a claim for pure economic loss as relevant to the construction of the 1976 Convention. For one thing, such an approach runs counter to accepted principles of construction. Further, the approach ignores the fact that in most civil law countries it is permissible to bring a claim for pure economic loss. For a short survey as regards shipping claims see W Tetley, 'Damages and Economic Loss in Marine Collision: Controlling the Floodgates' (1991) 22 Journal of Maritime Law and Commerce 539. I will hear the parties as to what orders should be made. | limitation of liability limitation fund claim for damage caused by ship anchor struck pipeline causing supply of ethane to stop plaintiffs use gas in their business operations plaintiff suffered only pure economic loss whether plaintiffs claim subject to the limitation fund interpretation of treaties principles to be applied admiralty |
2 Mr Ranjit Rana claims damages against the University of South Australia ("the University") and he relies on two causes of action. First, he claims that the University contravened s 52 of the Trade Practices Act 1974 (Cth) ("the Act ") and that he is entitled to damages under s 82 of the Act . Secondly, he claims that he entered into a contract with the University, which it breached, and that, as a result, he is entitled to damages from the University. In addition to his claim for damages, Mr Rana claims an injunction against the University, restraining it from banning him from attending any public functions held by it in the future. 3 Mr Rana appeared in person and he gave evidence in support of his case. He did not call any witnesses. The University was represented and it called a number of witnesses. All witnesses swore affidavits, and the affidavit or affidavits of each witness, for the most part, constituted the evidence in chief of that witness. Each witness was cross-examined by the opposing party. 4 For reasons which I will give, I find that Mr Rana was a most unsatisfactory witness and I do not accept his evidence except where it accords with other evidence which I accept. It is sufficient to say at this point that Mr Rana's evidence as to important events changed during the course of the proceedings, some of his evidence was highly improbable and a good deal of his evidence was inconsistent with evidence which I accept. 5 I find that each of the witnesses called by the University was honest and straightforward, and I accept each witness as a witness of truth. 6 It is convenient, before dealing with any other matters, to summarise Mr Rana's case against the University as set out in his statement of claim. In doing that, I will also set out those matters which are common ground between the parties. 8 It is common ground that on that day the University held an event at the Adelaide Convention Centre ("the Convention Centre"). The event was what the University called a "hypothetical" and it involved a discussion about the prospects of Australian businesses exporting wine to the Asian market. The hypothetical involved seven panellists each with differing areas of either interest or expertise. The hypothetical was conducted from 6.30 pm to 8.30 pm or thereabouts and, as advertised, there were "drinks and nibbles" from 5.30 pm. The ticket price was $45, with University alumni, staff and students entitled to a discount. A person who purchased nine tickets received an additional ticket free of charge. 9 An advertisement for the hypothetical appeared in The Australian newspaper on 27 March 2006 and it stated that if a person wanted to "book" for the hypothetical he or she could contact Ms Melissa Ellmers on a telephone number provided, or visit the University's website. The evidence of Ms Ellmers suggests that to "book" in the context of the advertisement and the hypothetical meant to purchase tickets by credit card or cheque. 10 It is common ground that Mr Rana saw the advertisement to which I have referred and that he contacted Ms Ellmers, who was an employee of the University, by telephone and discussed attendance at the hypothetical. He went to the Convention Centre in the early evening of Monday 27 March 2006, but he was refused entry to the hypothetical by another employee of the University, Ms Helen McIver. 11 Mr Rana's case (as pleaded in his statement of claim) is that when he spoke to Ms Ellmers, she promised to provide him with ten tickets and he said that he would pay $35 for each ticket "as a member of the University of South Australia's alumni". His case is that he went to the Convention Centre and that at about 5.20 pm he gave Ms McIver the sum of $350. Ms McIver did not give Mr Rana the tickets "as promised by Melissa Ellmers". Mr Rana's case is that Ms McIver called security guards and "SA Police" and told them that Mr Rana had been banned from all University functions for being a troublemaker. 12 Mr Rana's case is that the University was involved in trade or commerce as it had promoted the hypothetical by the advertisement in The Australian newspaper on 27 March 2006. His case is that the University's conduct was misleading or deceptive in that he was not allowed to attend the hypothetical "for the public as advertised in the national newspaper". Not only was he misled, but his case is that the security guards and police officers were also misled because of what Ms McIver said to them about him. In addition, Mr Rana's family and friends were also misled or deceived. Mr Rana alleges that he was induced to buy the tickets by the University's conduct. The total amount for the loss and damage is A$1000000. He alleges that Ms Ellmers agreed that he would be provided with ten tickets for $35 each. He claims that under the contract he would attend the Convention Centre, pay the money and receive the tickets. The contract was an "oral and implied contract". 14 Mr Rana's case is that the contract was breached by the University when it banned him from attending the hypothetical. He paid for the tickets, but the money was not returned to him. He claims that he was disparaged in front of his guests. Mr Rana claims the same loss and damage for the alleged breach of contract as he claims for the alleged contravention of s 52 of the Act . 15 In his statement of claim, Mr Rana also alleges that the University breached a deed of settlement. Mr Rana tendered a deed of settlement and a release between himself and the University dated 2 March 2006. It appears from the deed that Mr Rana had two proceedings in this Court against the University and that under the deed he agreed to discontinue the proceedings and in return the University agreed to pay Mr Rana a sum of money. There is an allegation in the statement of claim that, by its conduct on 27 March 2006, the University breached a term of the deed, although it was unclear by the end of the case whether this allegation was still being pursued by Mr Rana. In any event, I have read the deed of settlement and release and, having regard to my findings of fact, it does not appear to me that any conduct of the University on 27 March 2006 constituted a breach of a term of the deed. In its defence, the University alleged that Ms McIver believed that Mr Rana was not permitted to attend the hypothetical. In her affidavit filed and served pursuant to orders of the Court made before the trial, Ms McIver referred to previous dealings she had had with Mr Rana. On an interlocutory hearing, Mr Rana sought from the University further and better discovery of documents relating to his previous dealings with the University. After an adjournment to consider its attitude to the application, the University decided that it would not lead any evidence of its previous dealings with Mr Rana, or evidence from Ms McIver as to the effect those dealings had on her decision to exclude Mr Rana from the hypothetical. In those circumstances, I refused the application for further and better discovery of documents relating to Mr Rana's previous dealings with the University. Although Mr Rana cross-examined Ms McIver as to some aspects of his previous dealings with the University, by and large, the trial proceeded without evidence from Ms McIver as to the precise reason or reasons she refused to allow Mr Rana entry to the hypothetical. Ms Mansfield was employed by the University and she held the position of Coordinator of Marketing and Alumni in the Business Division Office. She was responsible for the promotion and marketing of the hypothetical. She understood that the hypothetical was open to anyone who wished to attend. She understood that it was to be a public event held on private property and open to any fee-paying member of the public who was interested in attending. She approved the final form and content of the advertisement for the hypothetical which appeared in The Australian newspaper on 27 March 2006 and which Mr Rana said he read. 18 As I have said, it is common ground that there was a telephone conversation between Mr Rana and Ms Ellmers on 27 March 2006. I accept Ms Ellmers' account of that conversation. I will now summarise that account and, at the same time, it is convenient to summarise her evidence of later events which I also accept. 19 Ms Ellmers was employed by the University and she held the position of Resource Administrator for the School of Management. She was responsible for obtaining registrations for the hypothetical and that included answering telephone inquiries about the event and taking credit card bookings in advance of the event. Ms Ellmers was doing those things on the basis, as she understood it, that the hypothetical was open to the public. 20 Ms Ellmers was subject to direction by Ms McIver. 21 Ms Ellmers was contacted by Mr Rana by telephone at between 3.30 pm and 4.00 pm on 27 March 2006. She did not know Mr Rana and had not spoken to him before. 22 Mr Rana asked about the price for attendance at the hypothetical and Ms Ellmers told him that the full price was $45 per person. There was then a discussion about the discount available to alumni members of the University. Ms Ellmers obtained details of Mr Rana's name and telephone number. Ms Ellmers told Mr Rana that he could pay by credit card by providing his details to her, or by cash. Mr Rana did not wish to pay by credit card and he said that he would pay by cash. Ms Ellmers said that she would see Mr Rana at the registration desk at the Convention Centre where he could pay cash for his ticket. There was never any mention by Mr Rana of a desire or wish to purchase ten tickets. Ms Ellmers did not at any time refer to Ms Kellie Willason. She told Ms Ellmers that she was concerned about Mr Rana attending the hypothetical. At some point, she told Ms Ellmers that she would be denying Mr Rana entry to the event and that if he approached Ms Ellmers she should refer him to her. 24 Ms Ellmers left her place of work and arrived at the Convention Centre at about 5.00 pm. She went and sat at the registration desk at the Convention Centre. She saw a person, who Ms McIver later told her was Mr Rana, enter the Convention Centre. She saw Ms McIver have a conversation with Mr Rana and she was later told by Ms McIver that during the conversation she had told Mr Rana that he was not permitted to attend the hypothetical. Ms Ellmers said that the conversation was brief and not heated and that there were very few other people in the foyer. Mr Rana was alone and he left the Convention Centre alone. He was not escorted out by any other person. 25 Ms Ellmers was the only person who dealt with cash payments and the issuing of receipts. Mr Rana did not pay her any money and the receipt which he produced to the Court (discussed in [26] and [27] below) was not the type of receipt used for cash purchases of tickets for the hypothetical. 26 I have already summarised Mr Rana's case (as set out in the statement of claim) in relation to his telephone conversation with Ms Ellmers. In his affidavit sworn on 28 March 2006 (Exhibit A1) he repeats those allegations. In his affidavit sworn on 10 April 2006 he states that he sent the sum of $350 for the tickets to Ms Ellmers and that a receipt was given to "us" by her representative. He exhibits a copy receipt to his affidavit. The copy receipt is undated and is numbered 151719. It shows the purported payment of the sum of $350. I will refer to this document as the "copy receipt". 27 The University conducted a search in relation to a receipt numbered 151719. It called evidence, which I accept, of a search of the University records conducted by Ms Rachel Watherston, and the discovery of a carbon copy receipt numbered 151719 and dated 15 August 2002. That receipt relates to the payment by Mr Rana of the sum of $50 in relation to an "MBA Application 05888756741". I am satisfied on the evidence in this case that Mr Rana never paid any amount to the University in relation to the hypothetical. The copy receipt exhibited to Mr Rana's affidavit sworn on 10 April 2006 was, according to the evidence of Ms Ellmers, which I accept, not the type of receipt used by the University in relation to the hypothetical. Having regard to all the evidence in this case, I am satisfied that the copy receipt is a document Mr Rana prepared by making certain additions and deletions to the receipt dated 15 August 2002 or another copy thereof. Of course, that conclusion reflects very badly on his credit. 28 Mr Rana claims that after his telephone conversation with Ms Ellmers he sent an electronic message or email to Ms Ellmers and received a response and that he later (at about 3.00 pm) received a voice message on his message bank from Ms Ellmers. I do not accept that evidence because it is inconsistent with the evidence of Ms Ellmers as to what occurred on 27 March 2006 and her movements on that day. 29 In his affidavit sworn on 17 July 2006, Mr Rana refers to paying for the tickets at the "student admission office" and that Ms Ellmers had told him that he was to tell the cashier at the office that the payment was to be directed to Ms Kellie Willason. I reject that evidence. I accept the evidence of Ms Ellmers that she had only one telephone conversation with Mr Rana on 27 March 2006, and that she made no reference to Ms Willason or to payment at a place other than the Convention Centre. I also accept the evidence of Ms Kellie Willason that she was in no way involved with the hypothetical held on 27 March 2006. 30 There is more to be said about the topics of Mr Rana's allegations that he paid for tickets and of the events at the Convention Centre, but it is convenient to do that in the context of discussing the evidence of Ms McIver. I accept Ms McIver's evidence. 31 Ms McIver was employed by the University and she held the position of School Executive Officer in the School of Management. The School of Management was responsible for organising the registration and payment in relation to the hypothetical and Ms McIver was responsible for supervising this process. As she understood it, the hypothetical was open to members of the public who paid the required fee and it was a marketing exercise on the part of the University and its Division of Business. She was aware that Ms Ellmers was answering inquiries and taking registrations for the hypothetical. She went into Ms Ellmers' office at about 4.30 pm on 27 March 2006 and saw that Mr Rana had expressed interest in attending the hypothetical. A short time afterwards, Ms McIver went to the Convention Centre. At the Convention Centre she decided that she would not allow Mr Rana to attend the hypothetical. Mr Rana arrived at the Convention Centre at 5.00 pm. He was alone and there were very few people at the Convention Centre. There were no security guards or police officers present. 32 Ms McIver had a conversation with Mr Rana which lasted for only a minute or two. Mr Rana identified himself and said that he had come to register for the event. He did not mention anything about registering for other people. Neither party raised their voice during the conversation. Ms McIver could smell alcohol on Mr Rana's breath. 34 Mr Rana did not give any cash to Ms McIver and she did not see him give cash to anyone else. 35 Mr Rana left the building alone and although Ms McIver tried to contact the security office she could not get through. She did not call the police. 36 It will be recalled that in his statement of claim, Mr Rana alleged that he gave Ms McIver the sum of $350 for tickets. He repeated this assertion in his affidavit sworn on 28 March 2006. As I have said, in later affidavits his story changed and Mr Rana said that he paid the sum of $350 to the cashier at the "student admission office". In cross-examination, Mr Rana was asked to explain this apparent change in his evidence. His answer was incredible. He said that both accounts were true and that what he had paid to Ms McIver was a further sum of money. His evidence is not clear as to the quantum of the further amount he says he paid to Ms McIver. His version of events is incredible and I do not believe it. It is difficult to believe that Mr Rana would in effect pay twice, and very difficult to believe that Ms McIver would accept money from Mr Rana and then refuse him entry. As I have said, Ms McIver was an honest and straightforward witness and she said, and I accept, that she did not receive any money from Mr Rana. 37 It will also be recalled that in his statement of claim, Mr Rana said that he mentioned to Ms Ellmers that he wished to purchase ten tickets. For the reasons I have given, I do not accept that evidence. Nor do I accept Mr Rana's assertion (in his statement of claim) that he went to the Convention Centre with a party consisting of his family and friends. His evidence as to where his party of family and friends was at the time of his conversation with Ms McIver is unclear. I am satisfied that Mr Rana went to the Convention Centre alone. That was the evidence of Ms Ellmers and Ms McIver, and his evidence, when asked in cross-examination about the number and composition of his party, was most unsatisfactory. 38 The tenor of Mr Rana's evidence was that a number of security guards and police officers were involved in the events surrounding his departure from the Convention Centre. In addition to the evidence of Ms McIver that no security guards or police officers were involved, the University called Mr Richard Trevor Pieper, who was employed by the Adelaide Convention Centre as Security Manager. I accept Mr Pieper's evidence. Mr Pieper had dealings with the University's employees in relation to the hypothetical, although he said he is unable to remember their names. He spoke to an employee, probably Ms McIver, who told him she did not want Mr Rana to attend the hypothetical. He advised Ms McIver that as the individual had not yet paid for his ticket, she could refuse him entry to the hypothetical. Mr Pieper was not able to leave a member of his security staff at the hypothetical and he left Ms McIver with two numbers to telephone if there was any trouble. Neither his staff nor the external security service provider was contacted in relation to the hypothetical and neither was required to take any action in relation to the hypothetical. 39 I find that neither security guards nor police officers were involved in Mr Rana's departure from the Convention Centre. 40 As part of his case, Mr Rana tendered in evidence email messages which he asserts were sent to him after the hypothetical by employees of the University. The email messages are said by Mr Rana to contain admissions by the University. An email message from Ms McIver to Mr Rana, allegedly sent on 29 March 2006, which suggests that the University received the sum of $350 from Mr Rana in relation to the hypothetical (exhibit "D" to Mr Rana's affidavit sworn on 10 April 2006). 2. An email message from Ms Kellie Willason to Mr Rana, allegedly sent on 24 April 2006, which suggests that the University received the sum of $350 from Mr Rana in relation to the hypothetical and wished to return it (exhibit "A" to Mr Rana's affidavit sworn on 1 May 2006). 3. An email message from Ms McIver to "[email protected]", allegedly sent on 14 July 2006, making very serious allegations against Mr Rana (exhibit "Rana 4" to Mr Rana's affidavit sworn on 17 July 2006). Ms McIver and Ms Willason each denied sending the email said to have come from them. Mr Dronfield is employed by the University in the position of Information Technology Security Specialist. Although he has no formal qualifications in information technology, he has a good deal of practical experience. He has worked in the University's Information Technology department since 1978 and he has worked exclusively in the information technology field for more than 28 years. He states, and I accept, that the email messages referred to in 1 and 2 above were not sent from the University's email system, that they appear to have been sent from an email address which he identified and which suggests a link with Mr Rana, and that the face of the email message has been altered at the time of sending to make it appear that it originated from the University. He expressed the same conclusions in relation to the email message referred to in 3 above, save that he could not identify the source of the message. I accept Mr Dronfield's evidence. In my opinion, he had sufficient knowledge and experience gained from his employment in the field of information technology for approximately 28 years to conduct the investigations and express the views which he did. 42 Mr Rana sought to counter Mr Dronfield's evidence by giving evidence that he had closed his email account. Furthermore, he gave evidence that police officers had seized his computer and, when it was returned, the hard drive did not work. Mr Rana's evidence on these topics was very confusing and there is nothing in it to suggest that my conclusions as to the email messages are incorrect. I should say that I am satisfied from Mr Rana's cross-examination that he had not closed his email account at the relevant time. 43 The University employees previously referred to did not send the email messages and Mr Rana was the only person who had an interest in making it appear that they had done so. In light of the evidence which I have accepted, I find on the balance of probabilities that Mr Rana sent the three email messages referred to above. 44 My findings of fact reflect the evidence put forward by the University and I have rejected many of the factual assertions made by Mr Rana. Nevertheless, it remains necessary for me to consider whether the claims made by Mr Rana are made out having regard to the findings of fact which I have made. It is convenient to start with Mr Rana's claim based on an alleged breach of contract. He did not pay any money to the University in relation to the hypothetical. Ms Ellmers did not promise Mr Rana ten tickets or, indeed, any tickets. My findings as to the content of the conversation between Ms Ellmers and Mr Rana are set out in [22] above. In my opinion, Ms Ellmers did no more than provide information to Mr Rana. Those conclusions mean that Mr Rana's case in contract as pleaded must fail. 46 Nevertheless, it is appropriate that I consider whether it is possible to characterise the advertisement which appeared in The Australian newspaper on 27 March 2006 as one of those offers made to the public at large and capable of acceptance by the performance of an act which also constitutes the performance of the relevant contractual obligation. In this case, can it be said that there was such an offer, reinforced perhaps by the statements made by Ms Ellmers during her telephone conversation with Mr Rana, that Mr Rana accepted and performed by going to the Convention Centre and offering to purchase a ticket? In my opinion, the advertisement and the statements made by Ms Ellmers would not be understood by a member of the public as an offer which was to be acted upon and a reasonable reader of the advertisement would have understood that a member of the public would have no right of entry until a booking was made, or a person presented himself at the Convention Centre and actually purchased a ticket. Of course, even with a ticket, there may be terms, express or implied, enabling the University to deny entry to the ticketholder. 47 This case is distinguishable from Carlill v Carbolic Smoke Ball Co [1892] EWCA Civ 1 ; [1893] 1 QB 256 and the reward cases such as Williams v Carwardine [1833] EWHC J44 (KB) ; (1833) 5 C & P 566; 172 ER 1101; see also R v Clarke [1927] HCA 47 ; (1927) 40 CLR 227. In this case, having regard to the form and content of the advertisement, the reference to booking and the nature of the event, it cannot be said that there was an offer capable of acceptance merely by going to the Convention Centre and offering to purchase a ticket. In my opinion, the decision in Denton v Great Northern Railway Co (1856) 5 E & B 860; 119 ER 701 is distinguishable on the ground that the nature of a railway timetable is quite different from the advertisement in this case. Furthermore, it is commonly understood that the circumstances in which a train cannot carry a passenger are far more limited than the circumstances in which a member of the public is denied entry to an event such as that involved in this case. In any event, I prefer the reasoning of Crompton J in Denton v Great Northern Railway (supra) who doubted that the defendant was answerable in contract (5 E and B 867-870; ER 704-705). 48 Even if (contrary to my finding) there was a contract and a breach of contract, Mr Rana has failed to prove any loss or damage flowing from the breach. The failure to prove any loss or damage means that I do not need to consider whether the types of loss claimed by Mr Rana are, in law, recoverable. 49 As far as what might be called reliance loss is concerned, as I have said, I am satisfied that Mr Rana did not pay any money to the University in relation to the hypothetical and there can be no recovery on that ground. Furthermore, Mr Rana did not seek to establish any loss or damage suffered as a result of travelling to the Convention Centre in the expectation of being admitted to the event and there can be no recovery on that ground. 50 Mr Rana's claim for loss or damage by way of psychiatric injury fails because there is simply no proof of psychiatric injury. Mr Rana gave no evidence as to his psychiatric condition and he called no medical evidence. 51 Mr Rana's claim for loss of reputation and face, including humiliation and embarrassment, fails because, as I have said, I am satisfied that the conversation between Mr Rana and Ms McIver was a measured and relatively quiet one; that no one else was present during the conversation and certainly not any family or friends of Mr Rana, and that Mr Rana left the Convention Centre quietly and without an escort. He was not escorted out of the Convention Centre by security guards or police officers or, indeed, by anyone. Furthermore, Mr Rana was not emotionally distressed or, at least, not openly so. In fact, he had the presence of mind to calmly tell Ms McIver during his conversation with her that he would be suing the University. Mr Rana referred to the decision in Baltic Shipping Co v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, but there is no evidence of disappointment or emotional distress, even if it was otherwise an appropriate case for such an award. Furthermore, the University did not argue that its conduct on 27 March 2006 was not in trade or commerce. 53 The first question is whether any conduct of the University on 27 March 2006 was misleading or deceptive. As I understood Mr Rana's case, the conduct which he alleged was misleading or deceptive was the insertion of the advertisement in The Australian newspaper and the statements made by Ms Ellmers during her conversation with Mr Rana on the telephone. The contents of the advertisement are clear, and I have accepted Ms Ellmers' account of her conversation with Mr Rana as the correct one. 54 Mr Rana was denied entry to the hypothetical and it was this that led him to assert that the University's earlier conduct was misleading or deceptive. 55 Mr Rana's case was that the advertisement contained an implied statement or representation about entry to the hypothetical. In my opinion, the statements made by Ms Ellmers add nothing to the impression created by the advertisement. As I have said, Ms Ellmers did little more than provide information about the hypothetical to Mr Rana. 56 The University submits that any implied statement or representation in the advertisement was as to a future matter (ie entry to the hypothetical) and that there was no evidence that the University made any such statement or representation knowing it was untrue, or reckless as to whether it was true or false. It submits that, insofar as Mr Rana relies on s 51A of the Act to establish that such representation as was made was misleading, it has established that Ms Mansfield, who approved the final form and content of the advertisement, and Ms Ellmers, who made the statements she did, had reasonable grounds for making the implied statement or representation in that both had a genuine belief that the hypothetical was open to any member of the public who paid for a ticket. The University submits that it was another of its employees, Ms McIver, who made the decision to deny Mr Rana entry to the hypothetical and that this decision was made after Ms Ellmers' conversation with Mr Rana. It seems to me that this submission may raise some complex issues. Bearing in mind that Mr Rana was not represented and, therefore, I did not have the benefit of full submissions on both sides of the issue, and as I am able to decide the claim under s 52 on another ground, I prefer not to express an opinion on this submission. 57 In my opinion, neither the advertisement nor Ms Ellmers' statements during her telephone conversation with Mr Rana contained or gave rise to an implied statement or representation as to the right of a member of the public to attend the hypothetical. In saying that, I am directing my attention to the period prior to the purchase of a ticket. On purchase of a ticket there will be contractual rights and obligations between the parties. It is well established that even when a ticket is purchased, the right of a ticketholder, should there be a breach, is reflected in a claim for damages rather than a right to enter or stay on land ( Cowell v Rosehill Racecourse Co Ltd [1937] HCA 17 ; (1937) 56 CLR 605). In any event, in relation to the period prior to the purchase of a ticket, the advertisement or statements of Ms Ellmers do not contain or give rise to an implied statement or representation as to the right of a member of the public to attend the hypothetical. Clearly, there cannot be any implied statement or representation that there is an unqualified right because there might be any number of reasons why the organiser of an event might justifiably deny a person a ticket or entry to the event, ranging from the cancellation of the event or a full auditorium on the one hand, to disruptive conduct or inappropriate dress by the proposed attendee on the other. No reasonable reader of the advertisement or party to the conversation with Ms Ellmers would understand that, prior to the purchase of a ticket, any member of the public had an unqualified right to attend the hypothetical. To my mind, it is not possible to conclude that there is an implied statement or representation as to a right of a more limited nature, for example, a right to enter subject to a good reason to exclude, because there would simply be no unanimity, or even a majority view, as to the particular circumstances which would justify the exclusion of a member of the public. 58 Even if I am wrong in reaching the conclusions set out above and the University has contravened s 52 of the Act , Mr Rana's claim for damages under s 82 must fail because he has not proved any loss or damage within the provisions of that section. I need do no more than refer to my conclusions as to loss and damage in the context of Mr Rana's claim for breach of contract ([46]-[50]). 59 Mr Rana's claim for damages for an alleged contravention of s 52 of the Act fails. For this reason, his claim for an injunction should be refused. There are probably a number of other reasons why it would not be appropriate to grant the injunction sought by Mr Rana but, in the circumstances, it is not necessary to discuss those other reasons. I will hear the parties as to costs and any other orders. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | advertisement where respondent advertised event to public whether advertisement amounted to offer whether any payment made to respondent by applicant in relation to event whether contract arose whether any loss or damage established. misleading and deceptive conduct claim that respondent breached s 52 of the trade practices act 1974 (cth) applicant refused entry to event whether advertisement of event to public amounted to misleading or deceptive conduct whether statements made by employee of respondent to applicant amounted to misleading or deceptive conduct claim for damages under s 82 of the trade practices act 1974 (cth). injunctive relief injunction sought in relation to claims in contract and under trade practices act . contract trade practices remedies |
In the first (VID 713 of 2004) the applicant seeks orders that various assessments and notices of assessment are void. In the second (VID 1095 of 2006) the Commissioner seeks judgment against the applicant for amounts of tax alleged to be unpaid. (b) On or about 13 February 2003 the Commissioner posted to the applicant purported notices of assessment for each of the years in (a). (c) In making the purported assessments the Commissioner made no assessment of a kind authorised by s 167 of the Act. (d) In making the purported assessments the Commissioner did not attempt bona fide and in good faith to make any assessment of a kind authorised by s 167. (e) In making each of the purported assessments the Commissioner did not make an assessment other than a tentative or provisional assessment of an amount to be assessed. (f) In the premises each of the purported assessments was not authorised by s 167 , was not the result of a bona fide attempt to exercise the power in that section, and was the exercise of the power conferred by the section for an improper and collateral purpose. 4 The particulars relating to the 2002 year essentially repeat those in [3(a), (b) and (c)(i), (ii) and (iii)] save that in relation to the 2002 year the words "amounts of money" in (a) are replaced by "the Queensland Cash and amounts of money", and the words "total of those moneys" in (c) are replaced by "total of those amounts of Queensland Cash and bank deposits". In par (c)(iv) the words "to prevent ... Queensland Cash" are replaced by "to prevent the Queensland Cash from being returned to the applicant by officers of the Queensland Police". 5 Save to say that on or about 11 February 2003 he made default assessments of the applicant's taxable income under s 167 of the Act in respect of the relevant years, and on or about that date posted notices of assessment in respect of those years, the Commissioner denies the allegations in the statement of claim. (b) On approximately 21 April 2002, without the applicant's permission, the Queensland Police placed the money in a bank account. (c) On 30 November 2002 the Magistrates Court at Cairns dismissed all charges against the applicant. (d) The police appealed to the Cairns District Court against the dismissal of the charges. (e) A file note made on 21 January 2003 by Alan Saunders, a Tax Office employee, discloses that the applicant's address was changed on a bank statement from 84 Hamilton Street, Yarraville to 7 Burton Crescent, Maribyrnong in June/July 2000. (f) A file note made by Mr Saunders on 24 January 2003 records that he had been advised by his teamleader to ensure that garnishee action will be taken in respect of the money held by the Police, and that "Judge is to hand down a decision about the money being returned to Henderson on 12 February 2003". (g) An email sent by Mr Saunders to Rhonda Lynch (a Tax Office Accounts Receivable Officer) on 3 February 2003 records that "Assuming all goes well with the keying/processing the debt will be on the system by this Friday" (7 February 2003). (h) Also on 3 February 2003 the Commissioner requested a property search of the Yarraville property. (i) On 5 February 2003 the Commissioner issued a garnishee notice to the property officer of the Cairns Police Station requiring the officer, as a person who owes or may owe money to the applicant, to pay the sum of $919,051.50 to the Commissioner, or if the money in his hands was less than that, then the whole of the available money. (j) On the same day the Commissioner sent a letter to the applicant at the Maribyrnong address stating that s 167 assessments had been prepared and would be forwarded without further notice. The letter did not mention the garnishee notice. (k) On the same day the Commissioner sent a letter to the applicant at the Yarraville address informing him that the attached garnishee notice had been issued to the Police. (l) On 6 February 2003 the result of the property search sought in (h) was returned showing that the applicant had transferred his interest in the Yarraville property to his wife in August 1999, the consideration for the sale being "natural love and affection". (m) On 10 February 2003 the Queensland Director of Public Prosecutions made a successful ex parte application to restrain any dealings with the $620,000. (n) At 10:30 am on 11 February 2003 the applicant spoke to Gary Wicks, a Tax Office employee filling in for Mr Saunders who was on leave, who said he would chase up the file and ring back. (o) A file note made on 11 February shows that Mr Wicks rang the applicant back at 3:20 pm, the applicant was not available, and Mr Wicks left a message. (r) On 3 March 2003 Mr Saunders signed a document headed "Serious Non-Compliance Team Audit Case Plan Update --- Review Points" (the Audit Report). (b) On 25 July 2003 the Commissioner issued a writ in the Supreme Court of Victoria claiming $1,008,564.95. The action was later transferred to this Court where it became VID 1095 of 2006. (c) On 4 March 2004 the objections were allowed in part, and on 14 April 2004 the assessments were amended in accordance with the Commissioner's objection decisions, and notices of amended assessment were issued. (d) On 29 April 2004 the applicant applied to the Administrative Appeals Tribunal for review of the objection decisions under Part IVC of the TAA. (f) On 25 August 2005 notices of amended assessment were issued to the applicant to give effect to the Tribunal's decision. (g) The amount the Commissioner seeks to recover in VID 1095 of 2006 is the amount of the amended assessments. The result of its application is that s 175's protection from invalidity is applicable only if the purported 'assessment' (i) is 'a bona fide attempt' by the Commissioner or other authorised officer to exercise powers conferred by the Act , (ii) 'relates to the subject matter' of the Act and (iii) 'is reasonably capable of reference to' those powers. If a purported 'assessment' does not satisfy those three requirements, the protection of s 175 will be unavailable and the purported 'assessment' will be invalid. Judge is to hand down a decision about the money being returned to Henderson on 12 February 2003". (b) The garnishee action was taken on 5 February 2003 without there being any due and payable debt. The action was illegal: C lyne v Deputy Commissioner of Taxation [1981] HCA 40 ; (1981) 150 CLR 1 at 9. (c) According to Mr Saunders' note of 3 February 2003, the debt was intended to be on the system to support the garnishee notice on 7 February 2003. It is thus unlikely that this proposed debt was unrelated to the garnishee notice that issued on 5 February. (d) Further, it is unlikely that the issue of the assessments on 11 February 2003 was unrelated to the decision of the District Court as to the fate of the money, expected to be handed down on 12 February 2003. (e) None of the assessments was a bona fide attempt to assess income. Each was an attempt to justify an unlawful garnishee notice to prevent the return of money to the applicant the following day. It is "significant" that the garnishee notices were sent to the Yarraville address Mr Saunders knew had changed in June/July 2000. The sending of the notices to a different address to the letter sent to the Maribyrnong address on 5 February "is also a concern". It lends support to the view that the applicant was not intended to know of the garnishee notice served on the Police. (f) The purported assessments did not relate to the subject matter of the Act --- the assessment of income. Rather each of them related to the restraint of a sum of money that may have been returned to the applicant. It was "not by happy coincidence that the assessments were sufficiently high to fulfil the justification of the garnishee notice". (g) The observation in the file note of 3 February 2003 that "assuming all goes well with the keying/processing the debt will be on the system" on 7 February, suggests that the power to assess income was not the basis for the "keying/processing" of the debt, but the issue of the garnishee notice on 5 February 2003. This was supplemented in oral argument, which somewhat refined the applicant's claim of lack of a bona fide attempt. The essence of the applicant's case is that the assessment was not an attempt to assess income but an attempt to "justify" a garnishee notice designed to prevent the return of the money to him. The context shows that the word "justify" is used in the sense of ensuring that the total of the assessments would at least equal the amount in the garnishee notice. The Commissioner conceded that in computing the amount assessed for 2002 he had included two sums $31,141.62 and $255,571.52, totalling $286,713.14. The first was the amount of a cash deposit in the applicant's bank made on 21 February 2002. The second was the amount of a deposit on the same date made up in part by cash and the balance by cheque. The applicant relies on a "Notice of acquisition of an interest in land" relating to the sale by the applicant of land at Sunshine for $285,000 payable by a deposit of $28,500. The notice does not disclose the date of the payment of the balance, but the date of possession/transfer is given as 20 February 2002. That was one day before the two bank deposits referred to above. Those bank deposits were doubtless the consideration received from the purchaser. Indeed, when the applicant objected to the 2002 assessment, the Commissioner allowed the objection so far as it related to the $255,571.52 and part of the $31,141.62. The applicant contends that the Commissioner's inclusion of the two amounts in his computation for 2002 is "indicative of bad faith when you take into account the need ... to boost the assessable income in order to justify the garnishee". The Commissioner's letter of 5 February 2003 informing the applicant of the making of the s 167 assessments is headed "RE AUDIT: Years ended 30 June 1998 to 2002". Mr Saunders' file note of 21 January 2003 records that the applicant's bank statements disclose a significant number of deposits and withdrawals for large amounts with some transactions suggesting the purchasing of real property which is inconsistent with receipt of Centrelink benefits. The Audit Report is dated 4 March 2003. The police officer noted that the information was the result of a drug operation during which Mr [Henderson] was held with approximately $600,000 in his possession. It was decided to pursue a 'Proforma' assessment of the money in possession for the year ended 30 June 2002. Continue to obtain and analyse Bank account details to determine if action is warranted on other years. Obtain property searches in both Vic, NSW & Qld to determine if private expenditure correlates with known income. Prepare s 167 Submission and Issue Report based upon current information whilst awaiting full bank account statements and analysis. If time permits then revisit submissions to incorporate any changes identified through the analysis of the bank accounts. Liaise with Receivables staff about the issue of garnishees once s 167 action approved. Noting that the taxpayer uses several names and different banks. Section 167 submission approved and s 167 Assessments raised as per submission for approx $1,000,000. Approx $500 received from the banks. Awaiting outcome of both the court case and CMC restraining order in respect of approx $600,000. Garnishee in place to prevent return to Henderson. Follow up with NSW Specials about property searches. Maintain monitoring brief to ensure that CMC sends asset details. CMC restraining order runs out 12 March 2003 being 28 days after the court hearing on the 12 February 2003. Conduct another RP Data Property Search for Queensland under the various names and associates. Initial search revealed the purchase and sale of property at Miriam Vale but nothing else --- not all alias for both Henderson and spouse were known at that point in time. Complete a time line regarding Victorian sales and purchases with a list of names and compare with the bank account analysis major transactions. Determine if there is a correlation between these two sets of facts. Credits relating to one savings account total $206,538, all but one item relating to interest. The other item was a cheque deposit of $200,000, which a note describes as an "unexplained deposit". Credits relating to another savings account total $69,847, made up of cash deposits of $13,900, a cheque deposit of $55,616.83 and interest. These credits were all "treated as unidentified resulting in the Income Adjustment Increase of $69,847 being $331 for interest and $69,515 as unexplained deposits". 22 The Commissioner's list of credits to the applicant's bank accounts for the year ending 30 June 2002 total $363,463. Apart from interest of $61, the other credits were included in the taxable income as "unexplained". The total amount includes the two credits derived from the sale of the Sunshine property. 23 Other documents show cash withdrawals of $76,900 between March 2001 and February 2002. Bona fide attempt? As it turned out, two items were wrongly included in that income in the 2002 year. As I have said, the applicant successfully objected to that inclusion. But the fact that the Commissioner later accepted that he had erred in including these amounts does not establish that the assessment that contained them was not a bona fide attempt to assess the applicant's income. The applicant has not persuaded me that the Commissioner knew there was no substantial possibility that the amount he assessed was part of his assessable income. See the passage from Briglia set out at [12]. It may well be that the Commissioner was uncertain as to whether all the amounts he in fact included were truly income of the applicant, but that uncertainty does not show the absence of a bona fide attempt, as is pointed out in Futuris Corporation Ltd v Federal Commissioner of Taxation [2007] ATC 4600 at [44]. 25 Counsel for the applicant rather faintly suggested that the Commissioner's inclusion in the assessable income for the 2001 year of $200,000 and $55,316.83, both deposited on 7 July 2000, was indicative of a lack of a bona fide attempt. And that, your Honour might remember, is the same period of time that Mr Saunders notes the change of address on the bank statements and the cheques to solicitors and people of that nature, and postulates that those payments are associated with buying --- could be associated with buying a property and relocating. Now, the full title search of Hamilton Street wasn't available on discovery, and I don't say that by reason of an allegation against my friend or his instructor, but ... had the search been produced, we would be able to say with, as it were, firmness, that ... the garnishee had been sent to the wrong address. And I suppose it is an application of omnia praesumuntur against --- if that search was there and is subsequently not produced. Now, that, your Honour, is the material upon which the applicant asks for the adverse inference to be drawn against the Commissioner. In reply the applicant's counsel did not return to the topic. There is no basis for a finding of a lack of a bona fide attempt in relation to these two deposits. 27 For the foregoing reasons, the applicant's attack on the assessments in reliance on the inclusion of four amounts in the applicant's assessable income fails. 28 The applicant also relied in support of his lack of a bona fide attempt claim on the fact that the Commissioner was attempting to use an unlawful garnishee notice to prevent the return of the $620,000 to the applicant. That was how the matter was put in written submission. It goes to the bona fides of the entire transaction. Subdivision 260-A relates to collection from a third party. One is where the third party holds the money for or on account of the debtor. Sub-section (4) deals with the amount that is payable by the third party to the Commissioner pursuant to the notice. 30 The foregoing description of the garnishee provisions is sufficient to make clear that the power to issue a garnishee notice is conferred so as to facilitate the carrying out of the Commissioner's duty to recover tax revenue for the Commonwealth. 31 The Commissioner accepts that because notices of assessment had not been served on the applicant before the garnishee notice was given to the Police, the applicant was not at that time indebted to the Commonwealth, so that the garnishee notice was invalid. 32 In my view the fact that the garnishee notice was sent to the Police prior to the assessments being made does not demonstrate or contribute to demonstrating that there was no bona fide attempt to make assessments. It may show carelessness or fumbling under pressure. But I am not prepared to infer from the matters relied on by the applicant that the Commissioner intentionally took a course that resulted in the garnishee notice being ineffective. In any event, the invalidity of the garnishee notice had no effect on the assessments themselves, which were later served. 33 The other aspect of the submission recorded at [28] seems to be that there was something wrong about the Commissioner's use of the garnishee notice to prevent the applicant gaining possession of the money. There is no doubt that was the Commissioner's aim. That is clear from the Audit Report which mentions the garnishee in this connection in several places, in particular --- "Garnishee in place to prevent return to Henderson". However that purpose does not establish that the assessment was made for an improper purpose or was not a bona fide attempt to make an assessment. Central to the "subject matter" of the Act is the recovery of tax. The Commissioner discovered from the Police that the applicant was in possession of a large sum of money that the Police had deposited in a bank. The Commissioner obviously believed that the money was the product of activity on the applicant's part that made him liable to pay income tax. The Commissioner did not want funds out of which the tax, when assessed, could be taken to get back to the applicant, for fear that it would no longer be traceable and available to the Commissioner. The purpose of the ineffective garnishee notice was to stop the Police releasing the funds to the applicant. 34 That the Commissioner's use of the garnishee process to prevent the return of the money to the applicant does not demonstrate the absence of a bona fide attempt is supported by the Full Court's decision in Madden v Madden (1996) 65 FCR 354. In that case the taxpayer was arrested and charged with conspiracy to supply heroin. Thereupon the Commissioner assessed him to income tax on the sale value of the heroin. The sale value had been notified to the Commissioner by the police. The taxpayer's application to have the assessment set aside on the ground that it was not made bona fide was dismissed. It may be said, then, that evidence has been adduced showing that the Commissioner was motivated, in raising the assessment, by a desire to take possession of the money. There is sufficient indication of urgency in the situation to warrant the steps that were taken. In my opinion, the s 218 connection is a purely neutral fact in the determination of whether the assessment itself was invalid. It was a substantial sum, and was adequate to provide a foundation for a default assessment in the circumstance in which the assessment needed to be issued. He concluded that conformably with the principles in R v Deputy Commissioner of Taxation (WA); Ex parte Briggs (1987) 14 FCR 249, the Commissioner was entitled to use the figure provided as a basis for the assessment. It "could well be erroneous, but it was nevertheless bona fide". 36 I do not attribute any significance to the sending of the garnishee notice to the applicant's former address. I do not accept the applicant's contention that the person who sent the copy notice to the wrong address did so in order that the applicant would not know it had been served on the Police. Mr Saunders, who knew of the changed address, was on leave at the crucial time, and the officer who acted in his absence was probably unaware of the change. 37 Other cases that have found a lack of a bona fide attempt are in marked contrast to the present. It is true that he did not know all the facts but, doing the best he could on the facts he did know, he made assessments. That they did not wholly survive review by the Tribunal does not establish the lack of a bona fide attempt: Madden at 396 and Briglia at [9]. 38 Futuris is also distinguishable. There the Commissioner knew, at the time he issued the assessment, that the taxpayer's taxable income could be no greater than $169 million, yet he issued it for a taxable income of $188 million. He relied on Kordan Pty Ltd v Commissioner of Taxation [2002] FCA 1807 at [47] to [51] and Weissensteiner v The Queen [1993] HCA 65 ; (1993) 178 CLR 217 at 225-229. This reliance on Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 is misplaced. Put another way, the failure to call evidence does not provide positive evidence, nor does it fill up any gap in the evidence. What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts 'requiring an answer'. It 'cannot be used to make up any deficiency of evidence': Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 at 312 per Menzies J. 40 The attack on the assessments fails. Accordingly the Commissioner is entitled to judgment for $121,068.01. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | notices of assessment validity whether bona fide attempts by commissioner to assess income invalid garnishee notice served by commissioner whether invalidity establishes lack of bona fide attempt income tax (cth) |
2 The appellant was made bankrupt on 4 September 2000 pursuant to a debtor's petition. Mr Morton, who is not a party to these proceedings, was appointed trustee ('the trustee'). The trustee, by a notice dated 24 January 2003, objected to the discharge of Mr Trkulja from bankruptcy pursuant to ss 149D(1)(d) , 149D (1)(n) and 149 (1)(b) of the Bankruptcy Act 1966 (Cth) ('the Act'). In a further notice dated 3 September 2003, the trustee objected to the discharge of Mr Trkulja from bankruptcy pursuant to ss 149D(1)(c) , 149D (1)(b) and 149D (1)(f) of the Act. The trustee also issued an income contribution assessment in relation to the appellant for the period 4 September 2000 to 3 September 2001. 3 The second respondent in two decisions dated 16 September 2003 and 24 October 2003 ('the objection decisions'), affirmed the decision of the trustee to file the notices of objection. However, having reviewed the income contribution assessment of the trustee, the second respondent issued a fresh income contribution assessment ('the income contribution decision'). 4 The AAT varied the objection decisions of the second respondent by setting aside those parts of the second respondent's decisions which affirmed the grounds of objection to discharge under ss 149D(1)(n) , 149 (1)(b) and 149 (1)(f). In all other respects, the second respondent's decisions, including the income contribution decision, were affirmed by the AAT. The appealable error of law must arise on the facts found by the Tribunal or must vitiate the findings made or must have led the Tribunal to omit to make a finding it was legally required to make. A wrong finding of fact is not sufficient to demonstrate error of law'. By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject-matter, scope and purpose of the Act. Given the history of Mr Trkulja in failing to provide information, failing to maintain financial records, his evasiveness, and, at times, contradictions when under examination and speaking in generalities rather than specifics at the hearing, his evidence cannot be accepted. I am satisfied that his income in the relevant period was in excess of that claimed by him to be income in his statement filed with the trustee and the respondent. On the other hand, I am satisfied that the trustee's assessment, on the basis on which it was calculated, was excessive. I am inclined to agree with the respondent that, if anything, the respondent's assessment was likely to have been low. Nevertheless, the respondent's assessment was based on a signed application for credit by Mr Trkulja, albeit at a time prior to his bankruptcy and the commencement of the contribution assessment period. I acknowledge that, pursuant to s 139X of the Act, the trustee may disregard information provided by the bankrupt and make an assessment on the basis of what the trustee consider to be the correct information where he considers the information provided by the bankrupt is or may be incorrect. However, I do not believe that this empowers the trustee to simply add up the total expenditure of the bankrupt during the period and assume that it represented income. Given the circumstances of this case, I am of the view that the respondent's assessment should be affirmed on the basis that there was little or no change in Mr Trkulja's circumstances between March and May 2000 and September 2001. Consequently, the decision in relation to the income contribution assessment should be affirmed. The weight accorded to the evidence before the AAT was a matter for the AAT. 13 Similarly, the stated income of the appellant on a credit card application could not be said to be an irrelevant consideration as described in Peko ; rather, it would seem to be directly relevant to the very question before the AAT. In reality, the appellant is seeking to re-litigate facts determined by the AAT. It follows that the appellant fails on this ground of appeal. In affirming the second respondent's decision on this ground of objection, the AAT set out a number of paragraphs from the second respondent's statement of facts and contentions filed in the AAT proceeding. The supporting documentation was provided to the Tribunal. It is clear that the AAT had before it, and based its decision on the s 149D(1)(d) objection upon documentation and direct documentary evidence relevant to that issue. The AAT was not bound by the rules of evidence (see s 33(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth)) and was entitled to act on the material before it, including hearsay evidence. However, the evidence showed that the trustee believed that the information provided by Mr Trkulja was either incorrect or inadequate. On 12 June 2001 the trustee executed a search warrant issued by the Federal Court of Australia under s 130(2) of the Act. A further search warrant was executed on 15 August 2003. Documents so obtained included banking records and credit card records not previously disclosed by Mr Trkulja and details of business undertakings, particularly in relation to Fox Video. Both search warrants were executed well after Mr Trkulja had been requested in writing for information and had failed to do so. It is clear that his response of 15 March 2001 failed to comply with the requests and was prepared when he had full access to his records. Again, I am satisfied that there is sufficient evidence to support the grounds of objection under s 149D(1)(d) of the Act and that Mr Trkulja has failed to establish that he had a reasonable excuse for failing to comply with the request to provide information. Accordingly, it must follow that this ground of appeal also fails. 19 The appellant has not made out either of the grounds of appeal before this Court. Accordingly, the appeal is to be dismissed with costs. | appeal from decision of aat income contribution assessment whether aat took into account irrelevant considerations objection to discharge pursuant to s 149d(1)(d) whether aat relied upon hearsay evidence bankruptcy |
2 The application was supported by two affidavits of Mr Edward Davies of the plaintiff's solicitors. From those affidavits and the submissions of Mr Davies the following is apparent. The defendant is incorporated and carries on business in the United Kingdom, but not Australia. The plaintiff is the owner of a vintage Vauxhall motor car made in 1921. The car was purchased in 2001 by the plaintiff for $180,000. As a member of a club, called the Vauxhall Owners Club, the plaintiff was invited to participate in a trial in the United Kingdom in 2003 to celebrate the centenary of production of Vauxhall motor cars. A member of the club, a Mr Seymour, organised the transport of the club's members' cars to and from England. A freight forwarder called Vantage Freight Services Pty Ltd issued an outward multimodal transport bill of lading from Sydney to Tilbury which bill evidenced the outward contract of carriage. A company called Planetwide Limited ("Planetwide") was responsible for the transportation of the cars (including the plaintiff's car) on the return journey from England to Australia. Planetwide issued a multimodal transport bill of lading covering the carriage of the cars on the return trip. The substantive transport link between Australia and England and return was sea-carriage. In respect of the return carriage, the plaintiff was told to deliver his car to the defendant as agent for Planetwide at the defendant's premises in Kent. He did so on 15 July 2003. At the time of delivery, and after he was informed that it was intended that the car be driven into the container in which the car would be carried to Australia by sea, the plaintiff told representatives of the defendant that it would not be wise to drive the car into the container and that it should be pushed in. Nevertheless, he did give one employee of the defendant some instruction on driving the car if that course were to be undertaken. On the following day, a different employee of the defendant attempted to drive the car into the container. Unfortunately, he so drove the car that it collided with the container causing substantial damage to the car. The car was then loaded in a damaged state. Repairs were undertaken in Australia which cost A$32,037.23, being the sum claimed. 3 On being taxed with these facts in January 2007 by the solicitors for the plaintiff, solicitors for the defendant in England asserted a time bar based on the terms and conditions said to have governed the undertaking of the work by the defendant. These terms and conditions (the United Kingdom Warehousing Association Terms) provided for a bar on any proceedings unless issued and served within nine months of the event giving rise to the claim. 5 Attached to one of Mr Davies' affidavits was a letter from the defendant itself. That letter permits the following to be stated. First, the letter asserted that the defendant was contracted by Planetwide. Secondly, it was accepted that the car was taken into the possession of the defendant. Thirdly, it was accepted that the employee who drove the car lost control of the motor vehicle, hitting the container. Fourthly, it was confirmed that the vehicle was in good condition when the vehicle was delivered to the defendant, roadworthy and driveable. Fifthly, it was accepted that the plaintiff had instructed a member of the defendant's staff, other than the person who drove and damaged the car, on the appropriate driving techniques for such an old car. 6 It can be concluded that the defendant had possession of the car as either a bailee or sub-bailee. Also, subject to any particular term of the contract or relationship, the defendant would bear the onus of proving that it exercised reasonable care in the possession of the car. This would be a matter of English law, but I do not understand that there would be any issue about this. 7 There is, however, no specific information (other than the conclusory assertion of the defendant's solicitor) available to the Court, or apparently to the plaintiff, as to whether Planetwide and the defendant contracted on the basis of the United Kingdom Warehousing Association Terms. It does not appear that these standard terms and conditions were given to the plaintiff by the defendant. 8 The first matter that needs to be addressed is whether or not there is a ground for asserting that this Court has jurisdiction in respect of the matter. First, this a claim in the Admiralty jurisdiction of the Court. The claim is one under s 4(3)(e) or (f) of the Admiralty Act 1988 (Cth) ("a claim for loss of or damage to goods carried by ship or a claim arising out of an agreement that relates to the carriage of goods or persons by a ship..."). The car was being loaded into a container preparatory to sea carriage under a multimodal bill of lading. There is a basis to assert that the jurisdiction of the Court, in the sense of subject matter jurisdiction, is attracted. Section 5(1) of the Admiralty Act provides, relevantly, that the Act applies in relation to all maritime claims wherever arising. It is necessary, however, in relation to an in personam claim, for the defendant to be either present in the jurisdiction and thus amenable to service, or for some ground for service out of the jurisdiction under Australian law to apply. 9 Under Order 8 rule 2 of the Federal Court Rules , an originating process may be served on a person in a foreign country in a proceeding which consists of, or includes, any one or more of the kinds of proceeding mentioned in the table in that rule. The table includes reference in item 5 to a proceeding based on, or seeking the recovery of, damage suffered wholly or partly in Australia caused by a tortious act or omission (wherever occurring). 10 It is clear from a number of cases in New South Wales decided in the 1980s on a cognate rule that damage in this rule does not mean the injury which completed the tort, but rather it means the disadvantage or detriment suffered by the plaintiff as a result of the tortious act or omission of the defendant. In this respect the word "damage" in this context has a wider meaning than injury: Brix-Neilsen v Oceaneering Australia Pty Ltd [1982] 2 NSWLR 173; Challenor v Douglas [1983] 2 NSWLR 405; Flaherty v Girgis (1985) 4 NSWLR 248 (the contrary proposition was not pressed in the High Court where the debate concerned constitutional questions: Flaherty v Girgis [1987] HCA 17 ; (1987) 162 CLR 574). These cases concerned personal injury where a degree of personal suffering or expenditure had been suffered or made in New South Wales, the tort having wholly occurred in another State. The same logic was applied to property cases in the cargo claim matter of Darrell Lea Chocolate Shops Pty Ltd v Spanish-Polish Shipping Co Inc (The 'Katowice II) (1990) 25 NSWLR 568 and see also Colosseum Investment Holdings Pty Ltd v Vanguard Logistic Services Pty Ltd [2005] NSWSC 803 at [40] - [50] . 11 This approach may be recognised as wider than the operation of Art 5(3) of the Brussels Convention: see Marinari v Lloyds Bank Plc [1996] QB 217 and Mazur Media Ltd v Mazur Media GmbH [2004] 1 WLR 2966 at 2973-2974 [23]-[26]. Nevertheless, the English Civil Procedure Rule 6.20(8)(a) which provides for service out of the jurisdiction in respect of "a claim made in tort where --- (a) the damage was sustained within the jurisdiction" was construed by Nigel Teare QC, sitting (as his Lordship then was) as a deputy High Court judge, in Booth v Phillips [2004] 1 WLR 3292 at 3298-3300 [32]-[44] in a manner informed by, and consistently with, Flaherty v Girgis 4 NSWLR 248. There is a similar rule in the Singapore Civil Procedure Rules (Order 11 rule 1(f)(ii)). The rule appears to be interpreted in a way conformable with the Australian cases and Booth v Phillips [2004] 1 WLR 3292, see Selvam GP, Singapore Civil Procedure 2003 (Thomson) pp 98-99 at [11/1/29]. As to Hong Kong, see Hong Kong Civil Procedure Rules Order 11 rule 1(1)(f) and Chan P, Hong Kong Civil Procedure 2006 pp 113-114 at [11/1/28]. These cognate approaches do not govern the interpretation of Order 8 rule 2 of this Court's Rules. They do reveal, however, that the approach in Australia in the cases to which I have referred and which I have followed are not outside well-known parameters of the exercise of power to serve foreigners outside the jurisdiction. 12 On the proper construction of Order 8 rule 2, damage was suffered in Australia within the meaning of the rule and the proceeding is one under which an order can be made under Order 8 rule 2 for service in the United Kingdom. The question arises then whether the power should be exercised. The relevant clause of the conditions of contract, if binding, may well be such as to raise a time bar. However, there is no material upon which it can be presently concluded that the relevant terms and conditions governed the relationship between either the defendant and Planetwide or the defendant and the plaintiff. In correspondence, the solicitors for the defendant have raised the issue of the applicability of The 'Pioneer Container' [1994] 2 AC 324. The question of the applicability of this case in circumstances where there is a quasi-bailment (that is when a company in the position of Planetwide does not obtain actual possession) may be debatable. I express no view on that. However, even if The 'Pioneer Container' [1994] 2 AC 324 is potentially applicable, its application would need to be grounded evidentially in the incorporation of the relevant terms as governing the relationship between Planetwide and the defendant in circumstances that would bind the plaintiff. 13 Looking at the statement of claim there appear to be more than ample grounds to come to the view that there was a bailment and some real question as to whether there was due care in the handling of the goods. The time bar may be made out as a matter of defence, but it is not self-evident that such a plea, if or when made, would succeed. 14 The claim is a small one. The plaintiff wishes to bring the matter before the Court. The defendant has not, in the opportunity that has been given to it, provided material which would make clear the basis upon which it contracted with Planetwide. Nor has it made clear the precise basis upon which the plaintiff will be bound by these terms and conditions, beyond an assertion of the applicability of The 'Pioneer Container' [1994] 2 AC 324. 15 Further, the governing law clause, which I have set out above, appears to be limited in its own terms to contracts. I am not clear as to whether the defendant will assert that there was a direct contract between the plaintiff and it or whether it will be said that on its proper construction the clause is wide enough to extend to non-contractual bailment counts supported by cases such as The 'Pioneer Container' [1994] 2 AC 324. On what is before the Court, the governing law clause is not a basis to conclude that leave should not be granted . 17 England is not a Convention country. Leave be granted to the plaintiff to serve the application and statement of claim in this proceeding on the defendant in the United Kingdom. 2. 3. The proceeding stand over for directions to 9.30 am on 8 June 2007 in Sydney. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop J. | practice and procedure service out of the jurisdiction damage suffered wholly or partly within australia for item 5 in table accompanying order 8 rule 2 admiralty and maritime jurisdiction |
In 1979, they employed the applicant, Ms Josie Sperandio, then aged 17, as a receptionist. The applicant remained so employed until 2001, when she was appointed to the position of Practice Manager, in which position she remained until dismissed from her employment in circumstances described below. We greatly appreciate the years that you have served us well and we have over those years considered you a friend. We believe that you have excellent skills and will readily find employment elsewhere. We had anticipated that you would as discussed settle back after holidays and long service leave into the position of trust and responsibility that you once experienced. We have asked you to meet and discuss the issues of concern and possible resolutions but have received no response to this request. We now offer you a final opportunity to contact us to discuss your entitlements in the next five working days. I consider that the letter did have that effect. 3 In this proceeding, the applicant alleges that the termination of her employment was done either by reason of her temporary absence from work because of illness or injury or by reason of her physical or mental disability and was, therefore, in contravention of s 170CK(2) of the Workplace Relations Acts 1996 (Cth) (as the relevant provision was numbered at the time). She also alleges that the respondents had no legitimate basis for summary termination, and that she should have been given reasonable notice of the respondents' intention to terminate her employment, which she fixes, in the circumstances, at 24 months. The respondents deny that the applicant was dismissed by reason of her temporary absence on sick leave, or by reason of any physical or mental disability, and say that she was dismissed for the reasons stated in their letter dated 4 March 2005 as set out above. They assert that they were entitled to dismiss the applicant from her employment summarily, but if they were not, they contend that the applicant was employed on a fixed-term contract which would have ended on 25 October 2005; or, if the question of reasonable notice arises, that the applicant was entitled to no more than about five or six weeks in the circumstances. In 2003, they decided to move the practice to a new clinic which they proposed to establish in High Street, Northcote --- a move which eventually took place on 25 October 2004. For the respondents, the move would involve both an expansion in the size and turnover and the practice and, it appears, a significant modernisation in their methods of operation. Dr Sandra Lynch said that the move involved a huge financial risk for them. The respondents were concerned that the skills of their staff in a number of respects were less than would be required at the new clinic. This related in part to the ability to operate with the new practice management computer system which was proposed for High Street, and in part to what was referred to as customer relations. By 2004, the respondents had their concerns about the applicant in particular in each of these respects. Dr Sandra Lynch expressed the view that the applicant was a good receptionist, but, notwithstanding that she had been appointed the Practice Manager, did not do any actual practice management, which was done by Dr Lynch herself. Dr Lynch gave as an example that she drafted her own letters and spent many hours in administration. 5 About 12 months before the proposed move, Dr Lynch engaged a consultant to assess the skills of the existing staff, to talk to them about their concerns, to identify what up-skilling procedures were necessary and to institute change. Dr Lynch engaged consultants to provide training for the staff. One of them, Ms Paula Febey (to whom I shall refer again later) provided instructions on customer relations. The focus of these training sessions and generally in the practice was, according to Dr Lynch, that "this was a new place, ... a different standard --- a higher standard of professionalism was required. " The respondents alleged that the applicant had, in the past, refused to undertake training to improve her skills, and that it was only very late in the piece in 2004 that she undertook some training in relation to the new methods proposed for High Street. The exact extent of the applicant's co-operation in this and similar respects was never satisfactorily resolved as a matter of evidence. However, I infer from the whole of the evidence that the proposed move to High Street was an event of such significance for the respondents, and was such a preoccupation for them by about mid-2004, as to sharpen their underlying concerns as to the applicant's general level of competency to perform at the higher levels of efficiency that would be required in the role of Practice Manager. Likewise the applicant, I infer, felt herself under somewhat greater pressure in her job as a result of the higher expectations that the respondents had of all the staff at the practice, and the sense of anticipation which pervaded the practice about the move to High Street. 6 In mid-2004, the applicant consulted Dr Sandra Lynch professionally. Dr Lynch found the applicant to have high blood pressure and referred her to a consultant physician, Dr Stewart. In her report to Dr Lynch dated 7 July 2004, Dr Stewart noted that the applicant had complained of headache, light headedness and fever, and was found to be hypertensive. Dr Stewart's report referred to a number of tests which she had caused to be conducted, and concluded that the applicant had "recent sustained hypertension", and other conditions. Dr Stewart provided further written reports to Dr Lynch on 20 July, 3 August, 24 August and 14 September 2004. No further reports were made by Dr Stewart to Dr Lynch in relation to the applicant. There is nothing in the evidence which would justify the conclusion that the applicant's medical condition over these months was particularly related to any pressures which she may have been experiencing at work. However, the applicant's own comment about her well-being at the time of her first consultation with Dr Stewart in July 2004 was that she was tired, and was under a lot of stress, because they were trying to get everything organised. She meant, I take it, "organised" for the move to High Street. 7 In the circumstances obtaining at the St Georges Road clinic in about the second half of 2004, including those to which I have referred, the general state of the relationship between the applicant and the respondents was not a happy one. For their part, the respondents say that the applicant was becoming increasingly negative, surly, unco-operative and resistant to change. For her part, the applicant says that Dr James Lynch in particular was not being very pleasant towards her and the other clerical staff. Some of the issues which were of concern to her in this respect arose in the context of the particular matters which, according the respondents, led to her dismissal in the following March. It is to those matters that I shall now turn. He said that she should stop doing that, and asked her to instruct the other staff members to stop doing that, because the patients who reported it were disturbed and distressed by the practice. Some Italian-speaking patients who had heard the applicant had told Dr Lynch that they would never return to his clinic while the applicant was there, because they had heard her talking about other patients in Italian. Dr Lynch told the applicant that the practice was insulting and offensive to the non-Italian-speaking patients. 9 Dr Sandra Lynch also gave evidence on this subject. She had had complaints from patients that the Italian receptionists were conversing about the doctors or the patients in a derogatory manner. She said that the complaints came from Italian patients who could understand what they were saying. She said she counselled the applicant several times, and instructed her that she was not to speak in Italian with the other receptionists, other than to communicate with Italian patients. Under cross examination, Dr Lynch said that although there were a number of Italian-speaking staff members who conversed in Italian in the way she described, none (other than the applicant) was dismissed for it. 10 It was the applicant's alleged practice of conversing in Italian that constituted the 'disruptive workplace practice' referred to in item 2 on the respondents' list of reasons for dismissing the applicant as stated in their letter of 4 March 2005. 11 The applicant accepted that she had been counselled not to speak in Italian with other Italian-speaking staff members while members of the public were in the waiting room, but said that this had occurred only once, and denied that the counselling related to her speaking derogatively about patients and other doctors. When the matter was put to the applicant under cross examination, she was, to my observation, somewhat evasive about it. It was clear that it had not previously occurred to her that item 2 in the respondents' letter of 4 March 2005 related to her conversing with other staff members in Italian. One could be sympathetic with the applicant in that regard, since the item gives no hint of the subject with which it is concerned. 12 It was submitted on behalf of the applicant that the conduct with which item 2 is concerned was "hardly worthy of dismissal", and that that conduct had not been the subject of any written warnings. I agree that merely to converse with others in Italian (ie where no question of a failure to obey an instruction was involved) would not justify summary termination. I allow for the possibility that the subject matter of what a person in the applicant's position might have said in the presence of patients might be such as to warrant summary termination, but the evidence in this regard was of the broadest and most imprecise nature, the result of which was that I could make no finding against the applicant based on the content of what she actually said. Neither could I make any finding that she either disobeyed a direct instruction or persisted in unwanted behaviour after counselling. I do, however, accept that the practice of speaking in Italian to other Italian-speaking staff members, and of doing so on subjects which included some patients and practitioners, had been reported to the respondents, and that they were concerned about it. I accept that they counselled the applicant about the matter. This related to Medicare payments that were due to the practice. Dr Lynch said that the applicant was the only one who seemed to have any knowledge of the program. She said that she either ignored her request or "simply refused". Dr Lynch was very anxious about what was outstanding because, with the forthcoming move to High Street, that program was going to be closed down. She was being pressed by the accountants for this information, and she was getting no response from the applicant. Dr Lynch said that the issue remained after the move. They had to keep the old computer program running, because there was income coming in that had to be adjusted and marked off. She said that the applicant "was attending to it when she could". 14 Some time after the termination of the applicant's employment on 4 March 2005, Dr Sandra Lynch employed someone to look at the data generated by the computer program that had been used at St George's Road. Dr Lynch said that this person discovered about $120,000 of outstanding bills at that clinic. Dr James Lynch, who referred to the total amount involved as being about $100,000, said that, by the time they identified the error, they were able to recover only about $7,000. The remainder was written off as bad debts. 15 At one point in her evidence, Dr Sandra Lynch said that, at St Georges Road, the applicant did not actually do any of the practice management --- that was done by Dr Lynch herself. The applicant simply followed her instructions. When reminded of this in the context of her being critical of the applicant in relation to her failure to provide a printout of Medicare accounts owing, Dr Lynch said that the applicant had a job description which said that she was responsible for the Medicare batching, for the billings, for the accounts, for WorkCover, for sending off accounts for billing patients, for making appointments for patients, and for carrying out reception duties. She said that the applicant, although supposed to do all of those things, could not draft a letter, could not "administrate", and could not "carry out any of the normal business activities of taxation, whatever". 16 The applicant accepted that she had been asked to provide a printout of the outstanding accounts, but insisted that that request was made only after the practice moved to High Street, and then she was unable to comply because the printer was out of order for some weeks. When this point with raised with Dr Sandra Lynch in cross examination, she responded that the computer itself was still working. 17 I accept much of the respondents' case on this aspect. I accept that the applicant had failed to comply with the requests of Dr Sandra Lynch to provide a printout of the amounts owing from Medicare. Since I find that this occurred substantially while the practice was at St Georges Road, the applicant's excuse (that the printer at High Street was not working) should not be regarded as acceptable. I am not, however, persuaded that the applicant acted wilfully in these respects. It is more likely that this was an example of the generally poor standard of work which the respondents were experiencing from the applicant. 18 I am not satisfied, however, that the loss of income which the respondents claim to have suffered --- the difference between $120,000 or $100,000 and $7,000 --- should be laid at the feet of the applicant. As her counsel pointed out, the respondents' case in this respect was broad and general in the extreme. It involved no calculations, no hard data, no books of account, and generally no precision. How the failure to produce a printout should lead to the permanent loss of moneys legitimately owing from a government body was unexplained. There was no attempt to demonstrate how, as a matter of law, the amounts had become "bad debts" by the time a proper audit was conducted in the first half of 2005. 19 The issue arises under item 3 in the respondents' letter of 4 March 2005. While I would not resist the suggestion that there was some degree of incompetence involved on the applicant's part, I am not prepared to accept that the respondents' loss of income has been either established as a fact in any satisfactory way or, to the extent that it did occur, sheeted home to the applicant as a matter of causal responsibility. When the previous cleaners left, apparently at the applicant's suggestion, a receptionist employed by the respondents to whom the applicant was fairly close, Ms Cundari, was engaged to clean on Saturdays because she wanted the extra money. Dr Lynch said that she complained to the applicant several times about the standard of Ms Cundari's cleaning. Dr James Lynch said that he told the applicant that, even though he was paying time and a half for Ms Cundari to do the cleaning, he was not getting value for money. 21 When the practice moved to High Street, new contract cleaners were engaged. At some point, it seems, the applicant told Dr Sandra Lynch that she did not think that the new cleaners were doing an adequate job. The applicant gave evidence that she discussed the poor standard of the new cleaners' work with two other members of the staff (including Ms Cundari). She said that Dr James Lynch overheard that conversation, as a result of which he wrote her a note dated 31 October 2004, shortly after the move to High Street. Whether or not because of having overheard the conversation --- a matter to which Dr Lynch did not refer --- the fact is that he did write such a note to the applicant. Please make them welcome. They are part of my plan for this complex. They are professional and will do an honest job. If you look at the dust and dirt at [St Georges Road] you can see why I would never consider [Ms Cundari] again. She took my money at time + 1/2 on a Saturday and the place is filthy . I know she needed the money but did you really think I didn't notice. I hope her standard of work improves over the next 3 months. All the new staff have the skills that I need at High St, this is a different organization to [St Georges Road] and I need happy bright enthusiastic people, not grumpy lazy ones who don't think I notice that they have not improved their skills at all. Please make all the new staff welcome because they will stay. He said that he told the applicant that he felt it was totally unprofessional, unconscionable and inappropriate for her to have allowed Ms Cundari to see the note. Dr Lynch thought that the applicant was creating an issue with a view to having the new contract cleaners terminated. He said that he made it clear to her that that would not happen, and, according to him, "she was sullen and walked off". 22 The issue concerning the cleaners was not relevant in the respondents' termination letter of 4 March 2005. It was, however, typical of the direction which the relationship between the applicant and the respondents was taking at about that time. It was an example of Dr James Lynch not being very pleasant, as the applicant claimed. It was also an example of the applicant's sullenness, as the respondents claimed. She said that the applicant was not responding to counselling or requests to improve her behaviour. Dr Lynch rang the industrial relations officer at the Australian Medical Association, and was told that, if the applicant was not following instructions, if her behaviour was not improving, or if she was not responding to Dr Lynch's requests, then she should be issued with warnings. You have been over the last 25 years a most loyal and trustworthy employee. This relationship has deteriorated over the last six weeks and trust between us is eroded. We document the following concerns. You were unable to induct new staff in a professional, responsible and timely manner. 2. You have demonstrated a lack of understanding of simple billing procedures in place for at least 12 months which when documented and checked by Dr Sandra Lynch revealed significant income loss in one 24 hour period. 3. You have failed over the last few years to undertake appropriate training to maintain your skills to a level now required by your job description. Computer training to improve your skills has been offered and has been readily available upon request at the divisions of general practice. We have no knowledge or documentation that you have taken advantage of any computer training over the last 2 years apart from recent training for the new computer program at Doctors of Northcote. We acknowledge that you have made some effort over the last 12 months to attend training/information evenings offered. As we had not received word or notice that you were happy to accept the contract offered and negotiated after 6 weeks the offer of that contract was withdrawn as per the letter dated Monday 22 nd Nov 2004. We note that you then offered us a signed contract dated 20/11/04 on 23/11/04. By that time we had sought further advice and had decided that we would without a contract in place offer your continued employment according to the award as of the next pay period. This means that you work a fixed 38 hour week roster on award rates and we would expect that you would be able to complete your work within that time. We have asked for further advice to assess your work skills and determine which level of the award will apply to your job description. We will also review your job description and the areas of concern will be managed in other ways. We hope that our working relationship can be redeemed and that you will be agreeable to further discussion and some assistance to implement the above proposal. We are distressed that this has been the outcome of a long and mostly satisfactory working relationship. Nothing turns on that, since the letter was never provided to the applicant. It was printed and placed in an envelope. Dr Sandra Lynch had it in her bag ready to give to the applicant, but she never did so. I mention it here because it reflects the way the respondents were thinking about the applicant at the time. It will also become relevant for other purposes, to which I shall come later. She was a visitor from overseas who had been travelling for a couple of years. At the end of the consultation, the patient said that she wanted to raise an issue with Dr Lynch. She said that she had just experienced the worst case of racial vilification of which she had ever heard. She said that she had come to Australia as a visitor, and had not expected that Australians would be so bigoted and so racist. She said that, while she was waiting to see Dr Lynch, the two receptionists had been engaged in a discussion with another woman, and she could hear what was said. She said that they had vilified Muslims, Greeks and new migrants. She said that she was appalled. According to Dr Lynch, he told the patient that their practice was set up in order to provide the best possible medical environment, that they were there "to heal body and soul", and that he was very disturbed by what she had said. He told her that he owed her an apology. He said that what she had heard was not the attitude of Australians to ethnic minorities, as the receptionists should have been aware. 26 The staff to whom Dr Lynch's patient referred as receptionists were the applicant and another staff member called Patricia. When the evening consulting session was over, Dr Lynch called them both in to see him in his room. He gave evidence that he told them that he had had a most serious complaint from a believable person, who was intelligent and articulate, to the effect that they had engaged in racial vilification and that the applicant was the ringleader. He told them that he considered it the worst experience of his 25 years of medical practice. He said that he believed that things like that had probably been happening before, but because they were usually couched in Italian, only a few people were able to understand it. He said that he was absolutely appalled and disgusted. He said that if he could terminate their employment immediately, he would do so, without hesitation or regret. He told them that they were on notice: if they breached the "guidelines" he had given them, he would terminate their employment. He said that he expected them to provide a written apology. 27 Under cross examination, Dr Lynch was pressed to relate exactly what, according to his patient, the applicant and Patricia were alleged to have said that amounted to racial vilification. He said only that he had been told that they were "demeaning Greeks, Muslims, new immigrants". He said they "admitted it at the time". 28 For her part, the applicant gave evidence that, while she was at the counter with Patricia, there was a patient who, after her consultation, desired to make another appointment. She asked whether the clinic would be open on Christmas day. The applicant said no. The patient said: "It's ridiculous how Muslims and so forth are opening up on Christmas day. " According to the applicant, a general conversation followed. Patricia mentioned that she had seen something in the newspaper about a policewoman who was a Muslim and "had to wear the scarf". The applicant said that her little boys went to a Catholic school where there were lots of Muslim children, and they did not "make any heads or tails of anything, as long as they just get on with each other". 29 Under cross examination, the applicant was taken to the admonition about the incident that Dr James Lynch said he administered at the end of the evening session. Her evidence was that Dr Lynch said that one of the patients --- an American backpacking lady --- was upset by what she had heard the applicant and Patricia saying. Dr Lynch said that she thought it was a racist conversation. The applicant denied that Dr Lynch said that the patient had said that she (the applicant) had denigrated and insulted "Turks [sic], Muslims and new immigrants". She said that she told Dr Lynch that she had said nothing racist. She denied being told by Dr Lynch that, if he could terminate her employment, he would. The applicant gave evidence that she said to Dr Lynch, "speak to the patient". 30 Dr Sandra Lynch gave evidence in chief that she had spoken to Dr James Lynch on the evening of the incident and that he was very distressed by the patient's complaint of racial vilification, of the worst kind she had ever heard, that involved the applicant. Dr Sandra Lynch drafted a letter of apology and took it to work the following day for signing. Her own name was printed on to the foot of the letter as a proposed signatory, together with that of each of the applicant and Patricia. We pride ourselves on being a culturally diverse establishment and we can assure you that all steps will be taken to ensure that such incidents do not occur in future. Your behaviour in reception is a reflection of our practice and is in fact as we have tried to make clear to you with recent customer service education is our presentation to the public. We cannot tolerate any form of racial discrimination of any manner at Doctors at Northcote. We request that you apologise to the patient concerned and that we have your guarantee that such behaviour will not occur again. She signed it herself, and she noticed that Patricia too had done so. As for the applicant, Dr Lynch instructed Heather Fisher, a staff member who was working part time at the clinic at the time, to have the applicant sign and post the letter. Ms Fisher was not called. Dr James Lynch gave evidence that, on 30 November 2004, he saw the letter signed by the applicant. The applicant gave evidence that she was asked to sign the letter, but refused to do so. 32 Dr Sandra Lynch also brought the drafted warning to work on 30 November 2004. She did not give the warning to the applicant. Nor did she instruct Ms Fisher to do so. She said that the warning was not Ms Fisher's business. Although the evidence of Dr James Lynch suggested that he assumed that the applicant had received the warning, he did not provide it to the applicant himself, and the applicant denied receiving it. 33 This matter of racial vilification is item 4 in the respondents' letter of 4 March 2005. As a matter of fact, I cannot uphold the respondents' allegation against the applicant. There is no admissible evidence of what the applicant actually said in the subject conversation which would amount to racial vilification on any view. The only such evidence is that of the applicant, and her comment, although it related to Muslims and others, was quite innocuous (at least in the way she related it to the court). On the other hand, I think I must accept Dr Lynch's evidence in so far as it goes. That is to say, I should accept that an act of serious racial vilification, in the perception of one of his patients, was reported to him. I accept that he acted promptly to admonish the applicant, and Patricia, about it. Indeed, the applicant does not deny that this was done. I also accept the evidence of Dr Sandra Lynch that she prepared the warning in draft. It serves at least as an indication of the seriousness with which the respondents viewed the event which had been reported to them. Dr Sandra Lynch gave evidence that Rose had customer relations skills that they felt the clinic was lacking, and that Rose had experience in that area. It appears that, thereafter, the quality of the interaction as between the applicant and Rose was not what it might have been. The applicant gave evidence that Rose refused to do anything she asked her to do. The applicant would ask her to answer the phone nicely, and Rose would get upset. She did not listen to the applicant. She made the applicant feel very uncomfortable. However, Dr Sandra Lynch gave evidence that Rose came to her several times upset, distressed and in tears because she felt she was being treated unfairly at the front desk and was not being instructed appropriately as to how to use the new computer program. Dr Lynch said that Rose complained that the applicant and Ms Cundari were "bitchy" towards her. Dr Lynch said that she counselled the applicant about the matter several times, telling the applicant that it was her job to instruct Rose in an appropriate and professional manner and that she should make Rose welcome. The applicant accepted that she was counselled about her interactions with Rose once only, on an occasion when Rose took three days off and Dr Lynch said, "Just be sympathetic with her because she's had a few problems. " The applicant denied that she made Rose cry. 35 A couple of days before the applicant commenced her leave (which would have been shortly before Christmas 2004), she was in conversation with Dr Sandra Lynch and Ms Cundari. According to Dr Lynch, she asked the applicant how Rose was going, whether she had settled down, and whether she was getting on better with her. The applicant replied, "Rose needs a kick up the arse". Dr Lynch said that, while making that comment, the applicant was pale with gritted teeth, and was angry. She said that Ms Cundari laughed, but she herself (Dr Lynch) did not know how to respond. She thought that she would address it on the following day, but did not. Since the applicant was about to go on leave, Dr Lynch thought she would counsel the applicant about the matter on her return. 36 The applicant placed a different complexion on this incident. She said that she, Dr Sandra Lynch and Ms Cundari were laughing at how Rose had "mucked up so much". She said that she made the comment, "She needs a good kick up the backside", and they "just laughed it off". The applicant denied saying this in an aggressive manner, or through gritted teeth. Ms Cundari agreed that the applicant had said that Rose needed, in the respondents' counsel's words, "a kick up the butt, words to that effect". However, she said that they had a laugh about it. 37 Dr James Lynch gave evidence that he originally thought that Rose was Italian, because "Rose" was an Italian name. He didn't realise until the applicant threatened to kick Rose that Rose was Croatian, at which time he knew that there was no prospect of them working together. He described Rose as a "bright and cheerful" woman, but as "a fairly fine woman, fairly thin". He took the issue of Rose being kicked by the applicant very seriously. He said: "If I have got someone who is going to assault somebody else, I feel that I am exposed to all sorts of actions subsequently for not providing a safe work environment. " When it was put to Dr Lynch under cross examination that he did not honestly believe that the applicant (who, according to cross examining counsel, was about 5' 4") would "physically kick Rose", he replied that he had no hesitation in believing it. He said that Rose was "tiny". 38 The applicant's comment about Rose needing a kick in the nether regions (however described) is item 1 in the respondents' letter of 4 March 2005. It is common ground that some such comment was made. Although Ms Cundari supported the applicant in describing the comment as one made almost in jest, I am cautious about treating her evidence as corroborative, because of the friendship between the two. The respondents had employed Rose to give the practice some customer relations skills which it previously lacked, yet there had been a certain friction as between the applicant and Rose. It is more than understandable that Dr Lynch would have enquired of the applicant how Rose was coming along. I think it was a subject in which Dr Lynch was keenly interested. It is likely that she would have had a rather sharp recall of the dynamics of the conversation in question. I consider it less likely that the applicant and Ms Cundari would have had any particular reason to remember the specifics. In the case of Ms Cundari in particular, there is no apparent reason why she should have regarded it as significant that she was present when Dr Lynch asked the applicant how Rose was coming along. As a witness, Ms Cundari did not leave me with the impression that she had a particularly accurate recall of this conversation. She gave a general impression of off-handedness about the subject --- as though it was something that happened while she was present, but really none of her concern. In the circumstances I accept that Dr Lynch's evidence as to the demeanour and manner of the applicant at the time of making the comment about Rose was substantially accurate. I believe that the applicant made her comment in no joking way. The comment conveyed to Dr Lynch a stern and serious negative opinion about Rose, as was the applicant's intention. 39 On the other hand I do not think that the applicant made the comment literally, or intended it to be so understood by Dr Lynch. The applicant used a very common, though coarse, metaphor. She used it with ill-will towards Rose, but it would be stretching credibility to suggest that Rose should in fact be kicked by someone and that it would be the applicant who did it. Thus I cannot interpret the comment as a threat. Before coming directly to the circumstance referred in that item, however, it will be necessary to refer again to the applicant's medical condition in November 2004. Unbeknownst to the respondents, in that month the applicant again consulted Dr Stewart. Dr Stewart, who gave evidence, diagnosed the applicant as suffering from severe agitated depression. It was, apparently, events occurring at her workplace that the applicant related to Dr Stewart as being responsible for her condition. Dr Stewart said that she was not aware of any non-work-related issues which were involved. Dr Stewart did not inform the respondents that the applicant had consulted her on this subject, as she considered that would have been a breach of patient confidentiality. Dr Stewart said that the applicant was resistant to her suggestion that she might take anti-depressants. Apparently, it was proposed that the applicant should take a period of annual leave, and possibly some accumulated long service leave, to recuperate from her depression. The applicant did take a period of leave, and was absent from work from shortly before Christmas 2004 until 7 February 2005. 41 Shortly before departing on leave, the applicant found a note in her tray which was addressed to the person who was going to be acting as Practice Manager in the applicant's absence, Ms Heather Fisher. This note was never produced in evidence; nor did the respondents say anything about it. According to the applicant, the note at least hinted that it was about time to "get rid of" the applicant, because she was not changing with the times. The note upset the applicant: for the weeks which followed while she was on leave, all she could think of was what she had done wrong. If there was such a note as the applicant said, the sentiments which she read into it would indeed have reflected the way the respondents were then feeling about her, as disclosed in the evidence. 42 In order to understand the next event which became controversial, it is necessary to consider one aspect of the day to day dynamics of the interaction between the administrative staff and the medical practitioners at the clinic. Traditionally, when the volume of work was such that some patients had been attending in the waiting room for a considerable period, a member of the administrative staff might think it appropriate to use the intercom system to notify the practitioner concerned that there were patients waiting for him or her, or to point out for how long certain people may have been waiting. Although some practitioners doubtless valued the benefit of being notified in this way, it appears that others interpreted such notifications as a form of irritation, and as a distraction from their professional exertions. In the new computer system employed at High Street, each practitioner, in his or her consulting room, had the facility to observe, on his or her own computer screen, who were the patients that were then waiting for a consultation, and for how long each had been waiting. It seems that the respondents took the view that this was a satisfactory substitute for the traditional method of notification by intercom, and should be so regarded by the administrative staff. 43 There was to be a new practitioner, Dr Linda Chen, commencing at the High Street Clinic on 7 February 2005. For reasons which were not disclosed, the respondents appear to have apprehended that Dr Chen might be particularly sensitive to being notified by the administrative staff that patients were waiting for her. That same day, 7 February 2005, was the day upon which the applicant was due to return from her leave. The respondents themselves, however, were contemporaneously departing on leave. However she will not tolerate being told to "Hurry up or be quick or complaints about waiting time for patients" --- nor will I. So it will be an Automatic warning if this happens --- even in the form of a joke. If I hear of it happening even later it will be an automatic warning in writing. This is not just for this next few weeks this is a permanent instruction from me. We all have Prac Soft and so we know what is happening. Also do not book her more than 4 (Four) patient per hour including emergencies. 44 When the applicant arrived at work on 7 February 2005, she read the memorandum from Dr James Lynch. She said that the note made her very upset. She could not understand why Dr Lynch had written the note. She said that she started to cry and started shaking, and one of the other receptionists and a doctor took her into another room. They tried to calm her down. She said to them: "I can't understand. Instead of saying to me: welcome back, you know, we've missed you, let's have a good year or something, he writes me a note about a doctor that I haven't even seen yet. " The applicant said that she could not stop crying, and that she just wanted to vomit. She spoke to Ms Fisher, who appears to have been acting as Practice Manager in the applicant's absence, and asked her whether she had seen the note from Dr Lynch. Ms Fisher said that she had not, and told the applicant that she was really upset. She said to the applicant, "Josie, I've said to Dr James he's supposed to give me the notes and then I will address it with the girl, I'm sorry about that. I can't believe he did that. " Ms Fisher added, "Look, do you want to go on WorkCover, you are so stressed? Do you want to go on WorkCover leave?". The applicant replied, "No. I will just go home and I will go and ring Dr Mary Rose Stewart and speak to her. " The applicant said that she was shaking, and did not know what was happening. 45 The applicant waited for a few minutes, calmed down, and then went home and rang Dr Stewart. When the applicant rang her, Dr Stewart said, "Josie, I want you to stay home and just calm down and come and see me Monday. I'm going to write you a medical certificate and I want you to be off until I see you Monday". The day of this conversation was a Monday: Dr Stewart was referring to the following Monday, thereby implying that the applicant would be off work for a week. The applicant then rang Ms Fisher and told her that she was off work until the following Monday, when she would see Dr Stewart. She said that her husband would deliver the medical certificate work as soon as she had received it, which happened the following day. That certificate stated that the applicant was "medically unfit for work", and covered the period from 7 to 15 March 2005. Dr Stewart subsequently provided certificates in the same terms for the period from 15 February to 6 March 2005, and for the period from 7 to 20 March 2005. As events transpired, the applicant never returned to work. 46 Dr Stewart gave evidence that, on 7 February 2005, she provided the applicant with a medical certificate for a specific illness, namely, agitated depression, which she regarded as "severe". She said that the applicant's depression was agitated by her return to work. She said that, in the applicant's employment, "there were incidents that occurred that upset her enormously, and that triggered her whole illness". 47 In the period following 7 February 2005, the applicant remained away from work. She said that she was "sitting at home". Ms Fisher, telephoned her once or twice. The applicant said that she told Ms Fisher that she did not know what to do. The applicant was also, apparently, telephoned by one of the other doctors at the clinic, Dr Fabio LoGiudice. 48 As I have said, the respondents themselves were absent from the clinic for at least half of February 2005. Dr James Lynch could not recall the actual day on which he returned from leave. He did not see the medical certificates that had been provided by the applicant --- he just "heard about them". If I had known that I could have terminated her then, I would have. If I had known subsequently, that I could have terminated her, I would have. There was no prospect of me working with her. I had no respect for her whatsoever. I thought what she was doing brought disgrace on my country, cause angst amongst my staff and it was simply because she didn't like the colour of their cloth and I was disgusted. Every time I saw her, I was disgusted, and still am. My father would have been disturbed if I - if I - he would have said, "Thus far and no further. " He would have drawn the line in the sand and I didn't do that. I should have. I should have done it in November and I didn't and he would be ashamed. That was from me. And leaving the workplace while on duty, to which she later reported, "I lost it". That was the written directive that I wrote, in my own handwriting. When she did return, the medical certificate provided by the applicant came to her attention. She tried several times to contact the applicant by phone, but the applicant was not answering her home phone. Dr Lynch said that, in part, she rang the applicant because she was concerned about her health. The purport of her evidence was that she had no idea what was wrong with the applicant, or why she was off work. She said it was a mystery to her. All she had were medical certificates (two, by that stage) which gave no indication as to what was wrong with the applicant. Dr Lynch said that she did not know if the applicant had "fallen down the stairs and injured her leg". 50 Finally, on about 22 February 2005, Dr Lynch succeeded in contacting the applicant on her mobile phone. Dr Lynch told the applicant that she had been trying to contact her. The applicant said that she had been "out and about". Dr Lynch asked the applicant what was happening, and if she had any idea of when she would return to work. According to Dr Lynch, the applicant said: "No, I don't know. I don't know what I am doing. I will see Dr Stewart again. I am not sure when. Next week or some time. And then I will let you know. " Dr Lynch asked the applicant what was wrong with her, and whether it was a WorkCover matter. The applicant said it was not, adding: "I am off on work stress", or more specifically, as Dr Lynch accepted under cross examination, "I have a medical certificate for stress leave". Dr Lynch gave evidence that the applicant told her that she had seen the note from Dr James Lynch on 7 February 2005 and "lost it". Dr Lynch could not recall whether, as the applicant said in her evidence, she (the applicant) had told Dr Lynch that she saw the note and became "sick and distressed". 51 In her conversation with the applicant on 22 February 2005, just what Dr Sandra Lynch said to the applicant about returning to work, and why she said it, were not entirely unambiguous in the evidence. According to Dr Lynch, having been told by the applicant that she was on stress leave, she (Dr Lynch) said: "Well, can you please get back to us and come in and discuss it and --- so that we can sort out the stress. Please ring myself or ring Heather Fisher so that we can sort this out. " However, Dr Lynch also said that she wanted the applicant to come to work because she "had issues to discuss with her". Those issues, it seems, included at least some of the matters referred to in items 1 --- 4 in the letter of 4 March 2005. Dr Lynch described them as "issues about her employment". 52 What is clear is that the conversation of 22 February 2005 ended with Dr Sandra Lynch asking the applicant to ring herself or Ms Fisher with a view to making an arrangement to come to work for a meeting. The applicant did not do so. 53 If item 5 in the respondents' letter of 4 March 2005 is intended to allege a wilful abandonment of the workplace, the use of the category "incompetence" is inapt. Manifestly, the events of 7 February 2005 had nothing to do with incompetence. Neither do I think that the conduct of the applicant on that occasion constituted disobedience or defiance. The respondents attempted to justify item 5 on the basis that the applicant's conduct amounted in effect to a rejection of Dr James Lynch's instruction to be diplomatic in her relations with Dr Chen. The facts do not bear such a construction. There was nothing in the evidence that would sustain any suggestion that the applicant would have been unwilling to comply with any reasonable direction as to the way in which communications with Dr Chen should be handled. As the applicant said, Dr Chen was a practitioner who was unknown to her, yet Dr Lynch's note carried an unambiguous tone of rebuke, as though the applicant already had a record of disobedience in relevant respects. The only evidence about the applicant's reaction to the note on 7 February 2005 was that of the applicant herself. The respondents provided no explanation of why Ms Fisher was not called. In the circumstances I accept the applicant's evidence as to the events of that day. I also accept Dr Stewart's evidence as to the illness which was brought on by those events. I find that, as a result of reading the note left by Dr Lynch, the applicant became distressed and depressed --- in the medical sense --- as described by Dr Stewart. She left work for those reasons, and not in any way that implied a rejection of her employers' lawful authority. As I have said, the respondents contend that the applicant was employed on a fixed-term contract that expired on 25 October 2005. The applicant contends that she was employed on a contract of indeterminate length --- in effect a contract from week to week that could be terminated only on reasonable notice. 55 Dr Sandra Lynch said that, at St Georges Road, she was doing most of the administration, but she did not want to continue doing that. So she sought to recruit someone with the skills for that function. She was not able to recruit such a person. However, in July 2004 she engaged a project manager to oversee the new staff contracts, to help with the marketing of the new clinic, to help with the smooth and efficient change from St Georges Road to High Street and to help improve the skills of the existing staff in customer relations. The project manager was Ms Paula Febey. 56 One of Ms Febey's responsibilities, it seems, was to prepare and distribute to existing staff new contracts of employment that would apply to them at High Street. In the case of the applicant, the proposed contract took the form of a letter addressed to her and dated 7 October 2004. The letter commenced with the normal greeting and then proceeded: "We write to offer you ..." the position in question. The letter set out a regime of terms and conditions of employment. The letter concluded with a line upon which the applicant was intended to place her signature, besides which the words "I accept the above terms" appeared. 57 The letter of 7 October 2004 had some curious features. First, it stated that the applicant was being offered a "full-time, permanent position", but the period of the contract was for 12 months only, from 25 October 2004 until 25 October 2005. Secondly, the position being offered was that of Practice Manager, but the letter stated that the applicant, if appointed to the position, would report to the Practice Manager. Thirdly, the letter finished with the words, "we look forward to you joining the company team", but, at least as far as the evidence disclosed, no company was involved (and none is referred to in the letter). 58 The applicant did not immediately sign and return the contract which had been offered to her. She stated that she was hesitant about it. Dr Sandra Lynch gave evidence that she asked the applicant whether she had returned the signed contract to Ms Febey, but received responses that were either negative or non-committal. In the days following 20 November 2004, however, a number of relevant things happened. As such we withdraw our offer and will review the contract over the next few weeks. • Dr Sandra Lynch prepared the draft warning letter to which I have referred in par 23 above. 59 The respondent's letter of 7 October 2004 was an offer intended, if accepted, to create legal relations. If and when she signed the acceptance line on that letter and returned the letter to the respondents, the applicant would thereby have brought a contract into existence. However, if, by her memorandum of 21 November 2004 or some other indication, Dr Lynch withdrew the offer before it was accepted, any purported acceptance by the applicant would have been ineffective. 60 The applicant's evidence was that, after her initial hesitation, she signed the contract and returned it to Ms Febey's pigeonhole. As to the time relationship between that event and the applicant's receipt of Dr Lynch's withdrawal memorandum of 21 November, the applicant's evidence in chief was that when she was given the memorandum by Dr Lynch, she responded that she had already put her contract into Ms Febey's pigeonhole. The evidence of Dr Lynch was broadly consistent with the applicant's. Dr Lynch said that, upon giving the applicant her memorandum of 21 November, she asked the applicant for the contract. The applicant replied that she had put it in Ms Febey's pigeonhole. Dr Lynch said that she looked in the pigeonhole and found the contract, duly signed by the applicant. 61 It is at this point that the draft (but unsent) warning letter dated 22 November 2004 becomes helpful in resolving the times at which various things happened. It is first necessary to point out that, although dated 22 November, that letter refers to events which are stated to have occurred on 23 November 2004. When this was drawn to her attention, Dr Lynch accepted that the letter was probably written on or after 23 November, not on 22 November as the date on the letter suggested. If the terms of the letter are otherwise to be believed (and, save for another obvious error --- the reference to the withdrawal memorandum as having been dated 22 November when it was dated 21 November --- the contrary was not suggested), the signed contract which the applicant placed in Ms Febey's pigeonhole was dated 20 November 2004. That was a Friday. Although there was some uncertainty in the evidence as to whether the applicant worked on Saturdays, Dr Sandra Lynch made it clear that she did not do so. The draft warning letter stated that the signed contract was "offered" to Dr Lynch on 23 November --- the following Monday. It is probable, therefore --- and I find --- that it was on 23 November that the applicant and Dr Sandra Lynch had their conversation in which Dr Lynch handed the withdrawal memorandum dated 21 November to the applicant, the applicant told Dr Lynch that the signed contract was to be found in Ms Febey's pigeonhole, and Dr Lynch found it there. 62 On this evidence, I find that, on 20 November 2004 the applicant signed her contract and placed it in Ms Febey's pigeonhole. As Ms Febey was the respondent's agent, I should treat the return of the signed contract by the applicant as an acceptance by her of the terms offered by the respondents. On 23 November 2004 the applicant was presented with the withdrawal memorandum by Dr Sandra Lynch, but by then a contract, in the legal and not merely the popular sense, had come into existence. Did anything happen subsequently to alter the contractual relations thus established? 63 There is disagreement as to what happened after Dr Lynch saw the signed contract in Ms Febey's pigeonhole on 23 November. Dr Lynch said that she put the contract back into the pigeonhole and said "we will see about it". She did not follow it up again with Ms Febey, and it was some time later --- December or possibly even January --- that she realised that the contract was missing and could not be located. The applicant said that, having found the contract in Ms Febey's pigeonhole, Dr Lynch gave it back to her (the applicant), saying that it was "no good any more" or that it was "too late". Dr Lynch denied giving the contract back to the applicant, but did not, at least in terms, deny making the comment alleged by the applicant. The applicant said that she kept the contract at home, and then gave it to her solicitor. Counsel for the respondents called for the contract, but it was not produced. 64 Once a contract had come into existence on 20 November 2004, unilateral comments by Dr Lynch of the kind alleged by the applicant would be ineffective to terminate or revoke that contract. However, there may be an argument that, if Dr Lynch did hand the contract back to the applicant and the applicant accepted it, the parties had thereby consensually revoked the contract into which they had so recently entered. The argument would, in my view, be a weak one. It would be based on the proposition that, if her intention was that the contract would not thereafter subsist, Dr Lynch, acting reasonably, would have returned the executed original to the applicant. The proposition is manifestly suspect: I find it hard to see how a reasonable person, not wanting to be in a contractual relationship with another, would arm that other with the best evidence of the existence of the relationship. 65 On the other hand, it is clear that, by the time of her conversation with the applicant on 23 November 2004, Dr Lynch had, in her own words in the draft warning letter, "decided that we would without a contract in place offer your [sic] continued employment according to the award". She was apparently unhappy with the applicant's general performance, and expressed, in that draft, the "hope that our working relationship can be redeemed". These may have been Dr Lynch's thoughts: they were not communicated to the applicant. They cannot, in other words, be taken as Dr Lynch's part of a consensual revocation of the contract. They do not make it any the more likely that Dr Lynch returned the signed contract to the applicant on 23 November; they are consistent with Dr Lynch's own evidence that she returned the contract to Ms Febey's pigeonhole and said "we will see about it". 66 Finally on this aspect, there is the applicant's failure to produce the contract, notwithstanding that she claimed to have given it to her solicitor. That failure opened the way for the respondents to prove the contract otherwise (a copy of it was actually tendered on behalf of the applicant). But it also significantly compromised the applicant's case that Dr Lynch handed the contract back to her on 23 November 2004. 67 In the circumstances, I am not prepared to accept that Dr Lynch did hand the signed contract back to the applicant. 68 Since I have found that a contract came into existence on 20 November 2004 when the applicant returned the signed form of contract to Ms Febey's pigeonhole, the applicant carries the evidentiary onus of proving that that contract was terminated or revoked by a later agreement between the parties. While the facts leave some scope for such a conclusion, if anything the factual case to the contrary is somewhat stronger. It is, however, sufficient for me to hold, as I do, that the onus has not been discharged. 69 It follows that, on and from 20 November 2004, the applicant was engaged by the respondents for a fixed term expiring on 25 October 2005. DISMISSAL FOR CAUSE? They base their case on two categories of justification. First, they say that the five items of alleged misconduct and the like in their letter of that date warranted summary dismissal. Secondly, they refer to circumstances which came to light subsequently, and for which they could have dismissed the applicant summarily, had they known about them at the time. On this second aspect, the respondents are on solid jurisprudential ground; whether they are on solid ground factually remains to be seen. 71 Turning first to the items listed in the respondents' letter of 4 March 2005, it is apparent from my findings above that there is no admissible evidence of misconduct such as would justify summary dismissal in relation to items 2 and 4. I have found that the events to which item 1 referred did not involve an actual threat of violence, so that cannot be relied on by the respondents. I have held that the matters raised by item 3 do involve a degree of incompetence, but the case that income has been lost has not been established. Those matters are not such as would justify summary termination. Finally, I need say nothing more about item 5 than that the facts disclosed in the evidence are a very long way from amounting to a case of misconduct or disobedience. In the circumstances I hold that the respondents were not justified in their summary termination of the applicant's employment for the reasons set out in their letter of 4 March 2005. 72 I should add that, were the conclusions I have just expressed otherwise, there would be a very real question whether the respondents could still, on 4 March 2005, rely on events which occurred no more recently than 7 February 2005, and in some cases months previously, as a justification for summary termination. The matters covered by items 1, 2 and 4 were concluded --- and known to the respondents --- before the applicant went on leave before Christmas 2004. The respondents appear to have taken the position that the applicant should be given an opportunity to have a break from work and to return with renewed commitment in February 2005. I do not consider that it was open to the respondents thereafter to rely upon those items as repudiatory conduct on the part of the applicant. Item 3 may be in a different category, in that it was not until some months into 2005 that the extent of the applicant's omissions became apparent to the respondents --- at least on their case. Item 5 is also probably in a different category, since, putting the respondents' case at its highest for these purposes, it should be assumed that, when they themselves came back from leave, the respondents decided to confront the applicant with their concerns face-to-face, but could not do so because of her absence from work. 74 In July 2005, the clinic at High Street was "raided" by representatives of the Health Insurance Commission ("the HIC"). Their concern related to Medicare reimbursement claims by the practice which were suspect in one way or another. About 39 or 40 patients were involved. Examples referred to in evidence were claims for nursing home consultations with patients who had previously died or been discharged from the home. It was Ms Cundari's primary responsibility to enter into the computer the details of nursing home consultations by Dr James Lynch. On 21 December 2004 he sent two electronic messages to Ms Cundari the substance of which was that he was unaware that the patients in question had been discharged, and "the error has been corrected". Although not greatly significant in itself, this communication referred to omissions which, it seems, were happening on a broader scale. 75 Dr James Lynch gave evidence that his practice was to go to a nursing home, to make an entry in his house call book and, on return to the clinic, to give the page to Ms Cundari and to tell her that he had seen everyone at the home. Typically that would be for a "standard visit", which was item number 35, although once a year he would, in co-operation with the nursing staff at the home, do a more detailed plan with respect to the management of his palliative care patients, which was item number 712. It seems that Dr Lynch's practice did not involve him writing the name of each patient he had seen at the nursing home on the page which he gave to Ms Cundari: rather, the system relied upon the staff in the clinic, principally Ms Cundari it would seem, being aware of the names and details of the patients at the nursing home in question. It was her task to remove the name of a patient from the list for a particular nursing home if that patient died. According to Dr Lynch, she did this either when notified of the death by the home or as a result of "making direct contact with the nursing home on a fairly regular basis". 76 Ms Cundari was cross examined about her role in the removal from a nursing home list of the names of patients who had died or been discharged. If her evidence is to be believed, she thought very little about the task with which she had, according to Dr Lynch, been entrusted, but simply did what she was told. For example, she was shown a memorandum from Caritas Christi Hospice headed "Clinical Summary --- RIP". The name of the patient to whom it referred was stated, and in the third block line of the heading there appeared the notation: "Date of death: 21/07/04". At the foot of the memorandum the word "SCAN" appeared in bold, beside Dr Lynch's initials (which Ms Cundari recognised). When asked what she would have done on receipt of such a document, Ms Cundari said, "well, he has just got 'scan' on it ... we just look at the name and scan it and file it ...." When she was asked, "wouldn't you at least look at the first couple of lines and see that, in fact, that is recording that that patient is dead? ", Ms Cundari answered, "not really, no". 77 Ms Cundari's approach was effectively corroborated by the applicant. She said that a dead patient's name would be taken off the billing list in the computer when Dr Lynch instructed the staff to do so but not, apparently, merely in response to the receipt of a memorandum of the kind referred to in the previous paragraph. She said that the staff did not look at the correspondence --- they only scanned. You haven't trained Ms [Cundari] to say that when somebody's got RIP they know they are dead?---But I don't know who scanned that into the computer for a start. Right?---And Dr James and all the doctors would write a note or come out and tell us that that patient was deceased. When they have got the document, they would come out and tell us to mark it off the computer. There were such notices. In evidence were several advices from the HIC notifying the practice that it had been paid in relation to particular claims. In some instances the payment was recorded as "$0.00", coded with the number "211". Dr James Lynch explained that this code number meant that the Medicare number of the patient in respect of whom the practice was claiming payment for a particular consultation was invalid. One example related to the patient referred to in the memorandum from Caritas Christi as being deceased. That memorandum was dated 5 August 2004. The practice claimed for consultations with that patient on 29 October and 1 November 2004. Each claim was rejected, and coded 211, by the HIC. Another example was that of a patient in respect of whom claims by the practice for consultations on 26 July, 9 and 30 August, 20 September and 4 October 2004 had all been rejected, and coded 211. According to Dr James Lynch, these error codings came to his attention only after the HIC raid in July the following year. He said that he would have would have expected that the error messages would have been chased up by the applicant, and the reason for them clarified. 79 The applicant accepted that, if a claim in relation to a patient was rejected by the HIC, she would "tell the girls that there was something wrong with that number, to check". However, she said that if the notes were coming back that Dr James had seen all the patients at the nursing home in question, claims would be made accordingly. Under cross examination, the applicant was taken in some detail to the claims which had been made and rejected five times between July and October 2004, and, although she accepted that, generally, it was her job to attend to such matters, she justified the fact that nothing had been done about this patient by saying either that the HIC was not authorised to inform them that someone had died, or by saying that the doctor in question had not informed her that the patient had died, or by saying that the information to which she was taken did not demonstrate upon what date the 211 codes had actually been returned to the practice. I am bound to say that I consider that the applicant was dissembling in this area, and that she did not have a legitimate explanation for what was prima facie a failure to perform an element of her job as practice manager. 80 For all of that, I am unable to find that the applicant's failings in the area of the HIC rejections had any such element of wilfulness as would make them justification for summary termination. It was an instance of inadequate performance on the part of the applicant --- no doubt the respondents would say yet another instance. The authorities, however, make it clear that, for conduct to justify summary dismissal, it must go to the root of the relationship or, in contractual terms, be repudiatory. The applicant's conduct in presently relevant respects was not in that category. 82 The respondents have both denied that the applicant was dismissed by reason of her absence from work because of her illness or by reason of her physical or mental disability. Rather, they say, she was dismissed for the five reasons stated in their letter of 4 March 2005. They say that that letter was the act of dismissal, it was a statement by the employers effecting the dismissal, and it should be taken at face value. 83 Counsel for the applicant submits that I should not regard any but the fifth reason as in any way credible. He submits that, when properly understood, the gravamen of the fifth reason is that the applicant absented herself from work on 7 February 2005, promptly placed herself on sick leave, and refused to return to work thereafter, notwithstanding having been invited to do so by Dr Sandra Lynch and other members of the administrative and professional staff at the clinic. He submits, therefore, that a significant reason --- although he needs only to say a reason --- why the applicant was dismissed was that she remained absent from work on sick leave. 84 Counsel for the respondents submits that the respondents had very real concerns about the applicant even before she went on leave in December 2004. He says that the burden of the fifth item in the respondents' list of 4 March 2005 was not absence from work per se , but the applicant's peremptory departure from the workplace on 7 February 2005 in apparent defiance of the memorandum from Dr James Lynch requiring her to behave in a particular way with respect to Dr Chen. He submits that the applicant was dismissed only when the respondents were unable to have her participate in a meeting, or counselling session, where her concerns may have been discussed. 85 It is clear that, by the time the applicant went on leave before Christmas 2004, the respondents had reached a point where they had very substantial reservations, to say the least, about keeping her in their employ. I need not reiterate the factors referred to earlier in these reasons which brought the respondents to this point. In a number of respects in which I have held that the respondents' contractual defence is not made out, I nonetheless accept that they held an actual belief that the applicant had acted in a way which they should not tolerate. I accept that Dr James Lynch was mortified by the overseas visitor's reports of what she described as racial vilification. I accept that Dr Sandra Lynch was shocked by the content and tone of the applicant's suggestion as to the kind of cautionary assault that should be administered to Rose --- even if only metaphorically intended. I also accept that both respondents genuinely objected to the applicant and other staff conversing in a foreign language in the presence of patients. I accept too that Dr Sandra Lynch was becoming increasingly frustrated with the applicant's continued failure to provide a printout of the debts owing by Medicare, and with the applicant's proffering of what she (Dr Lynch) regarded as an inadequate excuse by way of printer malfunction. I am, therefore, prepared to accept that each of items 1-4 in the respondents' letter of 4 March 2005 was a reason why the applicant was eventually dismissed. 86 That leaves item 5 in the letter of 4 March 2005. The difficulty with the respondents' position in this regard is that the item, as set out in the letter, assumes a state of affairs which I have found to be contrary to the facts. The applicant did not in fact depart from her workplace on 7 February 2005 in defiance of her employers' instructions, in rejection of their authority or in a fit of pique. She departed because she became, rather suddenly, afflicted by a condition which Dr Stewart diagnosed as agitated depression. Even then, she did not depart immediately upon reading Dr James Lynch's memorandum: she remained at work for a time, comforted, it would seem, by Ms Fisher. 87 In item 5 of their letter dated 4 March 2005, the respondents left no doubt but that the applicant's departure from the workplace on 7 February 2005 was a reason why they terminated her employment. If they had an actual, albeit mistaken, belief about the character of the applicant's departure from the workplace, their reason for the termination would not have been the applicant's absence on sick leave. The question is whether I should accept that they had an actual, but mistaken, belief in that respect. The question concerns the respondents' state of knowledge on 4 March 2005. By then they were well aware that the applicant was absent on sick leave, and had been so absent since 7 February 2005 --- there were medical certificates to prove it. They also knew, from what the applicant told Dr Sandra Lynch on 22 February 2005, that the applicant's medical reason for being absent was based on stress. The applicant's comment, upon which the respondents relied in item 5, that she "lost it" was, as stated by Dr Lynch in her evidence, related to the applicant having seen the note from Dr James Lynch. 88 If all the respondents knew about the events of 7 February 2005 (when they were themselves on leave) was what the applicant told Dr Sandra Lynch on the telephone on 22 February 2005, there might be some room for misunderstanding on the respondents' part. Even that would require that I reject the evidence of the applicant that she told Dr Lynch, in that conversation, that the note made her "sick and distressed". If I did so, however, it would be possible to find that, at all times up to 4 March 2005, the respondents actually believed that the applicant had left the workplace on 7 February in an act of defiance, rather than because of her illness. I say "possible" because it would by no means follow that such a finding would be made: the medical certificates supplied by Dr Stewart would raise the strongest doubts, to say the least, about the existence of such a belief. 89 But there is another factor of considerable importance. Ms Fisher was acting as Practice Manager while the applicant was on leave. In the absence of the respondents themselves, I can think of no reason why I should not infer that Ms Fisher was in effect in charge of the office pending the applicant's return, and again after the applicant re-departed on 7 February. She was the respondents' representative in their dealings with the applicant on that day. The evidence of the interaction between her and the applicant to which I have referred in par 44 above was not challenged by the respondents. Ms Fisher was not called. That Ms Fisher would not have accurately related the events of 7 February to the respondents on their return from leave (or before that time) is, I consider, a most unlikely possibility. The subject was not the subject of any evidence on behalf of the respondents. 90 I am compelled to the conclusion, on the probabilities, that Ms Fisher informed the respondents of the applicant's reaction to the note left for her by Dr James Lynch, and of the real reason why the applicant left work on 7 February 2005. I do not accept the evidence of Dr Sandra Lynch that, immediately before she spoke to the applicant by telephone on 22 February 2005, she had no more reason to believe that the applicant was on leave because of an illness of the mind than because she had, for example, fallen down the stairs and injured her leg (as she put it). If there were any room for doubt in that respect, it was removed by what the applicant said on that occasion. More significantly, I find that, as a result of what Ms Fisher most probably told them (together with the medical certificates and the information given by the applicant herself on 22 February), on 4 March 2005 the respondents did not actually believe that the applicant's departure from work on 7 February was by way of an act of defiance. They then well knew that the applicant had left work in a state of distress, that Ms Fisher had advised her to take some time off on WorkCover, and that the circumstances of her departure led directly to the provision of medical certificates by Dr Stewart. 91 Turning to s 170CK(2)(a) of the Act, the "reason" to which that provision refers is, I consider, the temporary absence from work. For an employer to act in breach of the provision, there must be an awareness that the absence was because of illness or injury, and the absence must be the reason for the termination. Or, to put it defensively, an employer will succeed in avoiding an adverse finding under the provision upon proving either that he or she did not know the reason for the absence or that he or she did not terminate the employment by reason of the absence. In the present case the respondents have not proved either: indeed, I find the contrary in each case. 92 It follows that I should find that a reason why the respondents terminated the employment of the applicant was that, on 7 February 2005, she absented herself from work because of illness. Since the respondents accept that her absence thereafter was, as at 4 March 2005, temporary within the meaning of s 170CK(2)(a) of the Act, it likewise follows that the respondents have contravened that section. 93 As for the applicant's reliance on par (f) of s 170CK(2) of the Act, the respondents have both denied that they terminated the applicant's employment by reason of her physical or mental disability. Dr Sandra Lynch, who took the lead in attempting to discover why the applicant was absent from work in February 2005, gave evidence that she was unaware of any physical or metal disability which the applicant had. I accept that evidence. Indeed, I do not consider that the applicant has established that she did in fact have any such disability at any relevant time. In this part of her case, she sought to rely on conditions which were in the nature of illnesses rather than disabilities. For these reasons I would reject so much of her case as was brought under s 170CK(2)(f) of the Act. I shall not deal with the question of any penalty at this stage. I shall give the parties, and in particular the respondents, an opportunity to address me on that subject in the light of the reasons which I have given above. 95 During the course of the parties' submissions at the trial, I indicated that, whatever the outcome of the case, I would not order the reinstatement of the applicant in her former employment. My reasons for declining to order reinstatement are as follows. First, within about a month of being dismissed by the respondents, the applicant secured further employment as a medical receptionist. It is true that this was for only 20 hours per week, rising to 25 hours per week in March 2006. It is not, however, as though the applicant would be without employment altogether if not reinstated by the respondents. 96 Secondly, quite apart from their breach of s 170CK of the Act, I accept the respondents' case that they no longer have the necessary trust and confidence in the applicant, particularly for an important position such as Practice Manager in their clinic. Albeit that the clinic at High Street is a larger operation than was the clinic at St Georges Road, it remains the fact that the respondents are medical practitioners in the way of working proprietors, and I infer that they are required regularly to interact, at the personal level, with their Practice Manager. Having seen both respondents give their evidence in this case, I am confident in the conclusion that any attempt by the Court to restore a genuine employer/employee relationship would be futile. I also observed the applicant give her evidence. On the subject of reinstatement, she said "I would like to, but it would be really difficult after a year and a half ... to go back there, but if it was to happen, I would love to. " She gave this evidence tentatively and, I thought, somewhat rigidly. It was as though she was doing what was required to secure the highest level of success in the proceeding. I was not left with any real conviction that she wished to work for the respondents again. 97 Thirdly, I am persuaded by the respondents that the other four reasons which they proffered for the applicant's dismissal, although insufficient to justify summary termination as a matter of law, were genuine, actual, reasons for their wish to have the applicant out of their employ. The terms of s 170CK of the Act are such as to contemplate that an employee may be dismissed for a number of reasons, only one of which is a prohibited reason. I can think of no reason why, in an appropriate case, the non-prohibited reasons which lay behind a dismissal should not be relevant at the point of considering the discretionary remedy of reinstatement. As I have found in these reasons, by the time the applicant went on leave at the end of 2004, the respondents had come close to the point of deciding that she should no longer be in their employ. It is true that they had not reached that point, but an order of reinstatement would effectively indicate to them that they could not terminate the employment of the applicant, even lawfully, for those non-prohibited reasons. Although not conclusive of itself, this is a consideration which, in my judgment, tends against the making of an order for reinstatement. 98 In the light of the conclusion I have reached on the applicant's common law claim, I propose to defer consideration of the question of compensation under s 170CR(1)(c) of the Act, and to invite the parties to address me on that subject at the same time as I hear them on the matter of penalty. 99 With respect to that common law claim, I have held that none of the circumstances relied on by the respondents was sufficient to justify the summary termination of the applicant's employment. It follows that the applicant is entitled to damages for wrongful dismissal. Since I have held that the applicant was employed on a fixed term contract terminating on 25 October 2005, the starting point for the calculation of damages would be the remuneration which she lost from the date of her dismissal until that date. I shall, however, say nothing further on that subject here, but give the parties an opportunity to prepare their calculations and to address me further on the terms of a damages order that is appropriate in the circumstances. 100 I shall order that the parties exchange outlines in which they state the orders which they propose to give effect to the foregoing reasons, and in which they provide all necessary particulars. I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | termination of employment whether by reason of employee's temporary absence because of illness or employee's physical or mental disability appropriateness of reinstatement workplace relations act 1996 (cth) ss 170ck, 170cr summary dismissal whether justified by conduct of employee offer and acceptance whether contract complete before attempted withdrawal of offer industrial law employment contract |
No Notice of Appeal was filed and served within 21 days after the date when the judgment appealed from was pronounced in accordance with Order 52 r15(1)(a)(i) of the Federal Court Rules ('the Rules'). 2 However on 22 September 2006 the appellant, who has been identified for the purposes of these proceedings as SZFLL, filed an Affidavit sworn by him on 16 September 2006 which was, in effect, both an Application for an extension of time within which to file and serve a notice of appeal from the judgment of the learned Federal Magistrate and also a justification for such an extension of time. It may be observed that the Affidavit was sworn some two days after the time for filing a Notice of Appeal expired and it was filed six days after that. 3 Under Order 52 r15(2) of the Rules a Judge may 'for special reasons' at any time give leave to file and serve a Notice of Appeal. 4 In Jess v Scott (1986) 12 FCR 187 at 195 a Full Court of this Court said that the expression 'special reasons' was 'intended to distinguish the case from the usual course according to which the time is 21 days. But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the court sees a ground which does justify departure from the general rule in the particular case'. 5 The Full Court continued by describing the expression 'special reasons' as conferring 'a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served'. 6 The Court drew a distinction between a case where there may have been an oversight of a day and one in which a neglect persisted during a prolonged period. Where a party was a few days late the Court said 'something much less significant might justify leave'. 7 In this case an interesting argument in relation to the reach of s 424A of the Migration Act 1958 (Cth) ('the Act') has been advanced sufficient to justify departure from the general rule that time limits imposed under the Rules must be complied with. 8 When cross-examined in relation to his awareness of a 21 day time limit, the appellant conceded that he had been informed by the learned Federal Magistrate that such a time limit applied. However, the appellant, who was at the time attending to his affairs with the assistance of a migration agent, said that he did not receive the judgment until three days after the Federal Magistrate's reasons were certified, i.e. not until 7 September 2006 or thereabouts. 9 In the circumstances it is perhaps surprising that the respondent Minister opposed an extension of time within which an appeal may be brought. Be that as it may, I have concluded that leave should be granted to the appellant to file and serve a Notice of Appeal, albeit strictly out of time. 10 On the hearing of the Application for such leave, which was heard in conjunction with the appeal on the premise that leave may be granted, the appellant, then the applicant, was represented by Dr Azzi of counsel. The Minister was represented by Mr Leerdam, a solicitor. 11 Dr Azzi read not only the Affidavit of the appellant sworn 16 September 2006 but also he relied upon a document entitled 'Affidavit' which was signed by the appellant and dated 9 February 2007. That 'Affidavit' was filed in the Court by the appellant on 12 February 2007. To it a 'Draft Notice of Appeal' was attached. On the second day of the hearing of the matter, namely 22 February 2007, leave was granted to the applicant to file in Court a Notice of Appeal signed by him and dated 9 February 2007. Such Notice of Appeal took the form of the draft which had been attached to the 'Affidavit' of 9 February 2007. It is that Notice of Appeal which is the subject of consideration in the balance of these reasons. 12 The Notice of Appeal contained two grounds each of which was argued on the hearing of the appeal. For present purposes it is unnecessary to identify the particulars which were provided under those two grounds. His Honour erred in dismissing the application for review of the Tribunal's decision in circumstances where his Honour held the Tribunal did not overlook an "element or integer of [the applicant's] claim" so that it "was not required to pursue the subtle questions of [Syrian] influence on the relevant Lebanese authorities" when considering the applicant's claim to fear the Lebanese authorities "[b]ecause the applicant was not believed". He is a citizen of Lebanon who held a Lebanese passport issued to him on 21 December 2001. On 11 August 2002 he arrived in Australia, entering this country under a Visitor's Visa issued to him in Beirut on 22 July 2002. 14 On 9 September 2002 the appellant applied for a Protection (Class XA) Visa. 15 That application was refused by a delegate of the Minister on 19 December 2002. 16 On 5 February 2003 the appellant filed an Application for Review of the Minister's delegate's decision with the Refugee Review Tribunal. It was part of the appellant's case that 'The Lebanese authorities will not protect anyhow. The record of the Lebanese authorities on offering protection to L.F. [Lebanese Forces] members and supporters is not very encouraging especially in light of the human rights abuses perpetrated against L.F. members and supporters in recent years. The Lebanese authorities would still persecute me for my ongoing L.F. students activities'. 17 The appellant gave oral evidence to the Tribunal on 27 August 2003. Thereafter, the Tribunal decided the Application for Review adversely to the appellant, affirming the decision of the Minister's delegate not to grant the appellant a protection visa on 10 October 2003. That decision was handed down on 4 November 2003. 18 An Application for constitutional writ relief would appear to have been filed in the Federal Magistrates Court of Australia on 11 January 2005 which resulted in the decision of Driver FM of 24 August 2006 to which reference has previously been made. 19 On 24 January 2005 a Registrar in the Federal Magistrates Court ordered the appellant to file and serve an Amended Application with particulars. Apparently this order was not complied with, with the result that the Application which came before the Federal Magistrates Court contained a single ground of review which was referred to in the reasons for judgment of Driver FM as 'that the RRT erred in a manner amounting to jurisdictional error in that it failed to consider every integer of the applicant's claim of a well-founded fear of persecution'. Because the applicant was not believed, the presiding member was not required to pursue the subtle questions of influence on the relevant Lebanese authorities that might otherwise have called for consideration. The applicant's claims were considered in the terms that they were put and, in substance, rejected. The RRT did not err by overlooking any element or integer of the applicant's claims. He claims that as a result of his activities he was arrested on four separate occasions - in August 1998, September 1998, January 2000 and in 2002 after the death of Ramzi Irani- by the military intelligence. He claims that on each occasion he was forced to sign statements to the effect that he would not participate in political activities. He claims that ten days after his arrival in Australia he was told by his parents that the military intelligence had been asking about him. He fears being apprehended by the Lebanese authorities and being detained upon his return. The authorities are only interested in former LF members who are "wanted in connection with serious crimes, such as murders or bombings" or those involved in overt political activities. The authorities do not pursue members of LF rank and file (DFAT, Country Information Report, No. 1028/96, Lebanon: Treatment of Former Lebanese Forces, 9 December 1996, CX21238). He was an ordinary member of LF who had held no positions within the organisation. The applicant did not claim, and there was no evidence before the Tribunal to indicate, that he was involved in a serious crime. He described his activities as distributing flyers, attending demonstrations and educating the young. The Tribunal has rejected the applicant's claims that he was arrested and detained in the course of attending demonstrations in 1998 and 2000. The applicant did not claim to have been prevented from attending memorial masses for the martyrs held annually in the month of May or any the other demonstrations or to have been harmed in the course of, or as result of, participating in these activities. The Tribunal is satisfied that the applicant's low-level activities did not give him a profile that was of any real interest to the Lebanese authorities. The independent information cited above suggests that the Lebanese authorities would certainly have prevented the issue of a passport to any individual wanted whose crime was linked to his/her membership of LF (DFAT, Country Information Report, No. 1028/96, Lebanon: Treatment of Former Lebanese Forces, 9 December 1996, CX21238). The applicant had no difficulties in obtaining his passport in December 2001. The Tribunal is satisfied that if the applicant returned to Lebanon he would be able to express his views without experiencing unreasonable restrictions on his right of political expression. It is clear from the independent evidence that there is not a complete denial of civil and political rights in Lebanon. A level of public expression of political views is tolerated and simply expressing support for opposition parties without something more is not a cause of harassment. The Tribunal is satisfied that if the applicant returned to Lebanon and continued to engage in political activity and or criticism at the same level as he has in the past there is no real chance that he would face persecution as a result. The Tribunal does not consider that the applicant's activities in Australia, namely visiting the LF office or attending meetings and receptions, raise his political profile beyond what it was prior to his departure from the country. The Tribunal, therefore, finds that if the applicant resumes his activities at the same level as he has in the past the chance that he will be persecuted by the authorities in the reasonably foreseeable future is remote. It also asked him about his education, including his assertion that he had been a student at the Holy Spirit University undertaking a course in 'marketing' in 1998, 1999 and 2000 before he ceased studying in what was said to be a five year course after three years. Given the appellant's apparent lack of knowledge of the courses taught in the marketing degree, the Tribunal Member apparently indicated to the appellant that he had difficulty in accepting that he was a student at the Holy Spirit University in the years mentioned and asked him to provide evidence to support his claim in that regard. 24 In addition, the Tribunal informed the appellant that the Lebanese Forces website contained no record of any major demonstrations in August and September 1998. In addition it suggested that there had been no mention of a demonstration in January 2000 although the appellant had suggested that the January 2000 demonstration had been attended by 4,000 people. The Tribunal Member recorded that the appellant had no comments when these matters were drawn to his attention. 25 It would appear that in deciding the Application before it the Tribunal had regard to a search undertaken by it on the website of the Holy Spirit University (which revealed a number of course names which had not been mentioned by the appellant in his evidence when he was challenged as to his attendance at the University). The Tribunal was of the view that 'the applicant has fabricated his evidence regarding his educational history'. The fact that he demonstrated a palpable lack of knowledge about the structure of LF Students at his university reinforces the aforesaid view. In rejecting the appellant's claims in this regard the Tribunal had regard to the absence of any mention of the alleged incidents on the Lebanese Forces website and also in other internet records which might be expected to contain such information. 27 Similarly, the Tribunal was not prepared to accept that the appellant was arrested and detained in January 2000 in the course of attending a demonstration. Once again, the Tribunal relied upon the absence of any mention of the demonstration said to have taken place on a number of websites which one might expect would include mention of the demonstration, had it occurred. 28 In relation to the 2002 matter the Tribunal had 'serious reservations regarding this claim' for reasons which it proceeded to detail. In reaching this view the Tribunal has had regard to the applicant's willingness to fabricate his evidence regarding his evidence (sic) regarding his educational history and his membership of LF students; and the fact that key portions of his evidence are completely unsupported by the country information before the Tribunal. In the Tribunal's view the totality of the applicant's oral evidence shows a propensity to exaggerate and tailor his evidence in a manner which achieves his own purpose. 30 Ultimately, the Tribunal was not satisfied that the appellant had a well-founded fear of Convention-based persecution. 31 It may be observed that information taken into account as the reason or part of the reason for the Tribunal affirming the decision of the Minister's delegate included the information obtained by the Tribunal from the Holy Spirit University's website, in respect of the component parts of the marketing degree course, and the absence of Country Information supportive of the appellant's allegations that demonstrations took place in August 1998, September 1998 and January 2000, it being assumed by the Tribunal that, had the incidents in question occurred, they would have been mentioned in the relevant Country Information. 33 The appellant's case is that the Tribunal failed to consider a claimed fear on the part of the appellant of persecution from Syrian forces operating within Lebanon in respect of which the Lebanese authorities failed to offer persons such as the appellant protection. 34 In support of the submission that the Tribunal failed to deal with a claim which had been put or which was evidently available to the appellant on the material before the Tribunal, the Court was invited to have regard to matters put to the Tribunal, certain Country Information referred to in the Tribunal's decision and certain matters raised in the hearing before the Tribunal for which an unauthorised transcript was in evidence before the Federal Magistrate, to the extent to which it was not in conflict with the material contained in the Court Book. NOBODY KNEW ABOUT MY VISA I WAS FEAR SOMEBODY WILL DUMPED ME IN - AFTER 10 DAYS FROM MY ARRIVING TO AUSTRALIA MY PARENTS CALLED REGARDS THE MILITARY INTELLIGENCE SERVICES CAME TO ARREST ME, MY PARENTS TOLD THEM WE DON'T KNOW WHERE HE IS. WHEN HE IS BACK HOME WE WILL LET HIM KNOW THAT YOU WANT HIM. THAT IS WHEN I START TO ASK WHAT CAN I DO HERE TO BE AWAY FROM THEM, AND TO BE IN A SAFE HOME AND COUNTRY. I AM ASKING THE AUSTRALIAN GOVERNMENT TO GIVE ME A PROTECTION VISA AND A CHANCE TO HAVE A NEW START IN MY LIFE. Syrian forces are there essentially to protect specific Syrian interests which includes an interest in Lebanese political and security developments. (Cable DM39671 of 3 June 1993, CX6522. The fact that low-level anti-Syrian activists have been briefly detained and then released is, according to the lawyer cited above, almost prima facie proof that those in question are not really wanted by the Syrians. Members of the Lebanese Forces (LF) participated in the recent municipal elections and were very successful. The candidates officially represented the Lebanese Forces, a fact well-known by the Syrian and Lebanese security forces. None of the candidates were harassed or mistreated during the campaign. The Director added that there is no mass targeting of members or supporters of the LF. Sometimes people are imprisoned or they are referred to court. It is abundantly clear that no such case was advanced before the Tribunal by the appellant, nor was it capable of being advanced on the material which was before the Tribunal. There is no doubt that Syrian forces were operating in Lebanon but there is no evidence to suggest that any harm was inflicted upon the appellant or threatened in relation to him by the Syrian forces. 41 Ground 1 in the notice of appeal fails. 44 In NBKS v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 174 , a Full Bench of the Court comprising Tamberlin, Weinberg and Allsop JJ had to consider the non-disclosure to the appellant of results obtained from an internet search of the appellant's name when 'Google' and 'MSN' searches were undertaken on the internet. Another matter to which the Tribunal had regard in that case was the omission from a Dr Nair's report that were he to return and be placed in a confrontational situation the appellant would be likely to express his views against the regime. 45 In concluding that the Tribunal was not satisfied that he might react in this way regard was had to the fact that Dr Nair had said nothing about such a possible reaction. I agree with the reasoning of Allsop J that the fact of the [internet] search and the negative result was information which ought to have been disclosed to the appellant under s 424A to provide an opportunity for the appellant to make submissions in response. There is no reason in principle why an omission (which the Tribunal views as important, and which is plainly adverse to the applicant's case) should be treated any differently when it comes to s 424A, than a positive statement. That is particularly so when, as the Tribunal seems to have done here, it treats the omission as though it provides implicit support for a positive assertion that is detrimental to an applicant's case. In my opinion, that fact constituted "information" within the meaning of s 424A. The letter should have pointed out why this was relevant to the review - that it tended against the proposition that he might so behave. I cannot agree. It must also be observed that the internet search, and the nil result, upon which reliance was placed was again specifically about the appellant. 49 In his submissions counsel for the appellant urged that the Court should follow so much of the decision of Gray J in Baig v Minister for Immigration & Multicultural Affairs [2002] FCA 380 at [33] - [34] where his Honour recorded the view that s 424A(3)(a) of the Act required the Court to address two separate criteria. This submission does not bear analysis. The wording of s 424A(3)(a) is not felicitous and the words 'and is' have given rise to some difficulty. However, that difficulty has been resolved and the law made clear in a series of judgments of this Court. 50 The matter was specifically addressed in Minister for Immigration and Multicultural and Indigenous Affairs v NAMW and Others [2004] FCAFC 264 ; (2004) 140 FCR 572. A recent decision of the Full Court, Minister for Immigration & Multicultural & Indigenous Affairs v NAMW [2004] FCAFC 264 ..., delivered on 23 September 2004, held that the only criterion is that the information is not specifically about the applicant or another person, and that the reference in s 424A(3)(a) to the class of persons is a provision designed to underline the specificity required by precluding an argument that reference to a class could be taken as a reference to all individuals falling within it, including an applicant. The governing provision of s 424A is s 424A(1)(a). The 'information' to be given to an applicant must be of a character 'that the Tribunal considers would be the reason or a part of the reason for affirming the decision that is under review'. The decision under review is necessarily adverse to the visa applicant as the Minister's decision not to grant a visa has been upheld by the Tribunal. Thus, the information to be provided to the applicant is necessarily adverse to the applicant's case for granting of a visa. To be adverse in that sense the information must relate to the applicant. Otherwise it would be irrelevant. ... Information can relate to an applicant in various ways. Most directly, information will relate to an applicant where he or she is expressed to be the subject of the information. Information adverse to an applicant can indirectly relate to an applicant because it expressly concerns an identified person with a relevant relationship with the applicant's case for a visa. In either of those cases, the information relates to a specific person (or persons). Information adverse to an applicant may also indirectly relate to an applicant because it relates to a class (or classes) of which the applicant is a member. Such adverse information is general in nature rather than particular. Information can not relate to the applicant in any other manner. If such information does not relate to the applicant it is not adverse to an applicant and does not come within the purview of s 424A at all. That is to say it was information that was not specifically about the applicant or another person in the sense described by Gyles J. 57 This leaves for consideration the question of the reliance placed by the Tribunal on the lack of Country Information in relation to the demonstrations and disturbances in which the appellant says he participated. The matter was specifically addressed, albeit briefly, by Allsop J in SZHFC v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 1359. The matter was dealt with under the heading ' s 414A --- Issue 3 --- "the absence of country information issue" addressed in paragraph 12(e) of the appellant's written submissions '. 58 Unfortunately, the written submissions referred to were not appended to his Honour's reasons for judgment and I do not have access to them. The knowledge of absence of country information was said to be "information" not caught by s 424(3)(a). This is because there is no independent country information before the Tribunal and none was submitted by the Applicant or his adviser to suggest that Gujaratis are persecuted by anyone for these reasons. The conclusion here reached by the Tribunal is one about the state of country information. As such, it is encompassed by s 424A(3)(a): Minister for Immigration and Multicultural and Indigenous Affairs v NAMW [2004] FCAFC 264 ; (2004) 140 FCR 572, WAJW v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 330 ; QAAC of 2004 v Refugee Review Tribunal [2005] FCAFC 92 ; VJAF v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 178 ' (emphasis added). 60 It seems to me that where independent Country Information contains positive material or where independent Country Information is lacking in the sense that the available independent Country Information makes no mention of a particular matter, the same approach should be adopted. It cannot be said that the information or lack of it is specifically about an applicant or another person. Such independent Country Information, or lack of it, falls within the exclusion for which s 424A(3)(a) of the Act provides. 61 In the circumstances, the second ground of appeal also fails. Accordingly, the appeal should be dismissed. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | the exclusion for which s 424a(3)(a) of the migration act provides, covers country information which contains positive material and also country information which makes no mention of a particular matter upon which an applicant relies migration |
The cases against the corporate respondents, Global Prepaid Communications Pty Ltd (Global) and In Touch Networks Pty Ltd (In Touch) are, firstly, for breach of s 52 of the Trade Practices Act 1974 (Cth) (the Act) and, in respect of representations relating to future matters, for breach of s 51A. Secondly, the ACCC alleges contraventions of the Trade Practices (Industry Codes --- Franchising) Regulations 1998 (the Franchising Code ) in relation to agreements said to constitute franchising agreements. 2 It is alleged that the individual respondents were involved with certain of the breaches of s 52 by the corporate respondents by virtue of s 75B of the Act. It is also alleged that in certain cases, s 6 of the Act applies to extend the operation of the Act to individuals. (b) Section 6(3): postal telegraphic and telephonic services. In particular, it seeks compensation on behalf of a number of third parties whom it alleges suffered loss by reason of the contravening conduct. The fourth respondent, Frank Yates, and his son the third respondent, Nicholas Yates, are alleged to be the principals in the businesses. The fifth respondent, Nicholas Rhodin, the sixth respondent, Daniel Albert, and the seventh respondent, Russell Fielding, were employees of the companies and lieutenants in the enterprise. The idea for the business came from Nicholas Yates. The machines had been used by Travelex during the Sydney Olympics in 2000 to sell Telstra prepaid phone cards. Frank Yates approached Travelex and purchased a quantity of vending machines for $6,000 each which he proposed to sell to distributors for $12,250 each. The machines purchased from Travelex were manufactured in Canada by a company known as Opal Manufacturing Limited. At about that time, Frank Yates also arranged for Barry MacNamara to manufacture additional vending machines in Queensland. 6 From 10 March 2001, Global (and less frequently, In Touch) placed newspaper advertisements around Australia for a business opportunity involving the sale of prepaid telephone cards from vending machines. The advertisements stated, inter alia, that distributors could make significant profits from the operation of their vending machines and that Global would assist distributors in securing successful locations for the placement of their vending machines. 7 A number of potential distributors found the statements in the advertisements appealing and contacted Global. Each responded to an advertisement placed in the Melbourne Age newspaper on 10 March 2001. They were the first three distributors to purchase vending machines and enter into distribution agreements with Global. 9 Representatives of Global dealt with potential distributors in a largely formulaic manner. The individual respondents who principally dealt with distributors on behalf of Global were Frank Yates, Nicholas Yates, Nicholas Rhodin and Russell Fielding. 10 The evidence of the distributors involved in the proceedings demonstrates that irrespective of which representative of Global the distributor dealt with, the procedure adopted was much the same. The evidence relied upon in the Swisscom part of the case demonstrates that the formula was not only used but it was also taught to distributors and circulated as a written document. Most potential distributors were encouraged to purchase at least eight vending machines, although some purchased significantly more. The distributor would usually be told that the relevant contact at Global was not available and calls would not be returned. On at least one occasion, a distributor had to pretend to be a new potential distributor before he was permitted to speak to the contact. Prior to late 2003, it sold a product known as an easyRoam card which has been referred to in the pleading as a Swisscom SIM Card. The product was a mobile telephone SIM card which could be inserted into a mobile telephone to allow the user to make and receive telephone calls and access other functions such as voicemail and short message service (SMS), also known as text messaging. The principal benefits of the product according to Swisscom were that the card could be used in many different countries and, subject to varying tariffs imposed in some countries, the cost of making and receiving telephone calls would be reasonably uniform and the credits remaining on the card could be recharged. The product would also permit the user to maintain the same Swisscom telephone number, which commenced with the country code '41' for Switzerland. 17 By an agreement dated 10 August 2000, Pahth Telecommunications Limited (Pahth), a company then based in Perth, became, the non-exclusive distributor for Swisscom in Australia and New Zealand. Pahth took various steps to promote and sell the Swisscom card product including appointing a sub-distributor in New Zealand and engaging Julian Good as a consultant to assist in the promotion of the Swisscom card. 18 By about July 2001, it was apparent that Pahth was having significant difficulties selling the Swisscom card product and it received communications from Swisscom because it had not been selling sufficient stock. In approximately September 2001, National Telecommunications Group Limited (NTG) purchased some of the Swisscom stock from Pahth. About that time, Pahth ceased its involvement with the Swisscom card product and Swisscom terminated its distribution agreement with Pahth. 19 From as early as April or May 2001, Frank Yates was in contact with representatives of Swisscom including Benedikt Fontana. He also had discussions with Peter Hanley, who was at the time the managing director of Pahth, and Mr Hanley told him that Pahth had not generated excessive card sales. In November 2001, Nicholas Yates met with Mr Fontana in Singapore and in late November 2001, In Touch entered into a non-exclusive distribution agreement with Swisscom. 20 From about February 2002, Global placed a number of newspaper advertisements for a business opportunity involving the sale of prepaid Swisscom SIM cards. It did so despite the fact that the distribution agreement with Swisscom was held by In Touch, a distinct corporate entity. The advertisements stated that distributors could make very significant profits from the operation of a Swisscom distributorship and that Global would assist distributors with marketing, training, public relations, point of sale materials as well as providing full backup and support. The advertisements also described the functionality of the Swisscom SIM card product. 21 A number of potential distributors found the statements in the advertisements appealing and contacted Global. The individuals who dealt with distributors on behalf of those companies were largely Frank Yates, Nicholas Yates, Daniel Albert and Julian Good. 23 The procedure for dealing with distributors was reduced to writing and taught to distributors after it had been applied in encouraging them to sign up with Global/In Touch. Albert referred to the procedure as his 'follow in my footsteps' document and explained that it was like 'reeling in a fish'. He told the Bowens that he had applied the technique to them. He asked Sandra Vella to transcribe that process for him and he then passed it on to other distributors as his special selling technique. When Albert taught the technique to Smith, he explained that 'the Global group of companies has a very unique sales program that is one of the companies' secrets of their success, rapid growth and profitability'. This technique was used to avoid or limit awareness of the falsity of representations made to distributors. This was despite requests by distributors to meet and work cooperatively with other distributors. Under s 21 the Court may in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed. This may have been seen as necessary because of the need to make a case for compensation sought on behalf of a number of participants in the schemes. However, it has resulted in a prolix further further statement of claim. 38 Global, In Touch, Nicholas Yates, Frank Yates and Nicholas Rhodin all filed appearances in the proceeding. Global and In Touch are currently in liquidation and leave to proceed against them was granted on the basis that no costs would be sought against either company. The solicitor for Global and In Touch indicated that he no longer had instructions from those parties before the hearing. Nicholas Yates and Frank Yates filed defences. The solicitor for Frank Yates ceased acting for him early in the hearing, although he apparently did not file any notice ceasing to act. The same solicitor made spasmodic appearances throughout the hearing, essentially on procedural matters, representing Nicholas Yates. Counsel was briefed to make some limited final submissions for Nicholas Yates. Nicholas Rhodin appeared on the first day of the hearing to say he represented himself and then effectively departed. Counsel was later permitted to make some limited final submissions on his behalf. The solicitor for Daniel Albert filed a defence, a submission on costs, and finally a notice ceasing to act in the period before the hearing. Daniel Albert did not appear thereafter. Russell Fielding was served but filed no appearance or defence. The ACCC filed a notice of discontinuance against John Rhodin after the hearing had begun. There were no objections to the evidence led for the ACCC. There was no cross-examination. No evidence was led on behalf of any respondent. 39 Thus, the matter has effectively proceeded until final submissions as an undefended action. Nonetheless, the ACCC has taken the prudent course of seeking to demonstrate proof of all of the elements of the pleaded case against all respondents. Counsel opened the case at some length. Detailed chronologies were provided. During the course of reception of the considerable body of evidence that was tendered, counsel provided both oral and written 'roadmaps' to assist in the reading and understanding of the evidence. A comprehensive summary of the pleaded representations and contraventions was provided. That summary is sorted in relation to each of Vending Machines and Swisscom by distributor, by representation type, by maker and by date. Counsel for the ACCC made comprehensive written closing submissions that were supplemented orally. The structure of the closing submissions for the ACCC is as follows. Legal submissions. These deal with a number of relevant legal questions. Factual submissions. These deal with both the s 52 case and the Franchising Code case. So far as s 52 is concerned, it summarises the evidence by category of representation, cross-referenced to the separate summary of pleaded representations and deals with some miscellaneous matters. The Franchising Code case is then summarised. Detailed submissions are then made as to the relief sought. The evidence relating to the case for compensation for third parties is summarised. This part of the submission ran to 326 paragraphs. C. Submissions as to the liability of the individual respondents by reason of their involvement in the contraventions of Global and In Touch. This cross-refers to the Liability Schedule --- sorted by distributor. This includes s 75B and the s 6 extensions. Each representation is addressed in the order in which it appears and deals with the liability of each individual respondent. There are separate sections dealing in general with the knowledge and involvement of Frank Yates and Nicholas Yates, Nicholas Rhodin and Russell Fielding of and in the vending machine business. This section runs to 225 paragraphs. D. A table of knowledge acquired by the individual respondents in chronological form, divided by respondents (not comprehensive). E. A separate damages summary schedule in relation to each claim for compensation of a third party. Factual submissions. The s 52 section deals with the evidence of misleading and deceptive conduct by category of representation cross-referenced to the separate summary of pleaded representations. The Franchising Code section relates to the agreements and the alleged contraventions. The evidence relating to all of the relief sought is then summarised and some miscellaneous matters dealt with. This section runs to 210 paragraphs. B. The liability of the individual respondents by reason of their involvement in the contraventions of Global and In Touch --- organised in similar fashion to the corresponding section of the vending machine submission, including analysis by respondent and by representation. This section runs to 124 paragraphs. I should add that counsel for the ACCC were at pains during the hearing to amend the pleading if any discrepancy emerged between it and the evidence. The submissions are a tribute to the diligence of counsel and those instructing them. 43 I shall deal with certain issues raised on behalf of Nicholas Yates and Nicholas Rhodin respectively, although I have reservations about doing so. Nicholas Yates did not appear and pursue a defence during the taking of evidence. Nicholas Rhodin has not filed a defence and took no active part in the case. It is not the role of the Court to become a contradictor on behalf of absent defendants during the course of a hearing. It is unsatisfactory for an inactive respondent to come in at the end of a case such as this and make selective criticisms of the ACCC's case. I should make it clear that this is not a criticism of any of the counsel involved. They have done their best in a difficult situation. However, as leave was given to make submissions, those submissions need to be considered. I have had regard to them, and to the submissions in reply by counsel for the ACCC. I do not propose to deal with the submissions seriatim or in detail. I shall deal with those aspects of them which raise, in my opinion, real issues requiring determination, bearing steadily in mind that the voluminous evidence for the ACCC has not been challenged. 44 I have sketched the facts sufficiently to explain how the contentious issues arise without attempting to be definitive or comprehensive. The case has been organised into two branches --- Vending Machines and Swisscom. However, there is a necessary interplay between the two. I shall, firstly, give consideration to some legal points raised. Despite submissions to the contrary by counsel for the ACCC, in my opinion that decision settled those questions for the purposes of a single judge, with one possible qualification. First, s 51A does not detract from the Yorke principle that actual knowledge of the essential elements of the contravention is required if s 75B or s 80 is to apply. Where the contravening conduct involves misrepresentation, whether as to a future matter or not, this principle requires actual knowledge by the accessorial respondent of the falsity of the representation. This is an essential matter which must be alleged and proved: Su v Direct Flights International Pty Ltd [1999] FCA 78 at [38] , Fernandez v Glev Pty Ltd [2000] FCA 1859 at [18] . If reasonable grounds exist, there will have been no contravention and thus no question of accessorial liability will arise. 47 That does not alter the requirements for proof of accessorial liability (see Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661; Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213 ; (2002) 118 FCR 236 at [154] ---[160]; Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289 ; (2003) 135 FCR 1 per Stone J at [66]---[93]). Of course, proof of knowledge of the elements of the offence is proof to the civil standard based upon the whole of the evidence. There is discussion of it in the judgment of the Full Industrial Court in Wells v John R Lewis (International) Pty Ltd (1975) 25 FLR 194 at 204---206 and in that of Franki J in Swan v Downes (1978) 34 FLR 36 particularly at 40---46. (See also Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549 ; (2001) 114 FCR 472 at [67] , [76]---[79]; and Australian Competition and Consumer Commission v Chen [2003] FCA 897 ; (2003) 132 FCR 309 at [32] . 50 The mere fact that parties to dealings are in different States or that an international party may be involved is not sufficient to establish the necessary connection. The conduct must take place in the course of interstate or international trade or commerce. There are a number of examples of the operation of this extension commencing with Wells v John R Lewis (International) Pty Ltd at 203---204 and including Handley v Snoid (1981) ATPR 40-219 at 42,990; Dickson v Gallagher (1985) ATPR 40-550 at 46,459; Haydon v Jackson (1988) ATPR 40-845 at 49,097 per Fisher J (agreed in by Lockhart J). The decision of Von Doussa J in Snyman v Cooper (1989) 24 FCR 433 at 440---442 favours a wide interpretation of the provision. That point did not arise on the appeal ( Snyman v Cooper (No 2) (1990) 25 FCR 470). Some recent examples include Australian Competition and Consumer Commission v Hughes (2002) ATPR 41-863 at 44,792; Australian Competition and Consumer Commission v Chen at [32]; Quality Corp (Aust) Pty Ltd v Millford Builders (Vic) Pty Ltd [2003] QSC 95 at [37] ---[41]; and Guglielman v Trescowthick [2004] FCA 326 at [85] ---[88]. A Franchising Code of Conduct has been prescribed for the purposes of s 51AE --- see Trade Practices (Industry Codes --- Franchising) Regulations 1998 --- that applies to all franchise agreements entered into on or after 1 October 1998. 53 This case is pleaded against Global and In Touch. The ACCC alleges that upon an examination of each of the pleaded franchising agreements, the evidence of the systems and marketing plans adopted, the commercial symbols used and the payments made by the distributors, these agreements constitute franchising agreements within the plain meaning of cl 4 of the Franchising Code (the requirements of cl 4 are cumulative: Agro Holdings Ltd v Flexi-Coil (Australia) Pty Ltd [1999] FCA 1658 at [36] ). The exception was the agreement with Smith as the performance of the agreement was to take place in New Zealand and therefore does not fall within cl 4. 54 The ACCC further alleges that the corporate respondents entirely failed to comply with Div 2.1 and Div 2.2 of the Franchising Code which set out the statutory obligations of a franchisor (relevantly the corporate respondents as alleged) prior to entering into a franchising agreement (see cl 6 to 11 of the Franchising Code ). The relevant parts of the legislation are discussed by Sundberg J in Australian Competition and Consumer Commission v Simply No-Knead (Franchising) Pty Ltd [2000] FCA 1365 ; (2000) 104 FCR 253 at [4] ---[11]. As stated by Selway J in Australian Competition and Consumer Commission v 4WD Systems Pty Ltd (2003) 200 ALR 491 at [191], the provisions of the Franchising Code are to be read literally. 56 Each of the distributors in both the Swisscom aspect and Vending Machine aspect of these proceedings entered into a distributorship or purchasing agreement with either Global or In Touch. There is now a plethora of cases explaining the context of that inference in various ways. It may be accepted that it does not provide positive evidence to fill a gap in the ACCC's case. However, it may strengthen an inference otherwise available on the evidence or, to put it another way, may make a court more comfortable in drawing such an inference. Of course, the inference has particular application where positive evidence is not challenged. I should add that I do not propose to act upon any inference arising out of the answers to, or the failure to answer, interrogatories in relation to Nicholas Yates or Nicholas Rhodin. I accept that the conduct did take place, and would infer that the false references were for the purpose of buttressing the representations made. That would assist in drawing the inference that those involved knew that the representations had been made and were false. So much is correct. It was then submitted that, in accordance with authorities such as Holloway v McFeeters [1956] HCA 25 ; (1956) 94 CLR 470 at 476 and 480---481 and Luxton v Vines [1952] HCA 19 ; (1952) 85 CLR 352 at 358, the inferences sought to be drawn by the ACCC are no more than speculation or conjecture. As will appear, I reject that submission. I need only say that I accept the closing submissions of the ACCC. It is submitted that he is not responsible for other representations and agreements. It is also submitted that he should not be found to be responsible for any representations that were misleading and deceptive either directly or by virtue of s 51A as it is not demonstrated that he had the requisite knowledge required to establish the breaches alleged pursuant to either s 75B or s 6. 63 I reject those contentions. The evidence referred to by counsel for the ACCC is a sound foundation for drawing the inference that Nicholas Yates was, in effect, an active principal in all the business conducted by Global and In Touch, both in relation to Vending Machines and Swisscom, from the beginning in early March 2001. I am satisfied that he was aware of, and authorised, the making of all of the misrepresentations sued upon. I am satisfied that he authorised the initial representations made by advertisements in each case and knew that there was then no proper or reasonable basis for those representations. He could not have believed them to be true. Further, he very quickly became actually aware of all of the serious deficiencies that occurred in relation to the successful operation of each of the Vending Machines and the Swisscom cards and all of the difficulties and deficiencies complained of by the distributors in relation to the conduct of the distributorships. The submissions in reply for the ACCC adequately answer the points sought to be made on behalf of Nicholas Yates. I reject the argument that these conclusions are speculation and conjecture. All of the facts in relation to Vending Machines and Swisscom taken together present a powerful case of both direct and circumstantial evidence against Nicholas Yates with no evidence in reply from him. I am satisfied that he authorised the representations that continued to be made by those involved in the business and knew that there was no proper or reasonable basis for those representations. In my opinion, it can safely be concluded that he had all the knowledge necessary for the application of s 75B of the Act in relation to the breaches by Global and In Touch. Furthermore, there is direct evidence of considerable use of the relevant postal etc facilities by Nicholas Yates and there was certainly some interstate trade and commerce involved in the relevant dealings. It should be assumed that he was following instructions in what he did. 65 I am satisfied that the evidence referred to by counsel for the ACCC of the direct involvement by Nicholas Rhodin with distributors and their difficulties and complaints and of his close working relationship at all times with Fielding and Frank Yates and Nicholas Yates enables it to be found that he had the relevant knowledge to falsify the representations he made from a relatively early stage of his engagement, which had commenced by 4 May 2001 when he received his first remuneration. Having reviewed the references to Nicholas Rhodin in the chronology of events with the ACCC's submissions in chief and in reply in mind, I am satisfied that by mid-June 2001 Rhodin had adequate personal knowledge to make misleading and deceptive the representations that he made to distributors from then on that are sued upon. However, I am not satisfied that that conclusion should be reached as to his state of knowledge whilst dealing with the Garcias up to signing of the contract with them on or about 6 June 2001. I am satisfied that Nicholas Rhodin had knowledge of all of the elements of the other contraventions of s 52 by Global and In Touch in the other cases sued upon such as to render him liable by virtue of s 75B. I am also satisfied that he was directly liable in those cases identified by the ACCC as involving the operation of s 6. There are some drafting issues that I will discuss with counsel. I have previously questioned why injunctions of this type are limited in time but this is not the case to examine that question as all parties have not appeared. 67 The orders sought to compensate third parties require attention. There is no doubt as to the entitlement in principle to such an order in each case. I am satisfied, in particular, that each respondent was responsible for misleading conduct that contributed to the decision taken by the relevant party or parties respectively to enter into the arrangement leading to loss and damage. That is all that is required ( I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109 per Gaudron, Gummow and Hayne JJ at [57]). 68 Proof of the losses has to be examined. I am satisfied as to the quantum claimed in each case as to the losses flowing from each relationship. There is a question as to parties. In some cases, the relevant agreement was entered into by a company associated with and funded by the individual(s) who were influenced by the misleading conduct. The calculation of damages thus raises the issues discussed in the authorities referred to in Harris v Milfull [2002] FCAFC 442 ; (2002) 43 ACSR 542, particularly Gould v Vaggelas [1985] HCA 75 ; (1985) 157 CLR 215. There may be difficulties in sorting out losses suffered by the shareholders on the one hand and the company on the other. However, in the context of s 87(1B), there does not appear to be any barrier to claiming the overall losses jointly (and not severally) between the shareholder(s) and the company in such a case without dissection where each has consented to the proceeding as required. That is the case with the claims by Radcliffe and Tauto Investments Pty Limited; Bu and Tinson Far Eastern Group Pty Limited; Woldemichael and Red Sea International Pty Limited; Tony Savino and SAV Enterprises Pty Limited (all in relation to Vending Machines); Loncarie and Caslow Pty Limited; King and Flexprint Pty Limited; Vella and Global Mobile Solutions Pty Limited and Smith and Gelco Limited (all in relation to Swisscom). 69 There is no issue in relation to personal claims where no company was involved as with Crispin, Drazetic and Loncar, Elizabeth and Joe Garcia, Raphael, Kim and Sandra Bloom, Petrosyan, Tekirdaglis, Arida and Chaina, Bruce and Lorraine McKenzie, Remme and Kapoor (Vending Machines). 70 There is an issue where the only claim is personal, but where the business was conducted in whole or in part by a company. That was the case in relation to each of Bartlett and Singh (re Vending Machines) and Bowen (re Swisscom). Bartlett entered into the agreement himself, and the company was collateral to that agreement. Singh initially signed the agreement himself, and the early expenses were paid personally but there was a later novation to Perfect Communications Pty Limited. A second agreement was signed by Singh in person. The Swisscom agreement was signed by the Bowens personally. There is no evidence to suggest that any of the companies involved in these cases included external shareholders or carried on any separate businesses that could not be segregated from the company or of the subject businesses. That being so, Gould v Vaggelas permits an analysis that can include loss to the individuals by reference to the effect upon them of the affairs of the company. On that basis the evidence is sufficient to establish the loss claimed, although not as detailed as it might be. 71 Interest should be included in the compensation orders pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) at the rate of 10.5 per cent per year on the whole of each award for the period between the date when the cause of action arose and the date as of which the judgment is entered. 72 The ACCC is entitled to a general order for costs including reserved costs except as against Global and In Touch. There should be a special order as sought in relation to the costs of 10, 25 and 26 May 2005 that were reserved. 73 The proceeding should stand over to 27 February 2006 at 9.30 am at which time the ACCC should bring in short minutes of order. I will direct that all submissions and related documents be retained for 28 days pending the filing of any appeal and for the duration of any appeal. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | misleading or deceptive conduct recruiting distributors for a vending machine business and a swisscom sim cards business including misleading representations as to future matters breach of franchising agreements interrelationship between s 51a and s 75b extension of the act to individuals orders to compensate third parties suffering loss trade practices |
He arrived in Australia on 1 May 2007 and applied to the Department of Immigration and Citizenship for a Protection (Class XA) Visa on 23 May 2007. He claimed to have a well founded fear of persecution due to official corruption. A delegate refused to grant that visa on 20 June 2007 and an application was made to the Refugee Review Tribunal on 17 July 2007 for review. The Tribunal by way of a decision signed on 5 October 2007 affirmed the decision not to grant the protection visa. 2 An application was thereafter made to the Federal Magistrates Court on 20 November 2007 for review by that Court of the Tribunal's decision. The Federal Magistrates Court dismissed the application: SZLQW v Minister for Immigration [2008] FMCA 782. The Appellant now appeals to this Court. 3 Today, when the matter was called on for hearing, there was no attendance by the Appellant. The Appellant, however, had been advised of the date and time of the hearing of this appeal by way of a letter from the National Appeals Registrar of this Court dated 22 July 2008. On behalf of the First Respondent, an application was then made for the appeal to be dismissed pursuant to s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth). Rather than dismissing the appeal, it was considered that the more prudent course was to proceed to hear the appeal in the absence of the Appellant. Such a course is permitted by O 52 r 38A(1)(d) of the Federal Court Rules . (2) If the Court proceeds with the hearing under paragraph (1) (d), the Court may: (a) set aside or vary any order made after so proceeding; and (b) give directions for the further conduct of the appeal. 4 A course of proceeding to hear an appeal in the absence of an appellant is a course which at least ensures that the substance of the appeal has been addressed, albeit without the assistance of the appellant. It is a course which has previously been invoked in the hearing of migration appeals, eg Nadezhkin v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 128 ; SZASL v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 1697 ; VAF v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 123 at [2] , [2004] FCAFC 123 ; 206 ALR 471 at 472 per Finn and Stone JJ. The Tribunal failed to carry out its statutory duty as the Tribunal Member failed to fully consider the current situation of Indonesia is unstable and it is dangerous for me to go back to Indonesia. 2. The Tribunal failed to exercise its jurisdiction by not observing procedures which it was required by the Act to observe. 6 Both Grounds , it should be observed at the outset, fail to expressly identify any error committed by the Federal Magistrate. By failing to identify any such error, the Appellant has not stated " the grounds relied upon in support of the appeal " as required by O 52 r 13(2)(b) of the Federal Court Rules . A failure to comply with that requirement, however, does not render an appeal incompetent: Zegarac v Dellios [2007] FCAFC 58 at [7] per North J (Weinberg and Jessup JJ agreeing). 7 No jurisdiction is conferred upon this Court to conduct a review of the Tribunal's decision upon the basis invited by the Notice of Appeal . The relevant jurisdiction of this Court is its appellate jurisdiction to entertain an appeal from a decision of the Federal Magistrates Court: Federal Court of Australia Act , s 24(1)(d). See also: SZLZM v Minister for Immigration & Citizenship [2008] FCA 1263 ; SZITO v Minister for Immigration & Citizenship [2008] FCA 758 at [4] ---[5], [32] per Greenwood J. 8 Notwithstanding the form of a notice of appeal, it may be that in some circumstances this Court should construe grounds of appeal as but an inelegant attempt to advance a contention that a Federal Magistrate has committed error by not concluding that a Tribunal has committed jurisdictional error. Especially may this be the case where an appellant is unrepresented. But this Court, it is considered, should be astute in ensuring that it is not drawn into exercising an original jurisdiction which it does not possess and an original jurisdiction vested solely in the Federal Magistrates Court: see, ss 476 and 476A of the Migration Act 1958 (Cth). The constraints imposed by the Commonwealth legislature upon the jurisdiction of this Court must be observed. 9 In all cases a notice of appeal should be construed with a view to determining whether it does as a matter of substance set forth grounds which can be properly pursued on appeal. If it does, it may thereafter simply be a question as to whether an order should be made dispensing with compliance with any requirement of the Federal Court Rules pursuant to O 1 r 8. Although compliance with those Rules should not be lightly put aside, compliance should not become an " instrument of oppression ". Equally, however, the fact that a party may be unrepresented and may not comply with Rules of Court cannot be the occasion for this Court exercising a jurisdiction it simply does not possess. Order 1 r 8 confers a " very wide discretion on the Court ": cf Lazar v Taito (Aust) Pty Ltd [1985] FCA 35 ; (1985) 5 FCR 395 at 414 per Neaves J; Grey v Mango Pre Paid Calling Cards Pty Ltd [2004] FCA 1664 at [53] , [2004] FCA 1664 ; 141 FCR 370 at 382---3. And the power conferred by O 1 r 8 " may be exercised ... where there is no apparent injustice and the alleged error can only be one of procedure ": [1985] FCA 35 ; (1985) 5 FCR 395 at 403---4 per McGregor J. It has also been said that " [t]here is no general test to be applied in exercising the discretion given under O 1 r 8, save that the Court ought to do what justice appears to require ": Rishmawi v Minister for Immigration & Multicultural Affairs [1999] FCA 611 at [7] . Kiefel J there concluded that a letter written by the applicant in intended commencement of an application for judicial review should be taken as her application under the Rules . See also: SAAK v Minister for Immigration and Multicultural Affairs [2002] FCA 367 at [43] ---[55], [2002] FCA 367 ; 121 FCR 185 at 193---5 per North, Goldberg and Hely JJ. 10 In the present proceeding, the Respondent Minister contended that the Notice of Appeal should be construed as implicitly meaning that the Federal Magistrates Court erred in not concluding that the Tribunal itself erred in either of the two ways set forth in the Notice of Appeal . To the extent that the Notice of Appeal does not comply with the requirements imposed by the Federal Court Rules , compliance -- it was said -- should be dispensed with. A FAILURE TO CARRY OUT ITS STATUTORY DUTY? 12 So construed, there remain at least two fundamental difficulties confronting the Appellant, namely: the fact that there was little material before the Tribunal upon which it could form any conclusion as to whether or not it was " dangerous " for the Appellant to return to Indonesia, and the fact that this Ground (in any event) impermissibly seeks merit review. 13 Although it is correct to observe, as did the Tribunal, that there may be no onus upon a claimant, it is equally clear that a decision-maker need not make out a claimant's case for him. "[I] t is for the applicant for a protection visa to establish the claims that are made ": SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 at [40] , [2006] HCA 63 ; 228 CLR 152 at 164 per Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ; SZIFB v Minister for Immigration & Citizenship [2007] FCA 1727 at [10] per Jacobson J. 14 In the present case, the now Appellant provided only scant information to the Department or the Tribunal. I owned a grocery business. I supply grocery to the government, recently the President tried to strengthen anti-corruption so my business always by the law. One day a government official asked me to join him and other people to do illegal things. They wanted to corrupt the government and steal money. I knew this was not right so I refused. They became very angry and caused me a lot of trouble as revenge. They make me go out of business. I reported to police but they did not do anything. The government official continue to cause trouble, they burn my business. I ran away but they chased me. I was in hiding for a few days while arranging travel documents. Then I flee to Australia seeking protection. 15 It was thus not surprising that the Tribunal was not satisfied that the now Appellant was a person to whom Australia owed protection obligations under the Refugee Convention . He has provided no details of the nature of his business's involvement in supplying groceries to the government. He stated that a government official suggested he become involved in corrupt activities, but he did not provide details of those activities. He gave no details of how the government official caused him to go out of business, or the circumstances in which his business burned down. He provided no details of the circumstances in which he reported his problem to the police, or the circumstances of their claimed failure to take action. The Tribunal invited the applicant to appear before the Tribunal to give oral evidence and present arguments relating to his claims, and to explore further and test the veracity of his claims, but he did not attend the hearing. The applicant provided no further material or information to the Tribunal with his review application. Given the scant details provided by the applicant regarding his claims, the Tribunal is not satisfied on the evidence before it that there is a real chance that the applicant would be persecuted for a Convention reason if he were to return to Indonesia. The Tribunal is therefore not satisfied that the applicant has a well founded fear of persecution within the meaning of the Convention. 16 The conclusions reached by the Tribunal were all based upon findings of fact open to be made by the Tribunal. The Ground is but an invitation for this Court to conclude that the Tribunal would have reached a different factual conclusion had it " fully " considered the material before it. But the task of making findings of fact is a task entrusted by the legislature to the Tribunal. The " weight " to be given to such evidence as is before the Tribunal is a matter entrusted to the Tribunal alone: cf Abebe v Commonwealth [1999] HCA 14 at [197] , [2004] HCA 32 ; 197 CLR 510 at 580 per Kirby J; Kopalapillai v Minister for Immigration and Multicultural Affairs [1998] FCA 1126 ; (1998) 86 FCR 547 at 552, 559. The Tribunal (in any event) did " fully " consider the claim. The learned Federal Magistrate concluded that the Tribunal had not committed any jurisdictional error in reaching the conclusion that it did. And no error is exposed in that decision of the Federal Magistrate. 17 The first Ground of Appeal is dismissed. A FAILURE TO OBSERVE PROCEDURES? 19 It is not at all clear what the " procedures " were that the Appellant had in mind when drafting this Ground . Potentially they may have been either ss 425 or 426A of the 1958 Act. 20 If it be s 425, this was not a matter expressly raised by the form of application as made to the Federal Magistrates Court or expressly resolved by that Court. The Tribunal did not adequately consider that I had previously discriminated in Indonesia. 2. The Tribunal did not adequately consider that my business was burned down the Government official. 3. The Tribunal did not adequately consider that the current situation of Indonesia is unstable and it is dangerous for me to go back to Indonesia. 21 The learned Federal Magistrate, however, did conclude that the Tribunal was entitled to proceed pursuant to s 426A of the 1958 Act and, to that extent, implicitly concluded that there had also been compliance with s 425. That conclusion was correct. 22 An invitation was given to the now Appellant to appear before the Tribunal as required by s 425(1). That invitation was communicated by way of a letter dated 3 August 2007 which invited the now Appellant to appear before the Tribunal on 11 September 2007. He responded to the invitation on 21 August 2007 indicating that he needed an interpreter. But he did not appear on the September date. 23 There has been no non-compliance with s 425. 24 If the second Ground of Appeal is intended to refer to s 426A, the form of the application as filed with the Federal Magistrates Court would again tend to indicate that it was not a matter raised for resolution in that Court. 25 Moreover, it is a Ground without substance. The authority of the Tribunal, to proceed to make a decision, conferred by s 426A(1) is dependent upon those two jurisdictional facts being satisfied: SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 at [35] , [2007] HCA 35 ; 237 ALR 64 at 73---4 per Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ. Section 425A(4) provides that where a person is invited to appear before the Tribunal a notice " must contain a statement of the effect of section 426A ". Plainly, the requirement in s 425A(4) is to ensure that the notice alerts an applicant to the consequences of not appearing in the face of an invitation to appear, the material consequence being that the Tribunal can make a decision without taking any further action which would result in the applicant appearing before the Tribunal. In my opinion the notice conveys this. See also: SZICU v Minister for Immigration and Citizenship [2008] FCAFC 1 at [13] ---[17], 100 ALD 1 at 4---5 per Tamberlin, Finn and Besanko JJ. Please note that the Tribunal may make a decision without further notice, if an applicant invited to appear before the Tribunal fails to attend the scheduled hearing. That is sufficient compliance with s 425A(4). 27 Both of the requirements were satisfied in the present case and the Tribunal was thus permitted to proceed in circumstances where the now Appellant failed to appear. 28 The second Ground of Appeal should also thus be dismissed. 29 The Appeal should be dismissed with costs. The appeal be dismissed. 2. The Appellant to pay the costs of the First Respondent. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | failure of appellant to attend appeal determined in absence of appellant dispensing with requirement to state grounds of appeal merits review migration |
PRACTICE AND PROCEDURE --- precedent --- whether previous decision of single Judge should be followed --- whether previous decision 'plainly wrong'. The residuary beneficiaries were William Meinhardt's three children, Victoria Treyvaud, Sally Veall, and William Edward Meinhardt. No application for probate had been made when, on 23 November 2005, William Meinhardt Jr commenced proceedings in the Supreme Court of Victoria against the executors under s 15 of the Administration and Probate Act 1958 (Vic) in which they sought orders that the executors show cause why they should not renounce probate of the will and why administration of the will should not be granted to State Trustees Ltd. On 22 December 2005 the executors commenced their own proceeding in the Supreme Court in which they applied for probate of the will. On 16 March 2006 the Supreme Court ordered that the two proceedings be heard together. 2 On 4 July 2006, the executors issued a summons in the proceeding which they had commenced in the Supreme Court under which they sought orders that they have leave to renounce their application for probate in favour of State Trustees Ltd or another nominated corporate trustee. This proceeding and the proceeding commenced by William Meinhardt Jr remain pending in the list of the Supreme Court. The parties to those proceedings have agreed to seek an adjournment of them until after 21 September 2006. 3 On 1 May 2006 the present proceeding was commenced in the Federal Magistrates Court. The applicant petitions for an order for the administration in bankruptcy of the estate of William Meinhardt Sr pursuant to s 244 of the Bankruptcy Act 1966 (Cth). The executors, and the children of the deceased, were served with the petition. On 21 June 2006 the Federal Magistrates Court ordered that Victoria Treyvaud and William Meinhardt Jr be joined as respondents, and that the executors be excused from further appearance in the proceeding. I shall refer to that judgment further below, it being sufficient here to relate that the Federal Magistrates Court considered it more appropriate that the argument whether that judgment was 'plainly wrong', if there were to be such an argument, should be had in this Court, rather than in that Court. For this and other reasons to which that Court referred, on 19 July 2006 the proceeding was transferred to this Court. It was submitted by Mr Bigmore QC, who appeared with Mr Lyons for William Meinhardt Jr, that the applicant required the leave of the Court before presenting the petition which it had purported to present on 1 May 2006, although he accepted that, if that leave were now to be sought and granted, the grant could validly operate nunc pro tunc. Mr Sifris QC, who appeared with Mr Fary for the applicant, submitted that leave was not required in the circumstances of this case. Mr Foster, the solicitor for Victoria Treyvaud, made submissions on some legal issues arising, without indicating any particular position with respect to the application of subs (13) in the circumstances. 6 The burden of Mr Bigmore's submission was that the Supreme Court proceedings to which I have referred are, either separately or taken together, 'proceedings ... in a court for the administration of a deceased person's estate under a law of a State or Territory' within the meaning of subs (13). Mr Sifris took issue with that proposition, contending that the Supreme Court proceedings were concerned only with identifying, and empowering according to law, the person or persons who would thereafter be responsible for the administration of the estate of William Meinhardt Sr. He relied upon the judgment in Gonzalez in support of the proposition that the 'administration' to which subs (13) refers is a general administration of the whole estate of the kind that was once done in Chancery, or a more limited analogue of that description of administration for which, for example, Pt 54 of the Rules of the Supreme Court of Victoria now provides. 7 In the period leading to about the middle of the nineteenth century in England, the Court of Chancery exercised a jurisdiction whereby it undertook the general administration of a trust, or a deceased estate. A decree for general administration was made as of course upon application by a beneficiary. The history of the proceeding is set out in the judgment of Young J in McLean v Burns Philp Trustee Co Pty Ltd (1985 ) 2 NSWLR 623. The court would order that the trust was to be specifically performed under its supervision, that nothing was to be done without its imprimatur, that accounts should be taken to see what the trust assets were and the court would give directions as to how the trust would be carried out. It was common for estates to be administered in Chancery and testators sometimes even directed in their wills that the estate should be so administered. If the assistance of the court was required, the only relief available was the making of a full administration order. This terminated the authority of the representative to administer and put the whole of the administration in the hands of the court, a necessarily expensive and slow matter. A full administration order required (and still requires, if one were to be made) accounts to be taken of the testator's debts, and of his property come to the hands of the representatives and an inquiry as to what part of his property was outstanding or undisposed of, and whether it was subject to incumbrances. There was (and theoretically still is) machinery for advertising for creditors, requiring creditors to come in and prove their claims, and for examining the representatives' accounts. There is a simpler and more flexible procedure under which a beneficiary may obtain particular relief in relation to a deceased estate or a trust, without the need to place the whole estate or trust under the general administration of the court. In Victoria, that procedure is established by Pt 54 of the Rules of the Supreme Court of Victoria . However, courts of equity retain their jurisdiction to make general administration decrees, even if the existence of that jurisdiction may be regarded, in contemporary times, as theoretical. Indeed, in McLean itself, although Young J ultimately did not make the (interlocutory) general administration order which had been sought in the proceedings before him, his refusal to do so depended in no sense upon a view that jurisdiction was lacking, or that an order for general administration could no longer be made by a court of equity. 9 In the proceedings before me, Mr Sifris argued that a proceeding for administration by the court, of either the traditional, general, kind or the more flexible and specific kind for which Pt 54 of the Rules of the Supreme Court of Victoria provides, is the kind of proceeding to which s 244(13) of the Bankruptcy Act refers. He said that a proceeding of this kind was conformable with the natural meaning of the phrase 'proceedings ... in a court for the administration of a deceased person's estate'. 10 Mr Bigmore submitted that so to construe subs (13) was to narrow down the natural meaning of the words found therein without any apparent grammatical or contextual justification. While accepting, as I understood him, that the subsection did extend to proceedings for general administration or under Pt 54 , he submitted that the natural meaning of the words extended also to a situation in which someone had applied for a grant of probate, or for letters of administration, in relation to a deceased estate. In these situations, the estate would be administered by or under the direction of the person to whom the grant had been made, and proceedings in a court were necessary to obtain the grant. 11 As I have indicated above, I was referred to materials which illuminated the history, utility and drawbacks of the proceeding by way of general administration. Historically, that s 244(13) might contain an intended reference to such a proceeding (or to the more limited form under rules of court) could not be regarded as an absurdity, or even an oddity. It is true that the procedure for general administration had fallen into considerable disfavour by the time of the enactment of the Bankruptcy Act 1924 (Cth), but its replacement by the more efficient procedure under rules of court makes inevitable the conclusion that proceedings for the administration of deceased estates or trusts by a court would have been within the reasonable contemplation of the legislature at the time. Neither these considerations, nor the arguments in support of them, ultimately points with conviction to a particular outcome on the matter of construction. As I shall indicate presently, however, it was no part of Mr Bigmore's argument that there might not already be a validly appointed legal personal representative at the stage when s 244(13) was called upon to play its part. In the facts which led to that judgment, the executrix was granted probate of the will of the deceased on 6 August 1997. On 6 April 1998, a creditor filed a petition under s 244 of the Bankruptcy Act for the administration of the deceased estate in bankruptcy. It was contended that subs (13) operated as a bar to the presentation of the petition. The response to this was that s 244(13) referred only to proceedings in the nature of a general administration, and was inapplicable where the only proceedings were those which had lead to the grant of probate. Emmet J accepted that response. He said that the purpose of s 244(13) was 'to ensure that there are not two courts administering an insolvent estate or administering the estate generally'. Administration suits in Australia are in fact rare for the reasons which I have briefly indicated. The purpose of s 244(13) is to ensure that where an order for the administration of an estate has been made by the Supreme Court of a State or Territory, the effect of which is to prevent any dealings with the estate otherwise than under the direction of the Court, the Bankruptcy Court will not, in conflict with such an order, seek to administer the estate. First, he submitted that Gonzalez was concerned with a situation in which the probate proceedings in the Supreme Court had been completed by the time the s 244 petition was presented. On his construction of subs (13), the opening words --- 'where proceedings have been commenced' --- carry the sense of proceedings which have been commenced, but remain pending, as at the date of the presentation of the bankruptcy petition. Mr Bigmore said that Emmet J's judgment was correct on the facts before him, since the probate proceedings in the Supreme Court were well concluded before the bankruptcy proceedings commenced in this Court. He submitted, accordingly, that Gonzalez should be distinguished. 15 I do not think that Gonzalez may be distinguished in this way. It is not a situation in which an earlier case has been decided a particular way because of a fact or circumstance which does not exist in the instant case. It is, rather, a situation in which an earlier case has been decided by reference to a particular rule or proposition, whereas it might equally have been decided the same way by reference to a different rule or proposition having application to facts or circumstances which differ from those existing in the instant case. In the latter situation, the rule or proposition by reference to which the earlier case was in fact decided constitutes its ratio decidendi. It is true, of course, that the ratio decidendi of a decided case extends no further than the rules and propositions which were essential for the course of reasoning which led the case to be decided in the way that it was. However, this does not justify a later court in effectively deconstructing the earlier court's process of reasoning by postulating a more limited basis upon which the earlier case might have been, but was not, decided. 16 Mr Bigmore's second submission was that Gonzalez was plainly wrong. He accepted that I should follow the judgment of another single judge of this Court unless I was persuaded that it was plainly wrong: see Cooper v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205, [46]; Minister for Immigration and Multicultural and Indigenous Affairs v SZANS [2005] FCAFC 41 ; (2005) 141 FCR 586, [38]. It suggests that the error must be manifest or, if it does not rise to that level, at least capable of being easily demonstrated. In a sense, the error must be so clear as to enable a later court to say that the point is not reasonably arguable. I do not so read his Honour's reasons. He stated that the purpose of the subsection was 'to ensure that there are not two courts administering an insolvent estate or administering the estate generally. ' Mr Bigmore submitted that his Honour's identification of the purpose of the provision was unsupportable. He said there was no reason to suppose that the legislature was concerned with dual administrations --- otherwise, why would subs (13) contemplate that leave might be granted to present a petition under s 244 in some cases? He submitted that, whatever was the purpose of the provision, it could not be the avoidance of dual administrations. I must say that I am unpersuaded by Mr Bigmore's submissions on this point. It is not uncommon, when a statute seeks to deal with some vice or problem, for a general injunction to be accompanied by a facility for the making of exceptions in the discretion of a court or, depending on the context, a public official. If --- as I have no reason to doubt --- it may be assumed that dual administrations by different courts would generally be regarded as inconvenient, I cannot see how the reservation of a discretionary power to permit such a circumstance to arise in the exceptional case throws into doubt the validity of the original assumption. 18 Mr Bigmore also submitted that, if subs (13) were limited as proposed by Emmett J, it would have no work to do, since equitable decrees for general administration are now all but unknown. This submission, however, fails to appreciate that his Honour treated the modern procedure under various rules of court as analogous to the older procedure for general administration. Clearly, if construed as proposed by his Honour, subs (13) would still have a deal of work to do in the modern environment. 19 I am a considerable distance from forming the view that the judgment in Gonzalez was wrong, much less plainly wrong. In the circumstances, I am bound to follow, and I do follow, the judgment in Gonzalez . It follows that I rule that there is nothing in s 244(13) of the Bankruptcy Act which would constitute a bar to the commencement to this proceeding. | creditor's petition for administration of estate of deceased person pending applications in state court for probate and letters of administration whether bar to creditor's petition whether leave of the court is required "proceedings for the administration of a deceased person's estate". precedent whether previous decision of single judge should be followed whether previous decision 'plainly wrong'. bankruptcy practice and procedure |
The Tribunal set aside the decision of the Commission which found that medical conditions from which the respondent ('Mr Robertson') suffers are not defence caused. By the end of his naval career he had attained the rank of Chief Petty Officer. On 3 June 1969 Mr Robertson was serving on HMAS Melbourne when it collided with USS Frank E Evans. As a diver his duties immediately following the collision included recovery of survivors, bodies and body parts. Subsequently he experienced psychological stressors caused by his involvement in a diving incident in Hong Kong; being in proximity to HMAS Melbourne and experiencing a fire on HMAS Supply. 3 Following his discharge from the RAN in 1988 Mr Robertson claimed to suffer from post traumatic stress disorder ('PTSD'), alcohol dependence and major depression. On 12 September 2003 Mr Robertson lodged a claim with the Commission for a Disability Pension in respect of such conditions on the basis that they were related to his service in the RAN. 4 In its decision of 28 April 2004 the Commission determined that Mr Robertson's depressive disorder, PTSD, alcohol dependence or alcohol abuse and hypertension were not service related diseases or injuries within the meaning of s 70 of the Veterans' Entitlements Act 1986 (Cth) ('the Act'). Mr Robertson appealed such decision to the Veterans Review Board ('the VRB') on 11 May 2004. 5 On 2 December 2004 the VRB affirmed the Commission's decision. On 16 February 2005 Mr Robertson lodged an Application for Review of the VRB's decision with the Tribunal. On 7 March 2007 the Tribunal set aside the decision of the VRB and determined that Mr Robertson's PTSD, alcohol dependence and major depression were related to his 'eligible service'. 6 By Amended Notice of Appeal filed on 30 July 2007 the Commission appeals to this Court from the decision of the Tribunal. 8 Section 70(5) makes provision for the circumstances in which an injury or disease suffered by a member of the Forces shall be taken to be defence caused. Such circumstances include those in which a member of the Forces suffers aggravation of or contribution to a condition due to defence service rendered after the member suffered the injury or contracted the disease: see s 70(5)(d). 9 Part XIA of the Act provides for the establishment, functions and powers of the Repatriation Medical Authority ('the Authority'). Section 196B thereof sets out the functions of the Authority and relevantly provides, inter alia, for the determination by it of a Statement of Principles ('SoP') in respect of various kinds of conditions, and factors which must exist and be related to service rendered by a person before it can be said that a reasonable hypothesis has been raised connecting such conditions with the service rendered. 4 of 1999) ('the SoP for PTSD'), Statement of Principles for Depressive Disorder (SoP No. 59 of 1998) ('the SoP for Depressive Disorder') and Statement of Principles for Alcohol Dependence or Alcohol Abuse (SoP No 77 of 1998) ('the SoP for Alcohol Dependence'). 11 Clause 2(b) of the SoP for PTSD provides a comprehensive definition of such condition which includes requirements that a person has been exposed to a traumatic event, as defined; the traumatic event be persistently re-experienced in a number of defined ways; the person engages in persistent avoidance of stimuli associated with the trauma and experiences a numbing of general responsiveness; the person experiences persistent symptoms of increased arousal not present before the trauma; the duration of the symptoms be more than one month; and that the symptoms cause the person clinically significant distress or impairment in social, occupational or other important areas of functioning. 12 Clause 5 of the SoP for PTSD states the factors which must exist before it can be said, on the balance of probabilities, that PTSD is connected with the circumstances of a person's relevant service. The Tribunal concluded that if such incident was the sole cause of the PTSD, it occurred outside his period of 'eligible service' because the incident occurred before 7 December 1972 (see s 68 of the Act). Accordingly it was not related to his 'eligible service'. The Tribunal also considered that other incidents namely the diving incident in Hong Kong in 1974 while on board HMAS Stuart, the stress episodes which occurred at least three to six times per year suffered by Mr Robertson whilst continuing to serve on HMAS Melbourne, and a fire on HMAS Supply, were each severe stressors ('the subsequent stressors'). In any event, the SoP operates, by factor 5(a) to establish a connection to service (experiencing a severe stressor prior to the clinical onset of post traumatic stress disorder). Section 120B of the Act establishes war causation where there is material that raises a connection between a disease and service and a SoP upholds that connection. Both requirements are met here and so Mr Robertson's post traumatic stress disorder is war caused. The Tribunal found that Mr Robertson's alcohol dependence ' had its clinical onset sometime in the 1990s but no later than 1997' when it was formally diagnosed. The Tribunal concluded that 'on the balance of probabilities, Mr Robertson had post traumatic stress disorder at the time of the clinical onset of his alcohol dependence' . 17 The relevant factor for major depression as found by the Tribunal, requires the claimant to 'have a clinically significant psychiatric condition within the one year immediately before the onset of depressive disorder' : see clause 5(b) the SoP for Depressive Disorder. The latter section relevantly defines 'defence service' as 'continuous full-time service rendered as a member of the Defence Force on or after 7 th December 1972 and before the terminating date' . The terminating date is defined in s 68(1) of the Act as 7 April 1994, the date upon which the Military Compensation Act 1994 (Cth) commenced. In consequence, it is submitted that the Tribunal should have considered whether Mr Robertson's PTSD, alcohol dependence and major depression were 'defence caused' pursuant to s 70(5) of the Act. 20 Mr Robertson agrees with the Commission's submission and agrees that the Tribunal erroneously referred to s 9(1)(e) of the Act. It is also agreed that the Tribunal erroneously referred to 'war caused' disease of Mr Robertson in its decision instead of 'defence caused'. Mr Robertson acknowledges that because his PTSD was found to have had its clinical onset in 1994 (after termination of Mr Robertson's defence service), the Tribunal's reference to 'the contribution, to a material degree' adopting the wording of s 9(1)(e) and s 70(5)(d) was irrelevant as the issue raised by these sections is whether an injury or disease was contributed to in a material degree or was aggravated by any eligible war service or defence service respectively rendered after the injury was suffered or the disease was contracted. Mr Robertson refers to Comcare v Sahu-Kahn [2007] FCA 15 ; (2007) 156 FCR 536 at [16] and submits that the adoption by the Tribunal of the wording in s 9(1)(e) and s 70(5)(d) required a more onerous test than that required by s 70(5)(a) of the Act which Mr Robertson submits is the section to which the Tribunal should have had regard. Such provision renders an injury 'defence-caused' if it arose out of, or was attributable to, defence service. Accordingly s 70(5)(d) precluded the Tribunal from finding that Mr Robertson's PTSD was defence caused unless either Mr Robertson developed PTSD during, or prior to, his defence service and the PTSD was contributed to or was aggravated by his defence service. Because the Tribunal did not refer to s 70(5)(d) it failed to apply the correct test for determining whether Mr Robertson's condition was contributed to in a material degree or was aggravated by defence service rendered after he developed PTSD. 22 Mr Robertson submits such errors made no difference because the statutory provisions which establish the necessary causal relationships between the service and disease or injury contained in s 9(1) and s 70(5) respectively are virtually the same for 'eligible war service' and 'defence service'. The relevant SoP all applied to 'eligible service' which is defined in clause 8 of each SoP to include 'eligible war service' and 'defence service' with the result that the factors required by the SoP for both forms of service were identical. The Commission submits that there was no expert evidence to suggest that the subsequent stressors would have been one of the causes of Mr Robertson's PTSD and that since there was evidence to show that PTSD arose before Mr Robertson's defence service, and that the clinical onset of PTSD did not occur until 1994, the Tribunal's enquiry into the intervening stressors was irrelevant. 24 Mr Robertson acknowledges that the clinical onset of PTSD occurred in 1994. However Mr Robertson submits that the issue before the Tribunal was not one of aggravation of an existing condition. Rather the issue before the Tribunal was whether the subsequent stressors were in themselves the causes for the onset of Mr Robertson's PTSD in 1994. Mr Robertson relies upon the Tribunal's observations that a number of stressors will exacerbate or make a condition worse than it would have been if there was only one stressor and submits that the Tribunal was entitled to find that the subsequent stressors would ' add their measure ' to the final manifestation of Mr Robertson's PTSD. That is, the subsequent stressors each were part of the cause of Mr Robertson's PTSD. As such, the requirement of s 70(5)(a) was satisfied. Mr Robertson submits that the subsequent stressors satisfied the test in clause 5(a) of the SoP for PTSD which requires the claimant to have experienced a severe stressor prior to the onset of PTSD. He submits that no expert evidence was required to support the claim that the subsequent stressors were, by themselves, causes of Mr Robertson's PTSD in view of the finding that Mr Robertson had suffered severe stressors prior to the onset of his PTSD. 25 Accordingly Mr Robertson submits that despite the errors of the Tribunal in applying the criteria 'eligible service' instead of 'defence service' and also referring incorrectly to s 9(1)(e) of the Act, it makes no difference to the result since the facts as found also satisfy the criteria posed by s 70(5)(a) of the Act. Mr Robertson submits that he was entitled to succeed in his claim if s 70(5)(a) was satisfied and the existence of severe stressors during his service culminated in the diagnosis of PTSD which was made in 1994. The Tribunal was so satisfied because it found that whilst the collision between HMAS Melbourne and USS Frank E Evans was 'the instigator' of Mr Robertson's PTSD, the subsequent stressors ' added their measure ' to the final manifestation of the condition in 1994. Section 70(5)(d) of the Act is relevant if aggravation of Mr Robertson's PTSD is claimed. However s 70(5)(d) and clauses 5(b) and 6 of the SoP for PTSD which implement it, could not apply to Mr Robertson unless he had contracted PTSD during his defence service or prior to such service, and the PTSD was contributed to in a material degree by such service. This was not the case as found by the Tribunal. 27 For Mr Robertson to satisfy the test that his PTSD was defence caused, Mr Robertson had to experience a severe stressor and s 70(5)(a) of the Act applied if the Tribunal intended to find that the subsequent stressors were causes of the PTSD. The Tribunal did not refer to s 70(5)(a). 28 Nowhere in its decision did the Tribunal refer to the correct statutory provisions which applied to determine Mr Robertson's statutory entitlement. Further, the reference to s 9(1) of the Act demonstrates an obvious error by the Tribunal. Section 9(1) of the Act applies to 'war-caused' injuries related to 'eligible war service' as defined in s 7 of the Act. Section 9(1) is irrelevant to Mr Robertson whose entitlement to a pension will be based upon his 'defence service', and not 'eligible war service' as considered by the Tribunal. 29 Even though the text of s 9(1)(e) and of s 70(5)(d) are similar, this circumstance does not detract from the conclusion that the wrong test was applied by the Tribunal. The failure of the Tribunal to refer to the correct statutory provision demonstrates that the Tribunal asked itself the wrong question. Jurisdictional error therefore exists in its decision: see Anisminic Ltd v Foreign Compensation Commission [1968] UKHL 6 ; [1969] 2 AC 147 at 171; Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179. Whether such error is by itself sufficient to warrant the setting aside of the Tribunal's decision is a matter within the Court's discretion. 30 The Tribunal concluded that the subsequent stressors 'add their measure' to the initial stressor sustained by Mr Robertson (the collision between HMAS Melbourne and USS Frank E Evans). However, he allowed that subsequent stressors can make a psychiatric disorder worse. He also agreed that a number of significant stressors will make a condition worse than it would be if there had been only one stressor. Dr Reinhardt characterised the Melbourne --- Evans collision as the initial stressor that "sparked the whole thing off" but considered that later stressors would have an exacerbating effect. She also considered that an incident that was, in effect, a re-experiencing of the initial stressor can be characterised as a stressor in itself. See also Repatriation Commission v Bendy (1989) 18 ALD 144 at 146. 34 The term 'clinical onset' is not defined in the Act. 35 As was recognised by Gray J in Mines v Repatriation Commission (2004) 40 AAR 238 at [39], one or more possible traumatic events might exist and the making of a determination as to which of the events was responsible for the condition may be required: see also Bendy 18 ALD 144. However it is essential to identify the stressor occurring during defence service which resulted in the PTSD to satisfy Clause 5(a) of the SoP for PTSD. Unless such stressor or stressors experienced during defence service led to such clinical onset, they are irrelevant. 36 The reasoning of the Tribunal does not establish the basis for its conclusion that the subsequent stressors 'add their measure' to the final manifestation of Mr Robertson's PTSD. That incident occurred outside his period of eligible service and so, if it is the sole cause of his post traumatic stress disorder, which I have found had its clinical onset in 1994, then that disorder is not related to his eligible service. However, the Tribunal's finding that there was no need to consider whether there was worsening of PTSD because the clinical onset of PTSD did not occur until 1994, 'much later than any of the stressors claimed by Mr Robertson' , suggests that the Tribunal considered that any one of those stressors could have caused the PTSD. Accordingly the Tribunal's observations appear to be inconsistent. 38 In these circumstances the Court finds that the Tribunal, by failing to refer to s 70(5)(a) of the Act, has misdirected itself in respect of the correct test to be applied in determining whether Mr Robertson's PTSD was defence-caused. In this respect Mr Robertson conceded that the Tribunal erred in law. 41 The parties differ on the question whether the Court should determine that Mr Robertson's alcohol dependence was not defence-caused as submitted by the Commission or whether the question should be remitted to the Tribunal as urged by Mr Robertson. For the reasons stated hereunder, the Court will refer this issue to the Tribunal. 43 The clinical onset of such a condition is a diagnostic issue requiring medical opinion: see Cornelius [2002] FCA 750 at [28] ; Lees [2002] FCAFC 398 ; 125 FCR 331; Repatriation Commission v Milenz (2006) 43 AAR 565 at [34]; Repatriation Commission v Brady [2007] FCA 1087 at [36] . 44 Unless the Tribunal was satisfied that Mr Robertson had 'a clinically significant psychiatric condition within one year immediately before the clinical onset of depressive disorder' , clause 5(b) of the SoP for Depressive Disorder could not establish a connection between Mr Robertson's depressive disorder and his defence service. 45 In view of the Tribunal's application of the erroneous tests referred to above in relation to Mr Robertson's PTSD, namely the failure to find that Mr Robertson's service was 'defence service', and whether the PTSD was 'defence-caused', the Tribunal misdirected itself. Further, in consequence of the finding in relation to the cause of Mr Robertson's PTSD, the findings of the Tribunal relating to the depressive illness cannot be maintained as any finding is dependent upon the existence of Mr Robertson's PTSD as being defence caused. 47 Mr Robertson submits that the Tribunal's findings relating to his PTSD and depression should be upheld, and that only the claim relating to his alcohol dependence should be referred to the Tribunal for redetermination. 48 The Court is not satisfied that if the Tribunal had addressed the correct questions, its decision would be the same, irrespective of the error: see Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 384. The errors of the Tribunal include the reference to eligible service under s 9(1) when the correct test was contained in s 70(5) of the Act; the reference to 'war service' when the only service relevant was Mr Robertson's 'defence service'; the failure to refer to the correct provisions in s 70(5) of the Act; and the finding made in the absence of evidence of Mr Robertson's alcohol dependence. The Tribunal did not identify the correct issues which it was required to determine and accordingly fell into jurisdictional error: see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 347-348. 49 In view of the above findings of error in the decision of the Tribunal, the Court is not of the opinion that it would be 'futile to remit the matter' : see Arnott v Repatriation Commission [2001] FCA 262 ; (2001) 106 FCR 83 at [36] . Rather the Court considers that there is a possibility that a different result would be reached on such remitter: see Santa Sabina College v Minister for Education (1985) 58 ALR 527 at 540; and Nguyen v Minister for Immigration and Multicultural Affairs (1998) 88 FCR 206 at 213-214. 50 Accordingly the Court orders that the Tribunal's decision be set aside and the proceedings be remitted for determination by a differently constituted Tribunal pursuant to s 44(5) of the Administrative Appeals Tribunal Act 1975 (Cth). I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | whether injuries or disabilities related to eligible service wrong test identified and decided by administrative appeals tribunal findings made in the absence of evidence whether futile to remit to administrative appeals tribunal upon the possibility of a different outcome being reached. veteran's entitlement |
The applicant, Mr Goodin, was appointed the liquidator of the Society for the purposes of its winding up. Mr Goodin has paid all the Society's debts but was left with $124,350 that he was unable to distribute. On 25 July 2008 I ordered that this amount be paid to the Australian Securities and Investment Commission (ASIC) to be dealt with under Pt 9.7 of the Corporations Act 2001 (Cth). I will briefly explain why that order was made. 2 The Society, originally known as the Grand Lodge of the Grand United Order of Free Gardeners, was first established as a friendly society under the Friendly Societies Act 1958 (Vic). In 1999 the Society became a company limited by guarantee. This came about by the Financial Sector Reform (Amendments and Transitional Provisions) Act (No 1) 1999 (Cth). Schedule 3 of that Act inserted a new Sch 4 in the Corporations Law, the object of which was to facilitate the registration of building societies and credit unions and related bodies as companies under the Corporations Law. It achieved this object by providing that on "the transfer date" (in the event, 1 July 1999) each transferring institution was taken to be registered under the Corporations Law: Sch 3, Pt 1. Each society or credit union was taken to be registered as a specific type of company. For example, a friendly society with no shares on issue (i.e. a friendly society such as the Society) was taken to be registered as a company limited by guarantee. 3 One of the Society's principal objects was to maintain a funeral fund. The benefit payable on the death of a member of the funeral fund was $5,500. On the death of the spouse, widow, or widower of a member the benefit was $2,750. An endowment benefit of $300 was payable when a member reached 65 years or died before reaching 65. According to its rules the Society was required to keep the funeral fund and its other funds (a management fund, a management reserve fund and a fraternal management fund) "separate and distinct from each other". 4 Over the years the Society lost contact with many of its members, including those who had joined the funeral fund. Some of those members or their families had a claim on the funeral fund. Attempts were made to locate the whereabouts of those members. The attempts included searching Melbourne telephone directories and speaking with other members. As a result some members or their heirs were located and the benefits to which they were entitled were paid. 5 In May 2006, following a review of the Society by the Australian Prudential Regulation Authority, a provision of $118,250 was made in the Society's accounts for "untraceable members funeral entitlements". The provision was made in relation to 16 members whose whereabouts was unknown. 6 When the Society was wound up the liquidator applied to have determined what he should do with the fund. Prior to hearing the provision was increased to $126,500 when inquiries revealed that a further 3 members could not be located. 7 In the first instance the liquidator was ordered to make additional inquiries to locate the missing members. In particular, he was ordered to conduct searches at the Office of the Registrar of Births, Deaths and Marriages, the Probate Office of the Supreme Court of Victoria and the Public Record Office Victoria to ascertain whether any members had passed away and to place an advertisement in a local newspaper stating that "any person who thinks that they or a member of their family may be or have been a member of the Society's Funeral Fund should ... contact the liquidator". He also undertook searches of the electoral roles. As a result of those inquiries 8 missing members or their families were located and their benefits paid. This still left the liquidator with a substantial sum which had to be dealt with before the liquidation could be finalised. 8 Ms Porter, who appeared for the liquidator, took me through a complex series of legislative provisions to demonstrate that the fund should be paid to ASIC. In substance Ms Porter's submission was that the provisions dealing with unclaimed money found in the Life Insurance Act 1995 (Cth) and in Sch 4 of the Corporations Act , one or other of which might be thought to have applied to a transferring friendly society, did not apply. That left s 544 of the Corporations Act as the only applicable provision. 9 Turning first to the Life Insurance Act , it is clear the Society fell under the Act's operation. This is so for two reasons. First, Pt 2A of the Life Insurance Act contains special provisions relating to life companies that are friendly societies. For the purposes of this Part, s 16C provides that a friendly society is a body that is registered under the Corporations Act that is taken to be registered under the Life Insurance Act because of Item 11 of Sch 8 to the FSR Act. Relevantly that Item provides that a friendly society is taken to be registered under the Life Insurance Act if (a) before the transfer date it was a friendly society and (b) it carried on business before the transfer date through one or more eligible benefit funds. Item 10 defines an "eligible benefit fund" to be a benefit fund for the purposes of the Friendly Societies Codes. The funds maintained by the Society answered that description. 10 The second reason is that the Society carried on a life insurance business in Australia. A person carries on a life insurance business if its business includes the issuing of life policies: Life Insurance Act , s 11. A contract of insurance that provides for the payment of money on the death of a person is a life insurance policy: s 9. Payments out of the funeral fund are payable on the death of a member of the fund. 11 The Life Insurance Act provides how a life company is to deal with "unclaimed money". Section 216(1) states that a life company must give ASIC a statement of all unclaimed money held at the end of each calendar year. It must at the same time pay to the Commonwealth an amount equal to the amount of the unclaimed money: s 216(3). If ASIC certifies that the company would have paid unclaimed money to a person, that money must be refunded and the treasurer must direct the company to pay the money to the person entitled to it: s 216(7). 12 It will be seen that money is "unclaimed money" only if a policy holder has a legal entitlement to be paid that money. In this case, however, it is impossible to say whether a missing member is entitled to a benefit. This is because the missing member or his spouse may still be alive. Accordingly, one simply does not know whether the criterion for "unclaimed money" has been satisfied. 13 In 2001 the Company Law was repealed. The provisions in Sch 4 were reproduced, with certain amendments and alterations, in Sch 4 of the Corporations Act . The Schedule makes provision for unclaimed monies held by a transferring friendly society. Clause 37(2)(b) relevantly provides that "[o]n and from the transfer date, section 544 applies to an amount of money that, immediately before the transfer date, is covered by section 544 as applied by ... section 403 of the Friendly Societies Code". 14 The Friendly Societies (Victoria) Code of Victoria, which was found in Sch 1 of the now repealed Friendly Societies (Victoria) Act 1996 (Vic), provided in s 403 that Pt 5.6 of the Corporations Law applied with all necessary modifications to or in relation to the winding up or dissolution of a transferring friendly society. By reason of s 11(1) of the Corporations (Ancillary Provisions) Act 2001 (Vic) the reference to the Corporations Law in the Code is taken to include a reference to the Corporations Act . 15 If these provisions applied to the fund held by the liquidator, it would have to be paid to the Minister administering the Unclaimed Moneys Act 1962 (Vic) which, in Victoria, is the relevant unclaimed money law. But the only money to which the provision in its modified form applies is money that prior to the transfer date had become payable by the Society. As I have noted, one does not know whether any untraceable member had died before the transfer date and hence it cannot be said that there was an obligation to pay any part of the fund to any member. 16 As neither Sch 4 of the Corporations Act nor s 216 of the Life Insurance Act applied to the fund held by the liquidator, the only provision that dealt with the fund was s 544(1) of the Corporations Act . That applied because the liquidator had in his hands an "unclaimed or undistributed amount of money". According to the section the liquidator was required to pay the fund to ASIC to be dealt with under Pt 9.7. 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 friendly society registered as a corporation under the corporations law fund held by liquidator unclaimed moneys how dealt with corporations |
Cons Mins owns and operates a manganese mine in Western Australia. The respondent, OM Holdings Limited (OMH), through a wholly owned subsidiary, operates the Bootu Creek Manganese mine in the Northern Territory. OMH is incorporated in Bermuda but has its head office in Singapore. Its shares are listed exclusively on the Australian Stock Exchange (ASX). It has a registered office in Perth and maintains a share registry in Perth. Cons Mins and OMH are competitors in the manganese mining industry. At a general meeting of members of OMH held in Singapore on 23 September 2008, nine resolutions were passed. Among the resolutions which were passed were resolutions which approved the issue of options to acquire shares in OMH to directors and executives of OMH. More specifically, there were resolutions passed which approved the grant of 20 million options to be issued free to Mr Peter Ivan Toth, one million options to be issued to Mr Wong Fong Fui, 12 million options to be issued to Mr Ong Beng Chong and four million options to be issued to Mr Low Ngee Tong. There was also a resolution passed to approve the issue of 10 million options to Mr Paul Vincent Thomas, the managing director of OMH's subsidiary, OM (Manganese) Limited. The applicant was at the date of the meeting, a shareholder and member of OMH. The applicant did not attend the general meeting of members in Singapore but appointed a proxy to vote against the resolutions. At the date of the meeting the applicant held, through nominee companies, 12,843,161 shares in OMH. After the meeting, the applicant continued to purchase shares in OMH through nominee companies, and at the date of the commencement of this proceeding, the applicant held 57,231,393 shares comprising approximately 11.78% of the issued shares in OMH. In January 2009, the applicant started to request documents relating to the proceedings at the general meeting on 23 September 2008 which approved the issue of the options to the directors and executives. The initial request was made by the applicant itself but subsequently solicitors for the applicant have also made requests. Some documents were provided in response to the requests but this did not satisfy the applicant. On 19 May 2009, the applicant filed this application for preliminary discovery under O 15A r 6 of the Federal Court Rules (the Rules). For the reasons which follow, this application is dismissed. The letter went on to state that Mr Toth's remuneration would include the issue of 10 million unlisted options, subject to shareholder approval. The letter also stated that Mr Ong Beng Chong, who was then a non-executive director of the company, had accepted the appointment to be the company's chief financial officer with effect from 1 August 2008. The letter went on to say that Mr Ong's remuneration would include the issue of six million unlisted options subject to shareholder approval. In an announcement to the ASX dated 5 June 2008, OMH announced the appointment of Mr Wong Fong Fui, who was the chairman and group chief executive officer of Boustead Singapore Limited, as an independent non-executive director of the company with immediate effect. The letter went on to state Mr Wong would be issued with one million unlisted options subject to shareholder approval. On 4 July 2008, OMH made an announcement to the ASX that its board of directors had approved, following a recommendation by the remuneration committee, the issue of four million options to Mr Low Ngee Tong subject to shareholder approval. The letter also referred to an intention to issue 10 million options to Mr Paul Thomas, the managing director of OM (Manganese) Limited. On 21 August 2008, the applicant commenced acquiring, through nominee companies, shares in OMH. As mentioned above, by the date of the meeting, the applicant had through nominee companies, acquired about 12.8 million shares in OMH. On 1 September 2008, OMH dispatched a notice of general meeting dated 27 August 2008 and the explanatory memorandum to members of OMH. The ASX had previously approved the notice of general meeting of OMH and the explanatory statement. The notice of general meeting gave notice of the intention to hold a general meeting of members on 23 September 2008 and referred to each of the resolutions seeking approval to issue the options to each of Mr Toth, Mr Wong, Mr Ong, Mr Low and Mr Thomas respectively. The notice of meeting also contained a prominent statement that OMH would disregard any votes cast by, or on behalf of, each of those persons, or by any associate of those persons. The explanatory statement also referred to the "relevant interests" held by each of Mr Toth, Mr Wong, Mr Ong and Mr Low and disclosed that Mr Ong held shares in OMH and that Mr Low held shares directly and indirectly in OMH and also held options to acquire shares in OMH. The statement also disclosed that Mr Low's spouse, Ms Heng Siow Kwee was a senior executive of one of OMH's subsidiaries, and that she held 42,132,130 ordinary shares indirectly, 500,000 ordinary shares directly and 500,000 unlisted options directly. The explanatory statement also stated that the purpose of issuing options to the persons named was to "provide them with an incentive to grow the company and enhance shareholder value". The meeting was held on 23 September 2008, in Singapore. No other apologies were noted. One of those persons was Ms Melissa Anne Stevens. An affidavit sworn by Ms Stevens was read in this proceeding. The minutes go on to record that each of the resolutions approving the grant of options to each of Mr Toth, Mr Wong, Mr Ong, Mr Low and Mr Thomas - being resolutions 4-8 - respectively, was carried "unanimously on a show of hands". After the meeting, the applicant continued to acquire more shares in OMH through nominee companies. On 27 November 2008, OMH by the issue of a disclosure of relevant interest request, learned for the first time that the applicant was the holder of 48,277,915 shares in OMH, which it had been accumulating over time through the use of nominee companies. After 27 November 2008, the applicant continued to acquire more shares in OMH, and as mentioned above, by the date of this application held more than 57.2 million shares in OMH. On 15 January 2009, a special general meeting of the members of OMH was held at which a resolution was proposed to amend the by-laws of OMH to include takeover protection provisions broadly based on those found in Ch 6 of the Corporations Act 2001 (Cth). I interpose to say that by reason of OMH being incorporated in Bermuda, it was common ground that Ch 6 of the Corporations Act did not apply to OMH at that time. The applicant was opposed to the resolution and actively campaigned to persuade members to vote against the amendment to the by-laws of OMH. However, the majority of members of OMH supported the resolution and the resolution was passed at the special general meeting held on 15 January 2009, by an overwhelming margin. By a letter dated 29 January 2009, the applicant made a request of OMH for the supply of the shareholder register used to determine the entitlement to vote at the 23 September 2008 general meeting, a record of the proxies received and a record of the shareholders present and voting. OMH responded by providing the applicant with a copy of the minutes of the general meeting and referring the applicant to the announcement as to the results of the meeting. The documents sought related to the following four broad categories: the issue of the options as incentives; the share and option holdings of Mr Low and his spouse, Ms Heng Siow Kwee; proceedings at the meeting on 23 September 2008; and correspondence between officers or employees of OMH relating to potential or completed corporate transactions (including the acquisition of shares in OMH between 21 August 2008 and 1 December 2008). The letter also advised that if the requested documents were not provided, the applicant anticipated applying for orders for preliminary discovery from OMH and/or its directors as potential parties to proceedings in the Federal Court of Australia. In response to that letter, OMH by a letter dated 23 March 2009, declined to provide the documents. However, it appears that discussions took place between the parties at around this time. On 15 May 2009, the board of directors of OMH advised the ASX that it would not support the applicant's nominee for an appointment as a director of OMH and had advised members to vote against that resolution. On 19 May 2009, the applicant filed this application for preliminary discovery from OMH. At the annual general meeting of members of OMH, held on 26 May 2009, the resolution that one of the applicant's nominees be appointed as a director of OMH was defeated by an overwhelming margin. Mr Kuzmenkov is resident in the United Kingdom, and is the director of a company which provides advice to the applicant. In his affidavit, Mr Kuzmenkov said that as a result of the resolutions being passed at the meeting, the options that were issued will on their exercise, significantly dilute the shareholding of the applicant. Mr Kuzmenkov said that on the exercise of the options the share capital of OMH would be increased to 520,097,150 shares and the applicant's proportionate shareholding would be reduced to approximately 10.9%. As previously mentioned, the evidence was that as at the date of Mr Kuzmenkov's affidavit, being 14 May 2009, the applicant's shareholding comprised approximately 11.78% of the issued shares in OMH. Mr Kuzmenkov then went on to depose that he considered that the applicant may have a cause of action against OMH in relation to the impugned issue of the options. Mr Kuzmenkov said that specifically he considered that there may be "associations between directors and/or shareholders which were not disclosed or not fully disclosed in the material provided to shareholders prior to the meeting". Mr Kuzmenkov also deposed that he considered that "one of the reasons for issuing options may have been to dilute the shareholding of non-related entities". Mr Kuzmenkov then set out the reasons for holding these views. First, said Mr Kuzmenkov, the number of options being issued was "very large, and four of eight of the incumbent directors of OMH were beneficiaries of the option issue, such that each of the beneficiaries had reason to support the issue of the options to each other". There was, said Mr Kuzmenkov, "no discussion of this in the explanatory statement". Secondly, Mr Kuzmenkov said that the explanatory statement showed that one of the directors, Mr Low and his wife had direct and indirect shareholdings and option holdings in OMH. Mr Kuzmenkov said that the explanatory statement was unclear as to the actual shareholding and option holding of Mr Low and his wife, "such that it was not possible to determine the level of association". Thirdly, it was said that the September 2008 meeting was convened and held after Cons Min and the applicant commenced acquiring shares in OMH. Fourthly, said Mr Kuzmenkov, from the publicly available information it was not possible to discern which shareholders voted for the resolutions, which abstained and which voted against the resolutions. Mr Kuzmenkov went onto to say that if there were undisclosed associations then OMH and its directors may have breached the ASX Listing Rules relating to the form and content of notices of meetings and disclosure of associations and disqualification of associates from voting which, in turn, may give rise to causes of action by the applicant, particularly under s 793C(2) or s 1324 of the Corporations Act . OMH relied upon two affidavits of Ms Julie Anne Wolseley, a director and company secretary of OMH. OMH also relied upon an affidavit of Ms Stevens to which I have already referred, and on an affidavit of Mr Jerome Patrick Allan. In her second affidavit, Ms Wolseley, who was not cross-examined, relevantly deposed that neither Ms Heng Siow Kwee personally, nor her sole controlled company, Dino Company Limited, voted on any of the resolutions 4-7 at the meeting. It was also said that Mr Ong did not vote on resolution 6, and that Mr Low did not personally, or on behalf of his sole controlled company, vote on resolution 7. The applicant, said counsel, was only contemplating a possible action in respect of a failure by OMH adequately to disclose the relevant associations affecting the directors who stood to benefit from the passing of the resolutions for the issue of the options. Accordingly, said counsel, the applicant now only sought preliminary discovery of documents described in subpara (b) and subpara (c) of its application (see [34] above). This was because there was reasonable cause to believe that OMH had failed to comply with the ASX Listing Rule 14.11 in relation to the impugned resolutions which were passed at the general meeting of members on 23 September 2008. It was contended that the ASX Listing Rule 14.11 required that the notice of the meeting contain a notice which stated that the company would disregard any votes cast in favour of the options resolutions by a person excluded from voting or by an "associate" of that person. Further, the Listing Rule also stated that the relevant interpretation of "associate" for the purposes of the Listing Rule is the interpretation in s 11 and ss 13 - 17 of the Corporations Act . Relevantly, s 15 of the Corporations Act provides that the reference to an "associate" includes a reference to a "person in concert with whom the primary person is acting, or proposes to act". The applicant contended that there may have been an agreement or understanding between each of the beneficiary directors and executives that each, as a shareholder, would vote in favour of each of the resolutions to approve the issue of the options to each of the other beneficiaries, provided that each of the other beneficiaries voted in favour of the resolution to approve the issue of the options to him. The existence of such an agreement or understanding would render each of the parties to that agreement or understanding an associate of the others. There was, said the applicant, no disclosure of any such association in the materials which were sent to the members of OMH prior to the general meeting. Further, the applicant said that there was reasonable cause to believe that in breach of the voting exclusion statement in the notice of general meeting, votes from persons who were associates, by reason of being party to the mutual voting pact postulated by the applicant, may have been counted in favour of each of the impugned resolutions. However, said the applicant, it did not have sufficient information to know whether this had occurred because it did not know who had voted in favour of each of the impugned resolutions. The minutes did not reveal which shareholders had voted in favour of each of the resolutions. The applicant contended that the minutes revealed that there were eight people listed as being present and only six of whom were shareholders. The applicant went on to contend that without further information the case was not clear and that the applicant could not make an informed decision as to whether to commence a proceeding for the relief which it was contemplating bringing against OMH. At the centre of the applicant's case is the contention that there may have been a mutual voting agreement or understanding between the directors and executives who were to benefit from the passing of the resolutions in the terms postulated by the applicant. In support of this contention, counsel for the applicant said that there was at least the prospect disclosed on the face of the notice of meeting that there was a "congruence of interest" between the relevant directors and executives in relation to the four resolutions. Further, there were a couple of very large shareholders who had an interest, one of whom is the spouse of the other. Counsel for the applicant also referred to the proxy forms which had been completed by Mr Ong and Mr Low and Mr Low's controlled company. The applicant pointed out that on his proxy form, Mr Ong directed his votes in favour of resolutions approving the issue of options to the other directors and executives but abstained in relation to the resolution for the issue of options to himself. The applicant said that the same pattern was apparent in the proxy forms completed by Mr Low on his behalf and on behalf of his controlled company. This was evidence, said the applicant, of the directors crossing their votes in favour of the resolution approving the issue to each other of the options. Counsel for the applicant also contended that there was an inadequate disclosure in the explanatory memorandum of the spousal relationship between Mr Low and his wife, Ms Heng Siow Kwee. The first question is that which arises under O 15A r 6(a) of the Rules, namely, whether there is reasonable cause to believe that the applicant may have a right to obtain relief from OMH. Further, the words "or may have" cannot be ignored. 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. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 ; BC200403021 at [13], [14], [17] and [73]. Of course, this is not to say that it is not necessary to examine the various elements of the potential cause of action that is sought to be relied upon to determine whether there is a reasonable cause to believe that each of the necessary elements exist (see Austrac Operations Pty Ltd v New South Wales [2003] ATPR 41-960 at [11]; Leighton Contractors Pty Ltd v Page Kirkland Management Pty Ltd [2006] FCA 288 at [5] ; Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216 ; (2007) 164 FCR 450 at [44] ). Nor can an application for preliminary discovery be sustained without evidence that must incline the mind towards the matter of fact in question (see Austrac [2003] ATPR 41-960 at [37]; John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 at [13]-[14], [17], [73]; Dartberg [2007] FCA 1216 ; 164 FCR 450 at [44] ). (Original emphasis. In my view, the case made by the applicant does not, on the evidence before the Court, rise above the level of speculation or conjecture. First, the existence of a mutual agreement or understanding between the four directors and executives who stood to benefit by the passing of the impugned resolutions, postulated by Mr Kuzmenkov in his affidavit (see [39] above), is inconsistent with, and undermined by the fact two of the four beneficiaries, mainly, Mr Toth and Mr Wong were at the relevant time, not shareholders of OMH. Those two persons, therefore, lacked capacity to vote at a general meeting and were, therefore, not in a position to confer the reciprocal benefit essential to the postulated pact, on the other beneficiary directors and executives. Secondly, the fact that the proxies lodged by Mr Ong and Mr Low showed that each voted for the resolutions approving the issue of the options to the other beneficiaries, does not, in my view, comprise evidence of the existence of the mutual voting agreement or understanding postulated by Mr Kuzmenkov. Such action on the part of Mr Ong and Mr Low is quite consistent with the exercise of an independent free choice by each of them. Without more, there is nothing in that conduct which gives rise to the tilting of the mind towards the existence of the voting pact postulated by Mr Kuzmenkov in his evidence. In my view, the evidence does not permit an inclination of the mind towards the existence of the mutual voting agreement or understanding which underpins the claim which the applicant alleges that it is contemplating bringing against OMH. Further, I reject the applicant's contention that there was an inadequate disclosure of the spousal relationship between Mr Low and his wife. The explanatory memorandum made it clear that Mr Low was Ms Heng Siow Kwee's spouse. The explanatory memorandum also made clear the extent of Ms Heng Siow Kwee's direct and indirect holdings in OMH. In any event, there is the unchallenged evidence of Ms Wolseley that Ms Heng Siow Kwee did not, either on her own behalf, or on behalf of her sole controlled company, vote in favour of resolutions 4-7. In addition, in light of the extent of the disclosure already made, the applicant has not identified the added benefit that getting access to the nominated OMH documents would bring to the making of its decision as to whether to commence a proceeding. It follows that I am not satisfied that the applicant has satisfied the requirement of O 15A r 6(a) of the Rules. On that basis, I dismiss the application. In any event, I would in the exercise of my discretion, not have granted the relief sought by the applicant. This is because, for the following reasons, I am not satisfied that the applicant did not commence this application for the ulterior purpose of putting pressure on OMH as part of a wider commercial stratagem. First, I am not satisfied that the applicant has identified with sufficient specificity the benefit it would obtain from any relief available to it in this Court founded on a breach of the ASX Listing Rules. During argument counsel for the applicant was nebulous as to the practical benefit to the applicant of obtaining a direction from the Court under s 793C(2) of the Corporations Act . Further, as counsel for the applicant correctly conceded, it is problematic as to whether any relief would be available under s 1324 of the Corporations Act in relation to the postulated breach of the ASX Listing Rules. The legislation provides for a method of enforcement of those rules; but breach of the listing rules is not to be equated with breach of a statute or acting in a contravention of a statute. Any such causes of action which might be available to it would presumably be those afforded by Bermudan law. However, there was no evidence of Bermudan law and no evidence identifying any claim founded on Bermudan law, which the applicant was contemplating bringing. Secondly, at the forefront of the applicant's application as filed, was a contention that the directors of OMH may have acted for an improper purpose in approving the issue of the impugned options to the directors and the executives. Mr Kuzmenkov deposed that the applicant was contemplating bringing a claim on the basis that one of the directors' purposes in approving the issue of the options to the recipients may have been to dilute the shareholding of the applicant in OMH. Evidence on the public record in the form of notifications to the ASX showed that the decision to issue the options was made in advance of the applicant commencing to acquire shares in any substantial numbers in OMH. Further, there was no challenge to the evidence of Ms Wolseley that OMH first learned of the applicant's interest in shares in OMH on 27 November 2008 --- some two months after the general meeting, and some six months after the initial ASX announcement in relation to the intention to issue options to Mr Toth and to Mr Ong. It is the case that counsel for the applicant did not press the "improper purpose" contention at the hearing. However, Mr Kuzmenkov's willingness to file an affidavit which deposed to evidence in support of this, correctly abandoned, contention, is probative on the question of the applicant's purpose in commencing this proceeding. The reason I have not made a positive finding that the applicant's application was brought to exert commercial pressure on OMH as part of a wider commercial stratagem, is that it would, in my view, be unfair to make such a finding in the absence of the cross-examination of Mr Kuzmenkov. The application is dismissed with costs. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | preliminary discovery o 15a r 6 of the federal court rules applicant contemplating commencing a proceeding founded on a possible breach of the australian stock exchange listing rules whether reasonable cause to believe that the applicant may have a right to obtain relief whether in the exercise of the court's discretion the application would be dismissed. practice and procedure |
In regards to the processing, handling and resulting conduct following short term loans that started from approximately $1.828 million and interest of approximately $114,000 with AUSEC Ltd in May 2007 and taken over by Oakland Investments Ltd in October 2007 that now claims guarantees from the applicant Concepcion Barnett for continually increasing charges over $5 million (August 2008) well beyond any practical means possible. The applicant hereby alleges that all respondents are in breach of sections 51AC and/or section 52 of Trade Practices Act 1974 . 2. Referral of respondent No' s 3. David Parkinson, 4. David Handley, 5. James Hickey and 6. Brook Monohan to Queensland Department of Public Prosecutions to examine evidence for charges of attempting to steal the "ADDITIONAL PROPERTIES". 3. Exemplary damages against respondent No' s 1. Matthew Royal, 2. Mark Wooley, 3. David Parkinson, 4. David Handley, 5. James Hickey and 6. Brook Monohan and 7. Oakland Investments Ltd in the proportions this court decides to the sum of $17,080,000 (Four times the value of the properties as per the precedent set with attempts to steal money by avoiding tax as charged by the tax department). 4. Order that Oakland Investments Ltd forfeit all loan money lent to Tim Hancox Property Development Pty Ltd. 5. Order that the respondents pay the applicant respective sums decided appropriate by this court for oppressive conduct against the applicant. Temporary order that Oakland Investments Ltd must cease all contact with tenants, cease from collecting any rents, refund any rents collected to date and that Oakland Investments cease all activity to sell any "ADDITIONAL PROPERTIES" until this case has been heard in full. 2. Order that Oakland Investments Ltd release the 2nd mortgage and caveat on the property situated at 25 Donaldson Rd, Plainlands (Lot 47 RP 841870, Parish of Laidley) to allow the contract of sale to proceed in order to satisfy all outstanding arrears, maintain serviceability of first mortgage payments by Concepcion Barnett to mainstream banks on the "ADDITIONAL PROPERTIES". 3 In the statement of claim, also filed 29 September 2008, the applicant claims, inter alia , unconscionable, misleading and deceptive conduct by all respondents contrary to s 51AC and s 52 Trade Practices Act 1974 (Cth) ("the Act "). 4 This matter came on for directions for the first time this morning. At the hearing the applicant was not legally represented, however she was accompanied by her son and Mr Howard. Mr Howard sought leave to appear as the applicant's interpreter on the basis that, although the applicant could speak some English, English was her third language, and she was out of her depth linguistically and culturally in the context of the Court hearing. For the purposes of the directions hearing I granted leave to Mr Howard to act as the applicant's interpreter. 5 The respondents were represented this morning by numerous Counsel. Paragraphs 2 and 10 of the statement of claim be struck out. 2. Reference to the second respondent at paragraph 3 of the application filed on 29 September 2008 be struck out. 3. The claim as against the second respondent be dismissed and the second respondent's name be removed as a party to this action. 4. The applicant pay the second respondent's costs of and incidental to the application. 7 After hearing submissions of the parties I temporarily adjourned the hearing to give consideration to issues raised by the parties. Paragraph 2 and all references to Mark Woolley in paragraph 10 of the statement of claim be struck out. 2. The reference to the second respondent at paragraph 3 of the application filed on 29 September 2008 be struck out. 3. The claim against the second respondent be dismissed and the second respondent's name be removed as a party to this action. Mr Cooke on behalf of the second respondent said that, notwithstanding para 4 of its notice of motion, no order as to costs was sought by the second respondent. Accordingly I make no order as to costs. • Second, it is outside the jurisdiction of this Court to refer matters to the Queensland Director of Public Prosecutions as sought by the applicant. • Third, issues relating to potential criminal liability for theft (as raised by the applicant) are within State law and outside the jurisdiction of this Court. • Fourth, claims concerning oppressive conduct --- a concept relevant under the Corporations Act 2001 (Cth) --- are not competent with respect to the individual respondents by reference to the Act . 11 Claims against individuals for breach of s 52 and s 51AC of the Act are only competent to the extent that there is an allegation that they have, for example, aided, abetted, counselled or procured, or were directly or indirectly knowingly concerned in, or party to, the alleged conduct engaged in by the corporation within the meaning of s 75B of the Act . There is no claim by the applicant to this effect. 13 I do not consider that the pleadings in their current form against the first, third, fourth, fifth and sixth respondents are capable of amendment so as to warrant an order that the applicant have leave to amend. I consider that the application and the statement of claim so far as the applicant seeks relief against the first, third, fourth, fifth and sixth respondents, should also be struck out. At the moment however I note that it is not supported by sworn evidence. More importantly for the purposes of today's hearing and the oral application by the seventh respondent that the claims against it be struck out, it is clear that the claim goes beyond a freezing order in that it seeks refund of rents collected to date. • In relation to the second claim for interlocutory relief that the seventh respondent release a mortgage and a caveat on a property, this claim is not in the nature of interlocutory relief in my view as it raises issues of substance which can only be dealt with in a final hearing. I also note that no sworn evidence has been filed by the applicant in support of this claim. 15 In relation to the claims of the applicant for interlocutory and final relief against the seventh respondent, the applicant currently faces significant difficulties because of the manner in which her case is pleaded. The function of pleadings is to state with sufficient clarity the case that must be met. I consider that, in order for this matter to progress, both the application and the statement of claim require significant amendment. Although a plaintiff is often granted leave to re-plead if a statement of claim is struck out, there are some cases where the plaintiff so misconceives the cause of action that the action ought to be brought to an end. 17 In this case I am not satisfied that the application and the statement of claim disclose no reasonable cause of action or that the applicant so misconceives the cause of action that the action should be brought to an end at this stage. At present, however, the case the seventh respondent faces is not pleaded with sufficient clarity for the seventh respondent to meet it. In Court this morning the applicant indicated that she is currently seeking legal advice and would require at least two and a half weeks to do so. The application and the statement of claim so far as the applicant seeks relief against the first, third, fourth, fifth and sixth respondents, should be struck out. 2. The applicant be given leave to file and serve an amended application and an amended statement of claim by 4.00 pm on 29 October 2008, in default of which the application so far as the seventh respondent is concerned stands dismissed. 19 Counsel for the third, fourth, fifth, sixth and seventh respondents submitted that their clients did not seek any orders as to costs. No such submission was made by the first respondent. In relation to the first respondent I order that costs be reserved. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | first directions hearing concerning claims for interlocutory and final relief under trade practices act 1974 (cth) oral applications and notice of motion by respondents to dismiss proceedings whether substantive claims competent whether substantive claims disclose reasonable cause of action practice and procedure |
1A. 2. Further and alternatively to paragraph 1A, that the Applicant's proceeding against the Seventh Respondent be dismissed. 3. That the affidavit of Lynne Maree Rogers filed herein on 14 June 2007 be taken off the file. 4. That the affidavit of Gregory Eric Rogers filed herein on 14 June 2007 be taken off the file. 5. That the Applicant pay the Respondents' costs of and incidental to the proceedings to be taxed and paid forthwith. 3 I note that the respondents were represented by Mr Handran of Counsel. The applicant was self-represented. 1. An order that any loan agreements, mortgages and deeds of settlement are void. 2. An order for the return of interest paid, return of costs incurred as a result of any or all agreements between the parties. 7. An order for costs in the proceeding. Any other orders that the court deems fit. 7 The application filed in QUD525/2005, upon which judgment was given by Spender J in Rogers v Asset Loan Co Pty Ltd [2007] FCA 1371 , is annexed to the affidavit of Mr Sean Whittle sworn 19 June 2006 and filed 20 June 2006 in these proceedings. The application in that matter stated that it was a "Claim for Relief under the Trade Practices Act ". An order for costs in the proceeding. An order that the respondents not seek to claim, take possession of a house at 2 Crown Street, Final Head under further order of the court. 2. Any other orders that the court deems fit. Second, in relation to para 5 under the heading "Details of Claim" and para 1 in the "Claim for Interlocutory Relief", the applicant does not have an existing counterclaim or set off upon which to set aside the bankruptcy notice and as such this claim should be dismissed. (2) The Court may receive evidence on the hearing of an application for an order under subrule (1). ...it surely must be in the jurisdiction of the Court of Justice to prevent the defeated litigant raising the very same question which the Court has decided in a separate action. (4) This section does not limit any powers that the Court has apart from this section. The nature of the provision and its overlap with O 20 r 2 Federal Court Rules have been considered in a number of cases in this Court, including the recent decision of Lindgren J in White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511. • Section 31A(2) is comparable to O 20 r 2 in that they are both concerned with dismissals of proceedings (at [50]). • The only difference that suggests itself between the concept of no reasonable cause of action being disclosed (O 20 r 2(1)(a)) and no reasonable prospect of successfully prosecuting a proceeding (s 31A(2)) is that the latter makes plain that there may be taken into account the unavailability of evidence necessary to bring success at trial, whereas it is arguable that the former does not permit the unavailability of such evidence to be taken into account (at [51]). • It appears that the legislature's intention in enacting s 31A was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129-130 (at [54]). (To that extent the test in s 31A appears less stringent than that in O 20 r 2: Spender J in Rogers v Asset Loan Co Pty Ltd (2007) FCA 1371 at [55] ). • The "no reasonable prospects of success" formula of s 31A reflects the approach adopted in r 24.2 of the United Kingdom's Civil Procedure Rules (at [53]). In the United Kingdom it has been held in the context of that equivalent rule that the expressions "no real prospect of succeeding" and "no real prospect of successfully defending" require attention to be given to real, as opposed to "fanciful" or "merely arguable" prospects (at [59]). • The same test has been adopted in r 292(2) and r 293(2) of Queensland's Uniform Civil Procedure Rules 1999 (at [53]). The Queensland Court of Appeal has similarly held that the "no reasonable prospects of success" test requires the court to determine whether there are "real" as opposed to "fanciful" prospects of success: Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 235 (at [59]). 15 I respectfully adopt this articulation of principles of Lindgren J. This suggests immediately a possible abuse of process by the applicant in these proceedings. First, the substantive application in QUD525/2005 purported to be a claim for relief under the Trade Practices Act 1974 (Cth) while the proceedings before me purport to be brought under the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act"). 2. Second, whereas in the substantive application before me the applicant seeks as relief an order to set aside a bankruptcy notice filed by the second respondent on the grounds of a set off or counterclaim, and by way of interlocutory relief an order extending time to comply with that bankruptcy notice, no such relief was sought in the substantive application in QUD525/2005. The applicant has further submitted that the matters are different because they are brought under different statutory schemes and that since QUD525/2005 was commenced "new breaches" had occurred (TS p 20, ll 43-44). 18 The application before me asserts that it is brought pursuant to ss 12DA and 12DJ ASIC Act . There is no reference to any particular sections of the Trade Practices Act in the application file in QUD525/2005 however, the comparable sections in the Trade Practices Act are s 52 and s 60 respectively. 19 Sections 12DA and 12DJ ASIC Act are found in Pt 2 Div 2 Subdiv D which is entitled "Consumer Protection". Sections 52 and 60 Trade Practices Act are found in Pt V Div 1 which is entitled "Unfair Practices". For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence. (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1). (2) Strict liability applies to paragraph (1)(b). 26 It is also clear that the provisions of the ASIC Act under consideration in this case replicate the equivalent provisions of the Trade Practices Act : Financial Sector Reform (Consequential Amendments) Bill 1998 (Cth) Explanatory Memorandum, paras 4.33-4.39, Miller R, Annotated Trade Practices Act (28th ed, Thomson, 2007) at 516. 27 I am not persuaded that, by substituting the consumer protection provisions of the ASIC Act for the equivalent provisions of the Trade Practices Act in her claim, the applicant's case in paras 1-4 and 6-7 under "Details of Claim" and paras 2-3 under "Claim for Interlocutory Relief" is any different from the case which was before Spender J. Indeed, these pleadings are otherwise identical to those before Spender J, and no relevance has been ascribed either in the pleadings before me or by the applicant at the hearing to the conduct of the respondents so far as it relates specifically to financial services (to which the ASIC Act applies), as distinct from other goods or services (to which the Trade Practices Act applies). The applicant relies on the same facts, matters and circumstances in the application before me as she did in QUD525/2005 before Spender J. The applicant is attempting to re-litigate issues already decided by Spender J. In this respect the application is an abuse of process and should be dismissed pursuant to O 20 r 2 Federal Court Rules . 28 In any event, having regard to the decision of Spender J in Rogers v Asset Loan Co Pty Ltd [2007] FCA 1371 , it is clear that the applicant would be no more successful on the material before me in claiming relief under the ASIC Act than she was before his Honour in claiming relief under the Trade Practices Act . In light of the principles articulated by Lindgren J in White Industries [2007] FCA 511 , it is plain that the claim has no reasonable prospects of success in terms of s 31A Federal Court Act. Bankruptcy Issue: Is there a valid counterclaim or set off? 30 Although not specifically pleaded, I understand that the existence of such alleged set off or counterclaim relates to whether the applicant has committed an act of bankruptcy within the meaning of s 40(1)(g) Bankruptcy Act 1966 (Cth). In Re A Debtor [1958] 1 Ch 81 Roxburgh J said: 'But not every demand will suffice. A demand made in bad faith would not be good enough. The debtor must satisfy the Court that he has a genuine demand... But in my opinion a demand must be more than bona fide: the Court must be satisfied that it has a reasonable probability of success' (at 99). Perhaps the standard may be expressed by saying that the debtor must show that he has a prima facie case, even if then and there he does not adduce the admissible evidence which would make out a prima facie case before a court trying the issues that are involved in his counter-claim, set-off or cross demand. "I am the applicant in this file. On 25 May 2007 a process server called at my home where he was intercepted at the front gate by Greg Rogers. The process server allegedly said, "This is for Lynne Rogers. " He then dropped a Bankruptcy Notice dated 19 April 2007 on the ground and left. 3. The Bankruptcy Notice seeks $10,421.09 being costs claimed by the respondents as a result of Supreme Court of New South Wales litigation. 4. The litigation was initiated by me to stop the Seventh Respondent acting for the Second Respondent, from enforcing fraudulently obtained orders from the Supreme Court giving it possession of my then home. 5. It was not possible to raise issues relating to a set off or counter claim as it was not a final hearing but an interocutory ( sic ) hearing where I was not present. There was no opportunity to raise ASIC Act breaches before the Supreme Court of New South Wales. The litigation was initiated solely to stop the Seventh Respondent Whittle and the issuer of the Bankruptcy Notice, Asset Loan Co from using the Sheriff to enforce an order that to their knowledge was fraudulently obtained. Ultimately, His Honour Justice Spender issued orders stopping the respondents from taking possession in file QUD 525 2005 when I applied for orders under the Trade Practices Act . This new application seeks orders under the provisions of the ASIC Act as the respondents all acted in relation to the supply or possible supply of financial services. 6. I have filed an Application in the Federal Court of Australia seeking orders including damages for economic loss and mental damage as a result of the conduct of the seven defendants including the company that issued the Bankruptcy Notice, Asset Loan Co A.C.N. 101 054 997 and its lawyer Sean Whittle who issued the Bankrupcy ( sic ) Notice. 7. My set off or counter claim seeks damages that will be far greater than the amount of the Bankruptcy Notice. 8. I seek orders from the Federal Court to extend the time to comply with the Bankruptcy Notice and to set it aside altogether. 34 Mr Handran submitted further that the facts, matters and circumstances which the applicant relies on in support of the counterclaim or set off, are the same facts, matters and circumstances which were before Spender J in Rogers v Asset Loan Co Pty Ltd [2007] FCA 1371 and which have been dismissed by his Honour. Mr Handran submits that this is also evident from the supporting affidavit filed by the applicant in support of both her application in this case and that in QUD525/2005. 35 It is useful to compare this affidavit of the applicant, with an affidavit sworn by her on 30 November 2005 and filed in QUD525/2005. it is clear that the facts, matters and circumstances upon which the applicant is relying in the substantive proceedings before me to have the relevant bankruptcy notice set aside - and which relate to a set off or counterclaim for damages for financial loss and psychological or mental damage caused by conduct of the respondents - are exactly the same facts, matters and circumstances which were before Spender J in Rogers v Asset Loan Co Pty Ltd [2007] FCA 1371. I note that Spender J dismissed the claim of the applicant for damages for economic loss and mental damage as a result of the conduct of the respondents. It is inappropriate to allow the application before me to continue, on the basis that there is a set off or counterclaim for damages for financial loss and psychological or mental damage as a result of the conduct of the respondents, which identical claim has already been dismissed. In this respect, I accept the submission of the respondents that there is, in fact, no setoff or counterclaim as envisaged by ss 40(1)(g) and 41 (7) Bankruptcy Act 1966 (Cth) and the High Court in Ebert 104 CLR at 350. 37 In light of this, there is also no substantiated ground upon which to grant the applicant the interlocutory relief she seeks in para 1 under the heading "Claim for Interlocutory Relief". Order 14 r 8 Federal Court Rules provides that the Court may order that an affidavit be removed from a Court file where the affidavit contains scandalous or oppressive matter. 39 Mr Handran for the respondents submitted that these affidavits of the applicant and Mr Rogers contain matters which are the subject of injunctions in the Supreme Court of Queensland in favour of the seventh respondent, Mr Whittle (who is also the solicitor for the first to sixth respondents) and that accordingly the affidavits should be taken off the Court file. 40 In my view these affidavits of the applicant and Mr Rogers contain material that is scandalous and oppressive. I also note the orders made by de Jersey CJ annexed to the affidavit of Mr Whittle filed 20 June 2007. Accordingly, the appropriate order is that both affidavits be removed from the Court file. The application filed 14 June 2007 be dismissed. 2. The affidavit of Lynne Maree Rogers filed herein on 14 June 2007 be taken off the file. 3. The affidavit of Gregory Eric Rogers filed herein on 14 June 2007 be taken off the file. 4. The applicant pays the respondents' costs of and incidental to the proceedings to be taxed, if not otherwise agreed. | application for summary dismissal o 20 r 2 federal court rules whether abuse of process whether an attempt to re-litigate matters already determined by the court whether facts, matters and circumstances pleaded in respect of a claim under the australian securities and investments commission act 2001 (cth) (asic act) consumer protection provisions identical to facts, matters and circumstances pleaded in respect of an earlier claim under the trade practices act 1974 (cth) unfair practices provisions whether, in the circumstances, any material differences between the legislation pursuant to which the proceedings are commenced whether, in any event, "no reasonable prospects of success" s 31a federal court of australia act 1975 (cth) alleged counterclaim or set off for damages for financial loss and psychological or mental damage whether counterclaim or set off actually exists whether counterclaim or set off relies on facts, matters and circumstances previously before the court and previously dismissed practice and procedure bankruptcy |
Barrett now wishes to make an election between damages and an account of profits. For that purpose, consequent on earlier orders I have made, Mr David Taylor, a director of Carlisle, has sworn an affidavit which exhibits as confidential exhibit "DJT-2" a report which includes estimates of sums received and receivable, costs, overheads and profits attributable to the 65 "Provence" houses found to have infringed Barrett's copyright. 2 Carlisle does not object to making the confidential report available to Barrett's solicitors and counsel, and to Mr Darren Goodwin, who is the Chief Financial Officer of Barrett, upon appropriate confidentiality undertakings being given. 3 The contentious issue is whether the confidential report should also be made available to Mr Anthony Roberts. Mr Roberts is the Chief Executive Officer of Barrett. He and his family are the controlling shareholders of the company. He says that he is unable to properly discuss the claimed expenditure figures with Mr Goodwin if the latter cannot disclose to him any of the contents of the confidential exhibit. Mr Roberts is the person who will make the final decision on behalf of Barrett as to the election. 4 This sort of question has arisen before, and in particular is the subject of a decision of the Court of Appeal of Victoria, Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34. The decision of the court was given by Hayne JA. His Honour pointed out at 38 that when the question of disclosure of confidential information to a trade rival arises, it must be remembered that confidential information once received cannot be forgotten, and may be used in a way in which the party disclosing the information never becomes aware. 5 I think that is an important consideration in the present case. I am satisfied that the information in question is genuinely confidential. The evidence in the substantive hearing disclosed there is very close competition in the project homes market. Knowledge to a competitor of costings and margins would be very valuable for the purpose of setting prices. 6 I do not think Barrett are seriously disadvantaged for the purpose of making its election because, as already mentioned, their Chief Financial Officer will have access to the report. If they wish, they could also retain some independent expert with knowledge of this particular industry. 7 I note in particular that Mr Roberts is a person who is involved in the day-to-day operations of the business, and so the more likely to be in a position to take advantage of the information. This is not necessarily a case of any dishonest or improper use of information. As is stressed in Mobil Oil , once information is disclosed it becomes part of the person's stock of knowledge and it is unrealistic to expect that knowledge to be ignored. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | disclosure of confidential information to trade rival practice and procedure |
I have set out some of the factual background in the judgment I delivered on 22 June 2006: Pan Australia Shipping Pty Ltd v The Ship 'Comandate' [2006] FCA 881. I will not repeat that background here. 2 On the day after I granted an injunction restraining Comandate Marine from applying to the English Courts for an order restraining Pan from bringing claims under the Trade Practices Act 1974 (Cth), Comandate Marine commenced new proceedings in rem in this Court and arrested the Boomerang I , a vessel which Pan had chartered. Later, on Pan's application, the Court set aside the arrest. 3 In the meantime Comandate Marine applied for a stay of these proceedings and for an order that Pan arbitrate the issues in the arbitration which has begun in London. However, while the terms of that contract are not in doubt, the manner of its formation is relevant for the purposes of determining whether there is an agreement in writing within the meaning s 7 of the International Arbitration Act 1974 (Cth). 10 The contract was negotiated between Mr Ivan Colaco of Trans World Chartering Pty Limited who was based in Queensland, acting on behalf of Pan, with his counterpart, Mr Dimitris Athanassiou, who was the Managing Director of Prime Maritime Inc, a Greek brokerage firm. Mr Athanassiou was based in Greece. He took instructions from Capt John Piperakis of Alon Maritime Pty Limited, the owner's manager of the vessel, Comandate . 11 It was common ground that it is an accepted practice within the ship broking industry for brokers to communicate mostly by telex or email messages, and even where there are voice communications, it is usual to confirm those by a telex or an email. Mr Colaco was present in Australia between 7 and 21 April 2006. The evidence discloses that the negotiations between Mr Athanassiou and Mr Colaco commenced on 7 April 2006. 12 On 8 April 2006 Mr Athanassiou sent Mr Colaco a pro forma charter that had been used by Comandate Marine and another charterer in respect of the vessel, the Asiatic . That contained a clause, which is central to this matter, cl 45(b). Throughout the negotiations the terms of cl 45(b) did not change. The parties adopted a convention of sending telexes and also emails in exactly the same form, as confirmation. The parties are agreed that for the purposes of determining these proceedings an email may be treated as if it were a telex and that both forms of communication amount to a letter or telegram within the meaning of Article II r 2 of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ('the New York Convention') which is in schedule 1 of the International Arbitration Act 1974 (Cth). 14 On 19 April 2006 Prime sent to Pan care of Mr Colaco a telex and email stating that the owners were glad to confirm their agreement to the charterer's alterations as provided in the message which was set out thereunder. Kindly advise urgently within today the Bank's full style ... so that our Bankers can contact them tomorrow. The Comandate was delivered to and accepted by Pan on 21 April 2006 at Singapore. 17 Mr Athanassiou said that it was an accepted practice in the ship building industry that responsibility for the preparation of the written charter party rests with the charterer's broker but that on this occasion cl 8 of the recap provided that Prime would be responsible for the preparation of the written charter. He said that the preparation of the written charter party invariably occurred after the vessel had been delivered to charters. Mr O'Neill wrote again on 11 June requiring Ms Wilmshurst to take Pan's instructions on putting up security of USD 4 million and threatened that unless he received confirmation that a first class bank guarantee would be provided for that amount, Comandate Marine would be taking immediate steps to obtain this security 'by other means. You will know the options open to us as well as we do'. Ms Wilmshurst responded saying that the owner's claim for security appeared to be strategic and intended as a threat and indicated that she assumed Comandate Marine might apply for a maritime attachment order. Mr O'Neill responded that a claim would be substantiated shortly and indicated that Pan was being given sufficient time to provide security. Mr O'Neill persisted in making demands and threats that whatever steps were necessary would be taken if security were not provided. 19 At the time of appointing Comandate Marine's arbitrator in the arbitration it commenced in London on 14 June 2006, Mr O'Neill wrote to Ms Wilmshurst seeking confirmation that Pan would provide security 'failing which our clients will take immediate steps to secure their claim in full'. On 16 June 2006 Comandate Marine obtained the maritime attachment orders in New York. Subsequently, on 5 July 2006, Pan appointed an arbitrator. [Comandate Marine's] claim is for damages for a breach of a time charter entered into between [Comandate Marine] and [Pan] on or about 19 April 2006 in respect of the ship 'Comandate'. The affidavit in support of the application for the arrest warrant was sworn by the solicitor for Comandate Marine, Mr Wilson. He swore that Comadate Marine's claim concerned breaches by Pan of a charter party with it in relation to the vessel Comandate 'including but not limited to the failure by Pan to obtain valid crew visas, wrongful termination of a charter party and failure to pay other expenses'. He said that Comandate Marine had earlier in June 2006 commenced arbitration proceedings against Pan in London in accordance with the charter party. He also disclosed that on 16 June 2006, Comandate Marine had moved the United States District Court for the Southern District of New York for Part B attachment of property of Pan and had obtained from that Court an order for issuance of process of marine attachment. Mr Wilson noted that Comandate Marine had sought security from Pan in respect of its claim which had not been provided and the claim had not been satisfied. Heydon J, in the High Court of Australia, refused Comandate Marine's application for a stay of the Full Court's orders setting aside the writ in rem and refused to order a rearrest of the vessel Boomerang I , but granted expedition of the application for special leave to appeal which Comandate Marine had filed. On 28 June 2006 Mr Wilson swore an affidavit in support of the motion for rearrest in the High Court saying that by way of its in rem proceedings, Comandate Marine had sought security in respect of its claims pursuant to, inter alia, s 19 of the Admiralty Act 1988 (Cth) by arresting a sister ship or surrogate ship of the Comandate in respect of which '... Pan is the person who would be liable on [Comandate Marine's] claims in a proceeding commenced as an action in personam'. The validity of those reasons may in due course have to be established by witnesses including those officers of the Authority who inspected the Comandate or made decisions. I merely recite some of the reasons given by the Authority in documents so as to illustrate issues which will be raised for any hearing. (Of course, in what follows, I am not making any finding as to whether what the Authority said was well founded. ) The first detention in Sydney finished on 10 May 2006 and occurred because a number of defects were identified by the Authority. The tank air pipes were not in satisfactory condition. There were problems with the ceiling plates and screws had been corroded, emergency preparedness had not been properly addressed, fire dampers were unable to be closed, the fire line was leaking in a number of places. The Authority required temporary repairs to the air pipes to be made as per condition of class and the conditions of the flag state were required to be met. 24 The second detention was at Fremantle and finished on 9 June 2006. The Authority reported that there had been a crack in the port ship's hull steel plating, the CO2 piping in the cargo hulls was wasted away in several areas with no CO2 protection afforded to cargo holds. The Master was said to have failed to report the hull damage to the relevant authorities and the procedures for maintenance and inspection of the ship were not functional as was evidenced by numerous hardware deficiencies. There was also reported to be a problem with the watertightness of certain doors and the ability to secure the cargo hold access hatch in a watertight manner. Temporary repairs were carried out under the supervision of the class society and permanent repairs were required to be carried out at the next port, Singapore, as per the condition of release. 25 An email from Melbourne General Stevedoring asserted that while the vessel was in Melbourne, the cranes of the vessel were causing problems during stevedoring operations and all the crane cabins were in 'terrible condition'. They were said to be too rusty and that the crane chairs were in poor condition and visibility was limited due to age and lack of maintenance and scratching of windscreens. The ladders leading to the crane's cabins were said to be covered in oil and extremely slippery. 26 When the vessel was in Perth on 25 May 2006 the Department of Immigration noted that the crew were not carrying properly endorsed visa documents for foreign crews working in Australia and the Master's passport apparently had expired. 27 It is plain that there is a lively dispute between the parties as to who was responsible for the crews' immigration status and requirements, each side blaming the other for the deficiencies. There is a subsidiary issue of waiver by Comandate Marine of its right to insist on the arbitration. (2) Is there an agreement in writing for the purposes of Article II r 2 of the New York Convention? (3) Does the arbitration clause give the arbitrators power to determine Pan's claims under the Trade Practices Act 1974 (Cth) should the proceedings in this Court brought by Pan be stayed and, if so, what conditions should apply? (4) Should the anti-anti-suit injunction which I granted be continued and, if so, on what terms? After that it also pursued that claim. However, in its writ in rem against the Boomerang I , Comandate Marine sought no relief either in respect of its claim for security for the purposes of the arbitration or for a stay under the International Arbitration Act 1974 (Cth). Rather, it only sought damages for breach of the charter party and sought no relief at all in respect of the arbitration. 30 When Pan appeared unconditionally as defendant in those proceedings on 24 June, it submitted to the jurisdiction of the Court and waived any irregularity. As Gibbs J noted in Caltex Oil (Australia) Pty Limited v The Dredge 'Willemstad' [1976] HCA 65 ; (1976) 136 CLR 529 at 539, only a defendant can enter an appearance. He said that in an action in rem, the persons who may become defendants, if they choose to appear, are the owners and others interested in the ship, including charterers (see too: Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 at 908B-909A, 909F-910F per Lord Steyn with whom Lords Browne-Wilkinson, Hoffmann, Cooke of Thorndon and Hope of Craighead agreed and s 31 of the Admiralty Act 1988 (Cth)). 31 The effect of Comandate Marine commencing the Boomerang 1 proceedings in rem was to put before the Court all elements of the justiciable controversy between the parties to, initially, the in rem proceedings, and, later, the in personam proceedings. Once Pan had appeared, the single controversy between it and Comandate Marine could be litigated in those proceedings, or indeed, in both proceedings as Gummow and Hayne JJ made clear in Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511 at 585 [140] (see too at 586 [142], 587-588 [147]). There is but a single matter if different claims arise out of "common transactions and facts" or "a common substratum of facts" ( Philip Morris [1981] HCA 7 ; (1981) 148 CLR 457 at 512, per Mason J), notwithstanding that the facts upon which the claims depend "do not wholly coincide" ( Fencott [1983] HCA 12 ; (1983) 152 CLR 570 at 607, per Mason J, Murphy, Brennan and Deane JJ) . That submission to jurisdiction extends to a cross claim founded on or arising directly out of the same subject matter, even if it may result in a judgment against the plaintiff on the cross claim, where that ought be tried to do justice between the parties ( Marlborough Harbour Board v Charter Travel Co Ltd (1989) 18 NSWLR 223 at 232B-233A per Hope JA, Clarke and Meagher JJA agreeing applying National Commercial Bank v Wimbourne (1979) 11 NSWLR 156 at 174E-G per Holland J; see too Wool International v Sedgwick Ltd (No 4) (unreported FCA 1172 October 1997 per Beaumont J at 10-11)). 33 It is clear that when the matter came before the Full Court on 27 June 2006, Pan was the defendant to Comandate Marine's proceedings. The only claims in Comandate Marine's proceedings at that time were those in the writ it had issued and pursuant to which the Boomerang I had been arrested. 34 The question arises as to whether by seeking the particular relief which it did and pursuing the arrest of the Boomerang I for the purposes of the claim for that relief made in the writ, Comandate Marine made an election not to arbitrate at London the dispute it had brought to this Court. 35 The consequences of an election may well be serious to the party electing, and in particular, election involves the abandoning of a right that is available: Immer (No 145) Pty Limited v Uniting Church in Australia Property Trust (NSW) [1993] HCA 27 ; (1993) 182 CLR 26 at 39 per Deane, Toohey, Gaudron and McHugh JJ. Their Honours held that a party can be only held to have elected if it had so communicated its election to the other party in clear and unequivocal terms. An election arises when a party is confronted with and makes a choice between the exercise of alternative and inconsistent rights. The party is not obliged to elect at once, but when it takes a step which is consistent only with one of those rights the law attributes to it an election to abandon the other right (182 CLR at pp 38-39). It is necessary, however, for the party alleged to have elected, to have been aware at least of the facts giving rise to the two courses of action (182 CLR at 40). Abandonment can be more readily inferred in certain circumstances than others (182 CLR at 42). It is an effect which the law annexes to conduct which would be justifiable only if an election had been made one way or the other. It relied on what Austin J had said in ACD Tridon v Tridon Australia [2002] NSWSC 896 at [58] , [68]-[69]. He held that mere delay in invoking a reference to arbitration by a party to an arbitration agreement, who had been sued by the other party in curial proceedings, was not an election or waiver: see too Australian Granites Ltd v Eisenwerk Hensel Bayreuth Dipl-ing Burkhardt GmbH [2001] 1 Qd R 461 at 469 [25]. But that is quite distinct from the position, here, where the party asserting the binding obligation to arbitrate later initiated the Boomerang I 's arrest without, at that time, seeking or foreshadowing a claim for curial assistance in those proceedings in enforcing the arbitration agreement. 38 Ordinarily, an arbitration agreement will give rise to the Court holding the parties to an exclusive procedure to be followed by both parties for the resolution of any dispute to which the agreement applies: PMT Partners Pty Ltd (In liq) v Australian National Parks and Wildlife Service [1995] HCA 36 ; (1995) 184 CLR 301 at 312-313 per Brennan CJ, Gaudron and McHugh JJ. There is no reason why the parties cannot agree afterwards to use litigation, rather than follow the arbitration agreement in which case the agreement, becomes 'inoperative' within the meaning of s 7(5) of the International Arbitration Act 1974 (Cth) : Australian Granites Ltd v Eisenwerk Hensel Bayreuth Depl.-ing Burkhardt GmbH [2001] 1 Qd R 461 at 466-467 [15]-[16] per Pincus JA with whom Thomas JA and Shepherdson J agreed; Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133 at [12] - [13] per Chernov JA with whom Ashley JA and Bongiorno AJA agreed. 39 Comandate Marine also relied on what Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ said concerning 'waiver' in Berowra Holdings Pty Ltd v Gordon [2006] HCA 32 of [38]-[39]. However, once it is appreciated that the court has jurisdiction and that its procedural rules have been engaged, concepts such as "waiver" (and acquiescence and estoppel) are confusing and imprecise. This was pointed out by Dawson J in Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 at 456) and Lord Browne-Wilkinson in Roebuck v Mungovin ([1994] 2 AC 224 at 235-236. See also Giumelli v Giumelli [1999] HCA 10 ; (1999) 196 CLR 101 at 122 [38] ). The conduct of pending proceedings by a party is relevant upon an application by that party for the exercise in its favour of a power of the court. The outcome of such an application depends not upon the exercise of the right of a litigant or upon its denial, but upon the exercise of a discretionary power given to the court. The decision of the court often will depend upon many different factors (see Ketteman v Hansel Properties [1987] AC 189 at 220 per Lord Griffiths). An outcome favourable to one party cannot be described adequately in terms of the waiver of the legal, equitable or statutory rights of the unsuccessful party. As the words emphasised show, the issue there was as to the legal consequence of conduct of a party in proceedings which were already pending, as distinct from the consequences which might result the conduct of from a person who exercises a choice by commencing curial proceedings. 41 'Waiver' is commonly a term used to describe 'election': Khoury v Government Insurance Office (NSW) [1984] HCA 55 ; (1984) 165 CLR 622 at 633 per Mason, Brennan, Deane and Dawson JJ, but, as their Honours say 'election' or 'waiver' in the sense of a choice between inconsistent rights is different to the concept of estoppel. 'An election, unlike estoppel is concerned with what a party does and not what he causes the other party to do' (165 CLR 622 at 633). No prejudice need be shown by the party seeking to hold the other to an election. 42 Comanate Marine argues that by bringing its in rem proceedings it invoked the Admiralty jurisdiction of the Court, including all its powers under s 29 of the Admiralty Act 1988 (Cth). It says that the arrest of the Boomerang I has been set aside, and so no question now arises about an order under s 29 in the proceedings which it commenced. But it says that had the vessel remained under arrest, the court could have granted a stay and made orders for security under s 29. 43 There can be no doubt that Comandate Marine knew of the provisions of cl 45(b) requiring all disputes arising out of the contract to be arbitrated at the time of the issue of its writ in rem. By seeking only the relief which it did in the writ in rem, Comandate Marine communicated, unequivocally, in my opinion, a choice that it was litigating in this Court an action for damages for breach of the charter party. Of course, the Court could give relief in that action. No relief was sought in aid of the arbitration. ' That is a position which he is not entitled to take up. If, knowing of the breach , he does distrain, or does receive the rent, then by law he waives the breach, and nothing which he can say by way of protest against the law will avail him anything. 45 Comandate Marine's answer to this was to say that the presence of s 29 in the Admiralty Act 1988 (Cth) forms part of the jurisdiction of the Court which it had invoked by commencing its writ in rem. That is so. However, at that time it did not seek relief under s 29 and, quite contrary to its contractual promise that it would arbitrate all disputes arising under the charter party in London, it sought relief from this Court by way of the award of damages. 46 Comandate Marine relied upon two authorities, one English and one in this Court in support of its position. In The ' Jalamatsya' [1987] 2 Lloyd's Rep 164, Sheen J held that a party to arbitration proceedings which had already been commenced could apply to the Court for the arrest of a vessel in order to obtain security for the arbitration. His Lordship noted that s 26 of the Civil Jurisdiction and Judgments Act 1982 (UK), which is in relevantly similar terms to s 29 of the Admiralty Act 1988 (Cth) for present purposes, envisaged just such a course. He relied on obiter dicta by Robert Goff LJ, giving the judgment of himself, Waller and Slade LJJ in The ' Andria' now renamed ' Vasso' [1984] QB 477; [1984] 1 Lloyd's Rep 235 to that effect. In my judgment s 26 applies whether or not an arbitration has already been commenced. It follows that if an arbitration has been commenced, and if the claimants in the arbitration have not obtained security for any possible award, then they can quite properly issue a writ in rem if they know that a ship belonging to the respondents in the arbitration is coming within the jurisdiction, and they may arrest that ship in order to obtain security. Significantly, his Lordship said that the claim endorsed on the writ in that case was a claim which was within the Admiralty jurisdiction of the High Court of Justice in England which could be invoked by serving a writ in rem upon the ship and accordingly it could be arrested. Regrettably, the report is silent as to what the claim was or whether it sought security for the arbitration. 48 In Allonah Pty Limited v The Ship 'Amanda N' (1989) 21 FCR 60, Sheppard J followed Sheen J's decision. In that case, similarly, a consent arbitration was proceeding at the time the vessel was arrested. Again, there is no indication in the report of the claims made in the writ in consequence of which the vessel was arrested. However, his Honour set out what Sheen J had said and concluded that the same approach should be adopted in the construction of s 29 of the Admiralty Act 1988 (Cth) (21 FCR at 64). Significantly, his Lordship recited that the proceedings in rem sought security for the plaintiff's counterclaim in the arbitration proceedings (see [1993] QB at 678G-H and see also the recital of facts at 675C-D). 50 What s 29 is referring to is the question whether the dispute should be determined by arbitration in the sense that that is the appropriate method whereby the dispute between the parties is to be resolved. There is an issue about that in this case. That is simply because the purpose of the exercise of the jurisdiction is to provide security in respect of the action in rem, and not to provide security in some other proceedings, for example, arbitration proceedings. The time may well come when the law on this point may be changed: see s 26 of the Civil Jurisdiction and Judgments Act 1982, which has however not be brought into force. But that is not yet the law. It follows that, if a plaintiff invokes the jurisdiction of the Court to obtain the arrest of a ship as security for an award in arbitration proceedings, the Court should not issue a warrant of arrest. They rejected the contention that if the purpose of a plaintiff in seeking the arrest of a ship in an action in rem was simply to obtain security for an award in arbitration proceedings, the court had no jurisdiction ([1984] QB at 488E-G). Rather they held that in such a case, before s 26 came into force, the plaintiff's conduct was an abuse of process ([1984] QB at 490E-G), but said, obiter dicta , that once s 26 came into force it would be a permissible course. They also cited ([1984] QB at 490B) Brandon J's decision in The 'Cap Bon' [1967] 1 Lloyd's Rep 543 (see at 548) as authority for the proposition that a party who actively pursued proceedings in respect of the same claim both in the Court and in arbitration, could be required by the Court, in the exercise of its inherent power, to elect in which forum it would pursue its claim because the Court proceedings could be regarded as vexatious or an abuse of process. Brandon J observed that the plaintiff had a right to do either ([1967] 1 Lloyd's Rep at 548: see too: The 'Tuyuti' [1984] QB 838 at 850 where Robert Goff LJ referred to this approach as a principle of law). Neither the Lords Justices, nor Brandon J, considered the question of whether the party by so acting may have elected between or waived its right to pursue one rather than the other course. 52 Here, the Court had jurisdiction to grant Comandate Marine all the relief it sought in the writ in rem when it issued the warrant of arrest. 53 Pan argues that a general maritime claim for security for the arbitration proceedings pursuant to s 29 could have been available to Comandate Marine under s 4(3)(f) of the Admiralty Act 1988 (Cth) as a claim arising out of the charter party. By s 4(3)(u) , a claim for the enforcement of or arising out of an arbital award made in respect of a claim within s 4(3)(f) is also a general maritime claim. 54 As Sheen J and Sheppard J reasoned, the enactment of s 29 of the Admiralty Act 1988 (Cth) and its analogue permit the arrest of a vessel so that security will be available to satisfy any award made in an arbitration proceeding which the parties to the writ, when the defendant appears, are contractually bound to submit to arbitration or have already begun to arbitrate. But such an arrest, in my opinion can only be justified if the relief sought from the Court is not inconsistent with the obligation to arbitrate. Comandate Marine submitted that its dominant, but not sole, purpose in bringing the proceedings in rem was to seek security for the arbitration. It said that if the Court did not stay the proceedings or refer them to arbitration, the proceedings would continue. Thus, the Court could grant the actual and only relief sought in the writ, namely the arrest which was made and damages, interest and costs. 55 It would not be inconsistent for a party to an arbitration agreement seeking to enforce its rights in an arbitration to commence in rem proceedings in which it claimed relief under s 29 of the Admiralty Act 1988 (Cth) so as to have security available to satisfy any arbitral award. And, as Allsop J has remarked, it is important to recognize that impediments should not be placed in the path of the free use of the in rem procedure under the Admiralty Act 1988 (Cth): Tisand v The 'Cape Moreton' [2004] FCA 1191 ; (2004) 141 FCR 29 at 38 [44] . 56 In the present case, where the arbitration has commenced and Comandate Marine wishes to enforce the obligations of the parties to arbitrate, it could have commenced in rem proceedings seeking an order under s 29 that they be stayed or dismissed on the ground that Pan was bound to arbitrate in London after Pan provided security. Comandate Marine invoked the jurisdiction of the Court to hear and determine a case for damages for breach of the charter party by seeking in its writ in rem only the arrest and damages and made no claim for security or to enforce the obligation to arbitrate. Indeed, Comandate Marine submitted that while its dominant purpose in commencing its proceedings in rem was to obtain security for the arbitration, it also intended to pursue the relief it claimed in that writ of stay of Pan's proceedings were refused. That submission sought to keep all Comandate Marine's options open without prejudice. 57 Comandate Marine also pointed to Art 9 of the UNCITRAL Model Law on International Commercial Arbitration which by force of s 16(1) and the International Arbitration Act 1974 (Cth) has the force of law in Australia. The Model Law is set out in Sch 2 of that Act. And, Art 8(1) of the Model Law, relevantly requires a court in which an action is brought in a matter which is the subject of an arbitration agreement to refer the parties to arbitration, if a party so requests no later than when submitting its first statement on the substance of the dispute. 59 Russell on Arbitration (22 nd ed) at 610 [A5-018] refers to Art 8(1) having the same effect as English law; i.e. the party seeking to enforce the arbitration agreement must apply to the court without delay for a stay of the proceedings (op cit at 296 [7-005]). The position is similar under s 53(2) of the Commercial Arbitration Act 1984 (NSW) which applies here by force of s 79 of the Judiciary Act 1903 (Cth). 60 Comandate Marine did not apply to have its proceedings referred to arbitration when they were before this Court or the High Court. I am of opinion that Comandate Marine's conduct in bringing its proceedings in rem was incompatible with the arbitration agreement, and that Art 8(1) and Art 9 of the Model Law do not avail it. 61 Comandate Marine is in a similar position to that of the landlord in the example given by Parker J in Matthews v Smallwood [1910] 1 Ch at 786-787. By pleading the writ in the way which it did, Comandate Marine exercised a right of action given by the Admiralty Act 1988 (Cth) to litigate the breach of the charter party as a general maritime claim under s 4(3)(f) of the Admiralty Act 1988 (Cth) in this Court. I am of opinion that in choosing to claim only that relief when it invoked the jurisdiction of the Court, Comandate Marine could not do that without prejudice to any right it might otherwise have had to seek security for the arbitration under s 29 at a later stage. It made no such claim in the writ and it procured the arrest of the vessel for the purposes of the particular relief which it claimed in the writ. The way in which Comandate Marine framed its claim in the writ nailed its colours to the mast as much as the warrant for arrest later was nailed (notionally or actually) to the mast of the Boomerang I . Having invoked the jurisdiction of the Court to procure the arrest of the vessel in order to pursue the only claims it pleaded, it is not open to Comandate Marine now to say that it did so without prejudice to any right later to apply for security under s 29 of the Admiralty Act 1988 (Cth). 62 In its report: Civil Admiralty Jurisdiction (Report No 33, 1986) Law Reform Commission (Australia), the Commission recommended the introduction of what has become s 29 so as to enable the Admiralty jurisdiction to be used to obtain and retain security even though the merits of the dispute are to be determined elsewhere, if the subject matter of the dispute lies within Admiralty jurisdiction. The Commission noted that such a solution would do most to ensure that the award of the tribunal that decides upon the merits is satisfied, and hence that a just result would be obtained. It noted that the law had a strong interest in compliance with arbitral awards duly made, and in achieving co-operation between courts and arbitrators to this end. However, the Commission desired, in the solution it proposed, that the Court should retain a discretion to stay or to exercise jurisdiction to decide the merits (ALRC 33 [189]). That discretion was to arise in the Court being able to take into account all relevant circumstances although the Commission noted that, as at 1986, English and South African courts required the plaintiff to demonstrate why the assistance of a court was required in retaining security, although there were shades of difference between the readiness of the respective jurisdictions to assist in respect of claims otherwise unconnected with the forum: The Tuyuti [1984] QB 838 at 851; Katagum Wholesale Commodities v The MV Paz 1984 (3) SAf LR 261 at 268, 270 (Natal Provincial Division of the Supreme Court of South Africa). 63 Neither party argued that the analysis of the present question should be approached on the basis that there had been a contract of abandonment such as in Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854 at 915-916. There, Lord Diplock considered that abandonment of a contract, which was still executory, involved the formation of a contract of abandonment in which each party promised to release the other from performance of all further obligations, including the obligation to pay damages for past breaches, arising under the executory, and now abandoned, contract. Lord Brandon of Oakbrook, who gave the leading speech (see [1983] 1 AC 900C per Lord Diplock) said that the question of whether a contract has been abandoned or not is one of fact ([1983] 1 AC at 913F). (1968), vol 1, p 577, para 1231, and cases there cited. Where A seeks to prove that he and B have abandoned a contract in this way, there are two ways in which A can put his case. The first way is by showing that the conduct of each party, as evinced to the other party and acted on by him, leads necessarily to the inference of an implied agreement between them to abandon the contract. The second method is by showing that the conduct of B, as evinced towards A, has been such as to lead A reasonably to believe that B has abandoned the contract, even though it has not in fact been B's intention to do so, and that A has significantly altered his position in reliance on that belief. The first method involves actual abandonment by both A and B. The second method involves the creation by B of a situation in which he is estopped from asserting, as against A, that he, B, has not abandoned the contract : Pearl Mill Co v Ivy Tannery Co Ltd [1919] 1 KB 78. 65 In international trade and commerce, it is critical that the courts respect and enforce arbitration agreements where they exist in accordance with, in particular, the New York Convention and legislation designed to give effect to it such as the International Arbitration Act 1974 (Cth). This is because in international trade and commerce, the parties generally will not wish to be subject to serendipity of where a ship may be arrested, an action begun or damage occur to determine a forum of any litigation between them or the substantive law to be applied to their dispute. The parties will be conscious that an accident or fortuity may occur at any point in a voyage or flight and very different legal results may flow depending on which law and which forum determine their dispute. It is for this reason that arbitration clauses such as cl 45(b) invoking arbitration in London under English law have been a popular recourse for parties in international trade for over a century. Nowadays other centres of commercial arbitration, including Australia, are recognized as providing sound and fair fora and laws for the resolution of disputes in international trade or commerce. 66 However, the Court should be astute to uphold and enforce agreements such as those in cl 45(b) rather than to display a form of judicial prejudice or xenophobia against the parties' chosen method or place of dispute resolution. Refusal to enforce agreements to arbitrate in international transactions is capable of undermining the reasonable but significant expectations of the international commercial community and the confidence which it and, indeed, local business people place in the readiness of courts to hold people to their bargains: see e.g. : Vimar Seguros y Reaseguros SA v M/V Sky Reefer 515 US 528 at 538 (1995); Mitsubishi Motors Corp v Soler Chrysler-Plymouth Inc 473 US 614, 638 (1985); Scherk v Alberto-Culver Co 417 US 506, 516 (1974); Tanning Research Laboratories Inc v O'Brien [1990] HCA 8 ; (1990) 169 CLR 332 at 343 per Brennan and Dawson JJ, 354 per Toohey J agreeing (cf: Nanisivik Mines Ltd v F.C.R.S. Shipping Ltd (1994) 113 DLR (4 th ) 536 at 541-542 (Federal Court of Appeal). 67 But, just as parties may choose to invoke arbitration as the method by which their disputes will be resolved by use of an arbitration agreement such as in cl 45(b), so they may also choose to give up their rights to use that method or they may so conduct themselves that the choice will be attributed to them by the doctrine of election. 68 When Comandate Marine chose to begin its in rem proceedings in the form which it utilized, it brought about the consequence that it was taken to have elected not to pursue its arbitration proceedings. It may have chosen another method to seek security by framing the relief it sought in its writ in a different way, but it did not do so. The English authorities on which Comandate Marine relied, and to which Sheppard J referred, did not consider the question of whether the party seeking security had made an election. For that reason I think those authorities are distinguishable. 69 Because Comandate Marine elected to litigate the dispute and Pan has too, the arbitration agreement in cl 45(b) has been, in substance, abandoned or for the purposes of s 7(5) of the International Arbitration Act 1974 (Cth) rendered inoperative or incapable of being performed. 71 Pan says that where the contract was formed, as it argues the charter party was in this case, either by acts or conduct, Art II r 2 is not satisfied. Pan says that each of the provision of the bank guarantee or the delivery of the vessel was an act or amounted to conduct which brought the contract into existence. In support of the argument it relies on decision of the Supreme Court of Italy in Robobar Limited v Finncold SaS (1995) Year Book Comm. Arb'n XX 739 at 740. The Court held that where a purchase confirmation had been sent by the party seeking to rely on the arbitration clause to which the other party had not responded, there was no doubt that none of the formalities in Art II in the New York Convention had been met because the clause was only contained in the confirmation to which the other party had not agreed by letter or telegram. 72 Pan also relied on a decision of the Court of Appeal of the Federal Republic of Germany in a case between a Dutch seller and a German buyer ((1997) Year Book Comm. Arb'n Vol II, 237 at 238). The Court of Appeal held that a declaration in writing of both sides to the contract was required. A one sided confirmation did not suffice and the lack of declaration in writing by the other party could not be cured by that party's appearance in the arbitration. 73 In this matter, however, the critical telex of 20 April 2006 commenced by being in form a confirmation, but ended with a request being made to both parties to confirm that the above recap was in line with the negotiations agreed so far. 74 The next relevant correspondence was the telex later that day noting that the bank guarantee had been received and indicating when delivery would occur. I think this does fall within the positions contemplated by the Supreme Court of Italy and the German Court of Appeal, as being ones in which the contract was not formed or contained in an exchange of letters or telegrams. They said that '... there had to be a record to evidence the agreement of the parties to resolve the dispute by arbitral process', in concluding that facsimile transmissions were sufficient to be or form part of an 'agreement in writing'. 77 In A.J. van den Berg's The New York Arbitration Convention of 1958 (1981) at 196-198, 206, 277 the learned author notes that Art II r 2 excludes oral or tacit acceptance and concluded (at 197, 227) that, as at 1981 there had been only one '... exception to the unanimous judicial affirmation that tacit acceptance does not comply with Art II r 2', that being a decision of the Court of First Instance of Rotterdam. The learned author said that this decision was not in conformity with either the text of Art II r 2 or the intent of its drafters, and noted that the decision had been rightly criticised. Significantly, he referred to the history of Art II r 2 which confirmed that the drafters of the New York Convention wished to exclude from its scope oral or tacit acceptance of a written proposal to arbitrate. 78 In his article 'Is the need for writing as expressed in the New York Convention and the Model Law out of step with commercial practice ? ' (1996) International Arbitration vol 12, no 1, p 27 at 32 Neil Kaplan QC affirmed Prof van den Berg's interpretation. ' (UN DOC E/CONF. Earlier, as Kaplan J, he had held in the High Court of Hong Kong in H Smal Limited v Goldroyce Garment Limited [1994] 2 HKC 526 (HCMP000 908/1994) that there was no basis for arguing that an arbitration agreement could be established by a course of dealing or the conduct of the parties under Art VII of the Model Law (see Schedule 2 to the International Arbitration Act 1974 (Cth)). Kaplan J said that he had looked at the UNCITRAL reports in relation to Art VII and was quite satisfied that it could not be complied with unless there was a record in which the defendant, in writing, assented to the agreement to arbitrate (see at [12]). 80 It has been recognized that a national courts, in the interest of uniformity, should construe rules formulated by an international convention, especially rules formulated for the purpose of governing international transactions such as the hire of vessels or the carriage of goods, in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English or domestic law, or by English or domestic legal precedent, but on broad principles of general acceptation: Shipping Corporation of India Ltd v Gamlen Chemical Co Australasia Pty Ltd [1980] HCA 51 ; (1980) 147 CLR 142 at 159 per Mason and Wilson JJ adopting Lord Wilberforce's speech in James Buchanan & Co Ltd v Babco Forwarding and Shipping (UK) Ltd [1978] AC 141 at 152 and see too: Vimar Seguros y Reaseguros SA v M/V Sky Reefer 515 US 528 at 537 (1995) per Kennedy J (Renquist CJ, Scalia, Souter, Thomas and Ginsberg JJ agreeing). And, I am conscious that in s 3(1) of the International Arbitration Act 1974 (Cth) the definition of 'arbitration agreement' is that it is an agreement of the kind referred to in Art II r 2. 82 As a matter of construction under Australian law, I would have no hesitation in concluding that the definition was inclusive one. However, I think that the drafting of the definition in Art II r 2 invokes a concept of certainty that the arbitration clause or arbitration agreement is itself signed or contained in an exchange of letters or telegrams. The pre-contractual exchanges of telexes and emails cannot themselves convert into separate or free-standing agreements in the present case unless and until the vessel was actually agreed to be fixed. It was only upon the agreement to fix the vessel that it could be said to be under charter. And as Capt Piperakis said, he had imposed an absolute condition that a bank guarantee be provided. The owners were not prepared to deliver the vessel, on the evidence before me, unless and until the bank guarantee had been received and it was at that point that they agreed that they were contractually bound. That agreement, which thus brought cl 45(b) into existence as an agreement to arbitrate, was manifested by Comandate Marine's conduct either in accepting the bank guarantee or later delivering the vessel. 83 At common law a recap telex can be found to contain a charter party, including an arbitration clause which is incorporated by reference to an earlier telex or other communication, even though both parties have not executed it: The Epsilon Rosa [2003] 2 Lloyd's Rep 509 at 514 [21] per Tuckey LJ (May and Brooke LJJ agreeing). But as Tuckey LJ pointed out ([2003] 2 Lloyd's Rep at 515 [29]) one cannot generalize in these cases. 84 The act of acceptance, which formed the contract, was the provision of the bank guarantee. And, it is common ground that a formal charter party incorporating all of the agreed terms was to be prepared later by Prime on behalf of Comandate Marine. Both parties were under a duty to co-operate to bring about the final form of their agreement in writing ( Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Limited [1979] HCA 51 ; (1979) 144 CLR 596 at 607 per Mason J applying Butt v M'Donald (1896) 7 QLJ 68 at 70-71 per Griffith CJ). 85 No doubt cl 45(b) was part of the agreement between Pan and Comandate Marine. But that does not, of itself, comply with Art II r 2. Rather, the critical part of the conduct by which the contract was formed was the provision by a third party of the bank guarantee which brought the contract into existence. So, the contract (being or including the arbitration agreement) was not made by being signed by the parties or contained in an exchange of telexes or emails. The contract included the conduct of the provision of the bank guarantee which fell outside the scope of Art II r 2. And, because there is no evidence of any further written communication relied on as amounting to a document capable of being part of an exchange of 'letters or telegrams' including telexes or emails, then this series of communications does not satisfy the requirements of Art II r 2. 86 A contract can be made by conduct evidencing a manifestation of assent to an offer: Empirnall Holdings Pty Limited v Machon Paull Partners Pty Limited (1988) 14 NSWLR 523 at 534-535 per McHugh JA (Samuels JA agreeing at 531). Accordingly, I am of opinion that the telex from Prime to Mr Colaco headed 'FINAL RECAP' was an offer by Comandate Marine to charter the vessel on the terms there set out and incorporated by reference which was capable of acceptance only by the provision of the bank guarantee. 87 For the reasons I have given, based on the fairly settled interpretation of Art II r 2 that tacit acceptance is insufficient, on the evidence I find that at the present time there is no 'agreement in writing' for the purposes of Art II r 2 of the New York Convention. The Commercial Arbitration Act 1984 (NSW) provides that an arbitration agreement '... means an agreement in writing to refer present or future disputes to arbitration' (see s 4(1)). By s 53(1) the Court may stay the proceedings if it is satisfied that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the agreement and that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the arbitration. 89 Having regard to the fact that Comandate Marine commenced its proceedings in rem, as I have found, without seeking to enforce any claim to arbitrate in those proceedings, I am of opinion that the evidence establishes that Comandate Marine was not then ready and willing to do all things necessary for the proper conduct of the arbitration. However, its application for stay is made in Pan's proceedings. At the time when Pan's proceedings were commenced, Comandate Marine was pursuing the arbitration proceedings and still seeks to do so now. I do not think that makes the commencement of the proceedings in rem irrelevant. By s 53(2) , the leave of the Court is required in the proceedings which have been commenced where the applicant for stay has delivered pleadings or taken any other steps in the proceedings other than the entry of an appearance. Although Comandate Marine's proceedings in rem were in separate proceedings, they form, as I have held, part of the same 'matter' for the purposes of ss 75 and 76 of the Constitution , and I am not minded to exercise any discretion in favour of Comandate Marine having regard to its conduct in taking the in rem proceedings in the circumstances which I have found. It was not put that the claims were an abuse of the process of the Court. Rather, it was put in oral argument that there had been a misuse of s 12 of the Admiralty Act 1988 (Cth) because the very complaints the subject of the claims under the Trade Practices Act 1974 (Cth) were, in essence, the same as the breaches of contract relied on by Pan. Comandate Marine, in written submissions asserted that the Trade Practices Act 1974 (Cth) claims had been made for the improper purpose of fabricating jurisdiction. I do not think this argument has any substance. 91 Part V of the Trade Practices Act 1974 (Cth), in which s 52 is found, sets out a statutory norm of conduct to which corporations must conform in trade or commerce. The task of the Court is to apply such norms where they arise in litigation even where the outcome is not materially different to applying the common law of negligence as in Travel Compensation Fund v Tambree [2005] HCA 69 ; (2005) 80 ALJR 183 at 191 [29] per Gleeson CJ or of passing off as in Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12 ; (2000) 202 CLR 45 at 83 [97] . If, as I consider, the section provides the public with wider protection from deception than the common law, it does not follow that there is a conflict between the section and the common law. The statute provides an additional remedy . The Parliament of the Commonwealth has enacted the Trade Practices Act 1974 (Cth) under the trade and commerce power in s 51(i) of the Constitution . There is nothing in the evidence to suggest that Pan has not properly and regularly invoked the Court's jurisdiction. Pan's pleading raises an issue of substance as to whether or not Comandate Marine engaged in misleading or deceptive conduct. I am satisfied that this is truly part of the one controversy which the Court has been asked to quell (cf: D'Orta Ekenaike v Victorian Legal Aid [2005] HCA 12 ; (2005) 79 ALJR 755 at 761 [32] ). 93 The only arguable limitation in the Admiralty Act 1988 (Cth) which might be seen as restricting the jurisdiction or powers any court invested with jurisdiction under that Act is to be found in s 13. But, on examination, s 13 does not affect the jurisdiction which a court, including this Court, has from sources other than the Admiralty Act 1988 (Cth) itself. Rather, s 13 provides that the Act does not confer on or invest jurisdiction on or in a court in a matter which is not of a kind mentioned in ss 76(ii) or (iii) of the Constitution . 94 In ascertaining the scope of jurisdiction which the Federal Court may exercise, s 13 thus provides some guidance. It contemplates that matters of a kind mentioned in ss 76(ii) and (iii) of the Constitution can be within the jurisdiction of the Court. Section 76(iii) ('of Admiralty and maritime jurisdiction') is a clear source of power to enact the Admiralty Act 1988 (Cth) itself and define maritime claims as well as associated matters of Admiralty and marine jurisdiction in ss 4 and 12 . And s 76(ii) provides that the judicial power of the Commonwealth is invoked in any matter 'arising under any laws made by the Parliament'. The purpose of s 13 is to limit, in the construction of the Act, the conferral of jurisdiction by the Act to matters within the power of the Parliament and the judicial power of the Commonwealth. It is not to limit the other powers of a court on or in which the Act confers or invests jurisdiction. 95 Clearly enough, s 86 of the Trade Practices Act 1974 (Cth) is a law made by the Parliament which confers jurisdiction on this Court independently of the jurisdiction conferred on it by the Admiralty Act 1988 (Cth). 96 It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words: Owners of "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 54 ; (1994) 181 CLR 404 at 421; see too Mansfield v Director of Public Prosecutions for Western Australia [2006] HCA 38 at [7] - [10] per Gleeson CJ, Gummow, Kirby, Hayne and Crennan JJ. Once the jurisdiction of this Court has been invoked, the Court should exercise it ( Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511 at 588 [149] ), even if it be to protect itself and its processes against their abuse: cf: Batistatos v Roads and Traffic Authority [2006] HCA 27 [3]-[15] per Gleeson CJ, Gummow, Hayne and Crennan JJ: see too: Elbe Shipping SA v The Ship 'Global Peace' [2006] FCA 954 at [138] per Allsop J, see too at [62]-[76]. 97 Comandate Marine also argued that a limitation was imposed on courts exercising jurisdiction conferred by the Admiralty Act 1988 (Cth) by s 31. But s 31(1) provides that the liability on a judgment of a relevant person (defined by s 3(1) as a person who would be liable were the proceedings in personam brought against that person) who has entered an appearance in a proceeding on a maritime claim commenced as an action in rem against a ship or property is not limited to the value of the ship or other property. The section confirms the amplitude of the jurisdiction rather than restricts it. 98 Next, Comandate Marine argued that a relevant person who appears in proceedings commenced by a writ in rem cannot be sued in proceedings in personam in this Court in respect of matters outside the relief claimed in the writ in rem on a cause of action other than a maritime claim within the meaning of s 4 of the Admiralty Act 1988 (Cth) or on associated matters of admiralty and marine jurisdiction within the meaning of s 12 of that Act. Here, part of the 'matter', within the meaning of ss 76(ii) and (iii) of the Constitution , is the controversy between the parties under the Trade Practices Act 1974 (Cth) which Pan has pleaded. The judicial power of the Commonwealth is exercised in resolving such 'matters'. Here, the controversy involves claims under two Acts of the Parliament each of which specifically and independently, one of the other, confers jurisdiction on this Court. Accordingly, I am of opinion that this Court does have jurisdiction to hear and determine such an in personam proceeding as this. That is not to say, however, that the ship or property the subject of the writ in rem will be available, necessarily, to answer any judgment for any in personam claim against a relevant person, such as one under the Trade Practices Act 1974 (Cth), which is neither a maritime claim or an associated matter within the meaning of ss 4 or 12 . 99 I am of opinion that the Admiralty Act 1988 (Cth) cannot be construed as in any way limiting the jurisdiction of this Court to hear and determine any matter within its jurisdiction. Rather, appositely to the present proceedings, there may be a question at the trial as to the availability of the bank guarantee which Comandate Marine provided as security in lieu of the ship Comandate to satisfy a claim made by Pan which is not within ss 4 or 12 of the Act. Pan's claim in personam for relief under the Trade Practices Act 1974 (Cth) is not invalid and its proceedings in personam are not invalidated by that claim: s 51 of the Federal Court of Australia Act 1976 (Cth). The Court, at the final hearing, can address any injustice which might arise if Comandate Marine wishes then to agitate such matters, including whether the security provided should be available to satisfy any claim under the Trade Practices Act 1974 (Cth). 100 The Trade Practices Act 1974 (Cth) provides Pan with remedies different to any remedy that could be awarded in pursuance of its contract claims. Indeed, one of the remedies it seeks is the avoidance of the contract, not pursuant to contractual principles, but by force of an order under s 87 of the Act: Murphy v Overton Investments Pty Limited [2004] HCA 3 ; (2004) 216 CLR 388 at 409 [52] . 101 And, the High Court has emphasized that the remedies under the Trade Practices Act 1974 (Cth) are designed to give effect, in cases of contravention of s 52 , to the prescribed standards of conduct which are embodied in that section where activities occur in trade or commerce: Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at 83 [97] ; Travel Compensation Fund v Tambree [2005] HCA 69 ; (2005) 80 ALJR 183. International trade including the entry into charter parties for vessels, is quintessentially within the trade and commerce clause of the Constitution (s 51(i)). And, par 15 of the amended statement of claim pleads specifically that the relevant conduct occurred in Australia because the communications and representations were received by Mr Colaco in Australia (see Voth v Manildra Flour Mills Pty Limited [1990] HCA 55 ; (1990) 171 CLR 538 at 568 per Mason CJ, Deane, Dawson and Gaudron JJ; Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 547A-548D per Beaumont, Drummond and Sundberg JJ). 102 Next, Comandate Marine argued that I should not follow the decision of the Full Court in The 'Kiukiang Career' ( Hi-Fert Pty Limited v Kiukiang Maritime Carriers Inc (No 5) (1998) 90 FCR 1). In that case the relevant clause provided that 'any dispute arising from this charter' would be settled in a London arbitration. Obviously, it is important to recognize that in every contract the proper construction of that contract depends upon the words which the parties used having regard to contractual matrix within which the contract was entered or made. Emmett J who delivered the leading judgment (with whom Branson J expressly agreed) considered a number of authorities including some which dealt with the words used in this arbitration clause (cl 45(b)): viz: 'arising out of'. 103 Emmett J said that a claim arising out of a contravention of the Trade Practices Act 1974 (Cth) during the performance of an agreement could be a claim arising out of the agreement (90 FCR at 21G). But, he made the critical distinction that where there was a dispute in respect of conduct which was antecedent to the contract such a dispute could not be said to arise from the contract in question (90 FCR at 22A-B) and he observed that it did not arise out of the charter party (90 FCR at 22B-C). In Francis Travel Marketing Pty Limited v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 Gleeson CJ (Meagher and Sheller JJA agreeing) held that conduct claimed to be in breach of s 52 of the Trade Practices Act 1974 (Cth) which occurred wholly during the currency of an agreement arose out of the agreement, notwithstanding that statutory remedies were invoked, so that the whole matter was capable of settlement under the arbitration clause. 104 Where it is claimed that a misrepresentation induced entry into an agreement, the fact that during the performance of an agreement it emerges that the pre-contractual conduct was misleading or deceptive or otherwise in contravention of s 52 of the Trade Practices Act 1974 (Cth) does not bring a statutory claim within the expression 'arising out of this contract'. 105 Gleeson CJ had distinguished the reasoning of Beaumont J in Allergan Pharmaceuticals Inc v Bausch & Lomb Inc (1985) 7 ATPR SS40 -636 on the basis that in that case the agreement to the parties was merely part of the background to the alleged contraventions of the Act and therefore the dispute did not arise out of the agreement. In the case before the Court of Appeal of New South Wales, the alleged contravention of the Act arose out of a representation that occurred during the currency of the agreement, as did the subsequent conduct relied on to establish the contravention (39 NSWLR at 166F-G). As Brennan and Dawson JJ noted in Tanning Research Laboratories Inc v O'Brien [1990] HCA 8 ; (1990) 169 CLR 332 at 344 (with whom Toohey J agreed at p 354) in respect of an arbitration clause that related to disputes 'arising out of' or relating to the agreement or the breach thereof (169 CLR at 337) '... the matter to be referred to arbitration cannot extend to issues which could not arise in proceedings between [the parties] or which are unrelated to the contract containing the arbitration clause: Allergan Pharmaceuticals Inc v Bausch & Lomb Inc (1985) 7 ATPR SS40-636 at 47,173'. 106 In Union of India v EB Abby's Rederi AS ('The Evje') [1975] AC 797 Lord Morris of Borth-y-Gest, reasoned that a dispute was one 'arising out of' a charter party where the charter party contained a clause providing that general average was to be payable according to the York/Antwerp Rules 1950 and to be settled in London. He said that a disputed claim for general average contribution which might involve disputes concerning matters and questions referred to in that clause would essentially and clearly arise out of the charter party because the claim related to events during its operation ([1975] AC 807H-808B, 808G, Lord Reid at 804E, and Lord Simon of Glaisdale agreed at 816C). Lord Salmon reasoned to similar effect ([1975] AC at 816F-8). 107 In Ethiopian Oil Seed & Pulses Export Corporation v Rio del Mar Foods Inc [1990] 1 Lloyd's Rep 86 at 97, Hirst J took the view that the words 'arising out of' covered every dispute except a dispute as to whether there was ever a contract at all. He held that the words should be given a wide interpretation of that kind so as to give effect to the parties' presumed intention not to have two sets of proceedings. And, in Incitec Ltd v Alkimos Shipping Corporation [2004] FCA 698 ; (2004) 138 FCR 496 at 503-504 [32] - [37] Allsop J held that the clear tide of judicial opinion as to arbitration clauses, where the fair reading of them is not confined, was to give width, flexibility and amplitude to them (see [2004] FCA 698 ; 138 FCR 496 at 504 [36] ). Allsop J agreed with what French J had said about the construction issue in Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (1993) 43 FCR 439. They all arise out of matters which are antecedent to the contract even though they may involve questions which also go to its performance. No authority has been cited to me which would support the wide construction of the clause contended for by Tomlinsons and certainly the natural meaning of the words does not support their extension to disputes arising out of matters antecedent to the agreement. They pointed out that in strictness disputes arise not out of a contract but out of conflicting views taken by the parties to the contract as Lord Sumner had said in Produce Brokers Co Ltd v Olympia Oil and Cake Co Ltd [1916] 1 AC 314 at 328. The English Court of Appeal said that there were two stages which must be gone through in order to achieve a solution, first consideration of what was the nature of the dispute and secondly whether that dispute was within the scope of the arbitration clause. Their Lordships, obiter, observed that where contractual and tortious disputes were so closely knitted together on the facts, that the agreement to arbitrate on one can probably be construed as covering the other, the dispute falls within the arbitration clause ([1983] 2 Lloyd's Rep at 183). 109 And, in Allergan Pharmaceuticals Inc v Bausch & Lomb Inc (1985) 7 ATPR SS40 -636 at 47,173-47,174 Beaumont J held that it was not enough to point to the contract as part of the background to allegations of contraventions of Pt V of the Trade Practices Act 1974 (Cth). The latter causes of action arose pursuant to statute and existed independently of contract. He said that they were consumer protection provisions which in no way depended upon any private agreement for their source. And, conduct for the purposes of Pt V of that Act would be established, if at all, irrespective of the contractual relations with the immediate parties. However, in Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 1102 at [56] Allsop J suggested that the phrase 'arising out of' in an arbitration agreement reflected the practical, rather than theoretical, meaning to be given to the word 'contract' out of which disputes may arise. He said this could involve practical commercial considerations such as formation, extent and scope. Allsop J recognized that this wider construction was contrary to that of the Full Court in The 'Kuikang Career' (1998) 90 FCR 1 (see [2005] FCA 1102 [68]). I am of opinion that the Full Court's construction is correct for the reasons given above and in any event, like Allsop J, I am bound by it. 111 Comandate Marine argued that the decision of the majority of the High Court in Coventry v Charter Pacific Corporation Ltd [2005] HCA 67 ; (2005) 222 ALR 202 indicated that The 'Kiukiang Career' 90 FCR 1 was no longer good law and it should not be followed. I do not accept that argument. 112 The construction of the operation of ss 82 and 86 of the Bankruptcy Act 1966 (Cth) with which Coventry v Charter Pacific Corporation Ltd [2005] HCA 67 ; (2005) 222 ALR 202 was concerned involved the rules for set off in bankruptcy and the statutory construction of the expression 'arising by reason of a contract'. Thus Gleeson CJ, Gummow, Hayne and Callinan JJ held that a claim for damages for fraudulent misrepresentation brought by one contracting party against another or a claim for misleading or deceptive conduct which induced the party misled to make a contract with the other were, for the purposes of the Bankruptcy Act 1966 (Cth), claims 'arising by reason of a contract' (222 ALR at 219 [71]). The claim that misleading and deceptive conduct induced the entry into a contract necessarily was a claim which arose 'by reason of the contract', because if the thing complained of, namely the entry into the contract, had not occurred there would be no contract which could then be proved under s 82(2) of the Bankruptcy Act 1966 (Cth). 113 Here, the claim under the Trade Practices Act 1974 (Cth) however, did not 'arise out of the contract', because that expression necessarily suggests that the contract was the source of the claim. Rather most of the essential elements of the cause of action under that Act existed before the contract came into existence, although elements of the performance of the contract, or non performance of the contract will have become relevant. 114 Next Comandate Marine argued that a grant of the anti-anti-suit injunction to enable Pan to litigate its claims under the Trade Practices Act 1974 (Cth) amounted 'to the court aiding a party to commit a breach of contract'. The exercise by the Court of its jurisdiction to make orders pursuant to statutory powers where a party has engaged in conduct which is misleading or deceptive in breach of the statutory norms provided by the Parliament, is simply an instance of the Court enforcing the law. If Comandate Marine were found to have engaged in any misleading or deceptive conduct in contravention of the Trade Practices Act 1974 (Cth), it would not be entitled to rely upon its strict contractual rights to defeat the statutory power of the Court to grant remedies to Pan flowing from that contravention. I do not understand how that could be. The facts are objective. The evidence of Mr Athanassiou and Capt Piperakis is perfectly clear that each of them recognized that there was no actual charter party document in final form in existence at the time contractual relations commenced between the parties and that such a document was to be brought into existence later (cf Masters v Cameron [1954] HCA 72 ; (1954) 91 CLR 353 at 360). No conduct of Pan induced some other state of mind. There was nothing misleading and nothing unconscionable in Pan taking the stance it did about the matter. I see no substance in the argument. I am of opinion that this argument ignores the fact that the Court's jurisdiction to give relief under the Trade Practices Act 1974 (Cth) is of considerable importance and reflects the public interest expressed in the enactment of statutes by the Parliament of the Commonwealth of Australia as laws that are to govern commercial behaviour in this country. I remain of the opinion I expressed in my earlier judgment ( Pan Australia Shipping Pty Ltd v The Ship 'Comandate' [2006] FCA 881). 117 However, Comandate Marine, by its counsel, offered an undertaking to the Court that if it were found that s 7(2) of the International Arbitration Act 1974 (Cth) did not require a stay of the Trade Practices Act 1974 (Cth) claims, to consent to the London arbitration determining all issues raised between the parties under the latter Act in respect of any conduct of the parties to which that Act would apply as a matter of Australian law relating to formation and/or entry into of the charter and/or relating to the conduct of the parties in connection with the performance of the charter as being disputes within cl 45(b) and as part of the existing dispute referred to the London arbitration. 118 Comandate Marine, by its counsel, also proffered an undertaking to the Court to agree that the arbitrators would have such jurisdiction, and it undertook not to prevent the arbitrators exercising that jurisdiction in determining the whole of the dispute between the parties. 119 Pan does not want London arbitrators to determine its claim under the Trade Practices Act 1974 (Cth). Comandate's undertaking cannot extend the jurisdiction of the arbitrators. There is no power in s 7(2) to refer to arbitration or to stay claims under the Trade Practices Act 1974 (Cth) that do not otherwise fall within the agreement to arbitrate. The Court has power only to stay the proceedings to the extent that they relate to what is properly within the arbitration clause ( Tanning Research Laboratories Inc v O'Brien [1990] HCA 8 ; (1990) 169 CLR 332 at 344). While it may be convenient for the parties to have their whole dispute litigated in one forum, they cannot be forced to do so in a case like the present where the whole dispute does not arise out of the charter party. 120 Given that there is now no dispute that Comandate Marine would seek to obtain against Pan an injunction from the High Court of Justice in England restraining its prosecution of these proceedings, if the whole dispute were not arbitrated in London, it seems to me that for the reasons that I gave on 22 June 2006 the injunction must be continued. The Master and crew, when not at sea, might be located at various places in the northern hemisphere. The vessel's classification society representatives were in Greece, Singapore and Sri Lanka. The vessel had dry docked in Sri Lanka in December 2005 and there were also the ship's agent and surveyor located there. The owners' and charterers' Singapore agents may be needed together with the repairers in Singapore who repaired the vessel following a collision it had in Melbourne in June 2006. Capt Piperakis said that it would cause him personal and financial inconvenience to have to travel to Australia to attend a hearing in the matter whereas it would be relatively simple for him to travel to London. 122 It is likely that quite a number of witnesses who will be required to be called are persons from Australia who will give evidence as to the observations by the Australian Maritime Safety Authority Officers and others in the Australian ports as to the condition of the Comandate at various times together with Australian surveyors. It will also be likely that evidence will be called from witnesses based in Singapore and Sri Lanka as to the dry docking in Sri Lanka in 2005, the delivery and later repairs in Singapore this year. There may be some need for persons to come from Greece although I think that Capt Piperakis' evidence indicated that he was proceeding on an assumption that the existence of a contract at all may be in dispute. I do not think that that assumption is any longer correct, although it was certainly a matter that had been flagged by Pan in the interlocutory hearing on 22 June 2006. 123 While the Master and crew are likely to be witnesses as to the vessel's condition, it will not make much difference where the hearing is so far as convenience to them is concerned. Wherever they are in the world either they will have to come away from whatever vessel they are on at the time or use electronic communication to give evidence at any hearing. The critical aspects of the claims of unseaworthiness and defective condition of the vessel together with the evidence as to the incurring of the damage to the hull are likely to be given by Australian witnesses and members of the ship's company. Pan had identified from the documents produced on subpoena at this early stage at least 12 different witnesses, 10 from the Authority, who may be required to give evidence. Of course, certain parts of the evidence may become uncontroversial as the case progresses but the impression I have is that leaving aside witnesses who will need to come from Sri Lanka and Singapore, on the material before me the likelihood is that most of the material witnesses other than the ship's company will be from Australia. There does not appear to be any relevant connection to London other than the requirement in cl 45(b) that the seat of the arbitration be there. 125 It follows that the interim injunction which I granted on 13 July 2006 until further order will continue undisturbed. | election stay of proceedings anti-anti-suit injunction where arbitral proceedings brought in england and in rem proceedings brought in federal court of australia by same party whether action in rem constituted election to litigate rather than arbitrate abandonment of right to arbitrate whether right to arbitrate waived whether arbitration agreement rendered inoperative definition of agreement in writing under international arbitration act 1974 (cth) interpretation of art ii r 2 of the new york convention meaning of 'contained in an exchange of letters or telegrams'- agreement formed by provision of bank guarantee scope of arbitration clause whether trade practices claim falls within scope of arbitration clause where arbitration clause governed claims 'arising out of this contract' stay of proceedings continuation of anti-anti-suit injunction continuation of injunction to restrain the defendant from obtaining an injunction in a foreign court which would restrain the continuation of proceedings in the federal court of australia where defendant threatening to take steps in english high court of justice to restrain proceedings in the federal court of australia arrest of vessel in personam claim arbitration arbitration arbitration practice & procedure admiralty & maritime jurisdiction |
The decision was to affirm the decision of the Tax Agents' Board of New South Wales (the "Board") made on 25 January 2005 refusing to re-register the applicant as a tax agent pursuant to s 251JC of the Income Tax Assessment Act 1936 (Cth) (the "1936 Act"). 3 The review came before the AAT for hearing on 27 June 2006. On 25 November 2005, a six-page statement of facts and contentions was filed on behalf of the respondent Board. 5 Later, the Board served a transcript of interview with Mr Mohammed Nizam Khan and a statement of Ms Jamilla Millerd. The matters covered by these statements were the subject of opening by counsel who also appeared for the Board before the Tribunal. Mr Khan says --- or will say that he was placed under considerable pressure in the course of signing the two documents presented to him. Indeed he will say that the pressure to which he was exposed amounted to duress. That material was then presented to the Board who then closed the file, as they say. I should say that Mr Khan did authorise Mr Akbar Ali to sell a motor car of his, which Mr Akbar Ali did in fact account, and there is no issue about that. The Board then of course reconsidered the matter. It obtained material from Mr Khan, and indeed he has made a statement and he will give evidence in this Tribunal. Put bluntly, Senior Member, if Mr Khan is accepted as a witness of the truth, then probably that would end the matter there and then as far as the satisfaction by Mr Shaheed that he is a person of good fame, integrity and character. I take these to be references to the same person. I will use the form Ali Akbar or Mr Akbar. 7 The respondent made no statement that it proposed to call Mr Ali Akbar. Counsel identified which persons were to be called by the Board. They included Mr Khan (who had come from Fiji) and his sister Ms Millerd; they did not include Mr Ali Akbar. When you asked if I had any material, we actually sent in a statutory declaration on Mr Akbar Ali. I know my friend has not chosen, despite our requests, to call Mr Akbar Ali. There is a statutory declaration there from him. But, I mean, in all fairness he was put forward by Mr Allott as their witness initially. He initially suggested that he would be called. We took the precautionary step of getting a statutory declaration from him, and we would be probably seeking to have him, unless my friend is prepared to accept that statutory declaration as true and correct, and to allow it into evidence as it is, but clearly that flies absolutely in the face of the evidence that is being purportedly adduced --- or will be purportedly adduced by Khan and Millerd. But if you are calling him, it really has no more status than that of a proof of a witness, does it? It appears to be undated. If I mark it as A3 do you object, Mr Skinner? I don't really object to it being marked, no. 9 At the hearing, Mr Khan gave evidence and was cross-examined. He stated that the applicant had pressured him to retract his earlier assertions against the applicant. The applicant gave evidence at the hearing contrary to this. Neither party took exception to this approach. "Fit" (or "idoneus") with respect to an office is said to involve three things: honesty, knowledge and ability: "honesty to execute it truly, without malice, affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it" --- Coke. He should be a person of such competence and integrity that others may entrust their taxation affairs to his care. He should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodged by the agent have been prepared by him honestly and competently. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question. In this context, the Senior Member referred to the well-known passage in the judgment of Dixon J in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 362. 18 The Senior Member recited the fact that in June 1997 the applicant sought the Board's approval to operate branch offices at Liverpool in New South Wales and Dandenong in Victoria. This request was declined in September 1998, on the basis that the applicant would not be able to satisfy s 251N by the exercise of proper supervision and control. Whilst the Senior Member expressed doubt about the validity of any statutory basis for such approval, he considered the facts as relevant, in that the Board had stated to the applicant its view that the applicant would not be able to exercise sufficient control over their operation. Those conclusions about Dandenong do not appear to form the basis of any operative criticism of the applicant by the AAT in its decision. 19 Notwithstanding the Board's purported refusal of the application to open an office in Liverpool, the applicant did so. In 2004, the applicant told investigating officers of the Tax Agents Integrity Unit that the office began in 1998 or 1999. He later wrote to the Board and stated that the Liverpool office opened in 2000. This letter (of 25 November 2004) stated that the " Liverpool and Harris Park offices have now been closed for business. The signs have been taken out and all advertising has ceased". So far as the Liverpool office is concerned I note that the report from the Tax Agents Integrity Unit does not state that the officers entered suite 5 so there is no evidence that any work was being carried out from those offices at that time. I accept that the Applicant at the time had made arrangements for the signage to be removed but his letter to the Board does not say that but rather makes the positive statement that the signage had been removed. It is difficult to conclude that the statement about signage was taken by the AAT to ground a conclusion about the applicant that was unfavourable. Spot checks were also conducted. I do not accept all of Mr Cronin's evidence in that the Applicant's practice is quite different to that of Mr Cronin's firm, but the numbers appear to be excessive. That complaint was withdrawn by Nizam Khan but later resurrected on his behalf by Ms Millerd. 27 The Senior Member then dealt with the evidence of Mr Khan and his sister, and the cross-examination of the applicant. One aspect of the dispute was whether the applicant had been prepared to deal with Mr Khan's sister. In this regard, the Senior Member formed an unfavourable view of the applicant's evidence. In any event, as a result of what Mr Khan saw as the refusal of the applicant to deal with his sister, he gave her a power of attorney (made and registered in Fiji) in order that she might advance his claim to his tax refunds. The controversy centred upon whether the applicant, in company with two men, exerted pressure on Mr Khan to withdraw his complaint. (See the opening by counsel before the AAT referred to at [5] above. These men then used the fact that the Applicant and Mr Nizam Khan were fellow Muslims to induce him to sign the documents and withdraw his complaint. Mr Rafiq knew Mr Nizam Khan and said "just because of you Mr Shaheed is in a problem and this is the reason he is here to see you. Because of this and other pressures ie his daughter's impending wedding and the fact that he was out of work, he succumbed to the pressure brought to bear on him and signed the documents absolving the Applicant. He states that he was accompanied by three other men one of whom was Mr Singh, the Notary Public whose seal is on the Statutory Declaration and Authority. The documents and the letter withdrawing the complaint were drawn up in the office of solicitors in Suva. He further stated that rather than being dressed in clothing favoured by devout Muslims the persons accompanying him wore in [sic] traditional Indian dress. He also stated that he had telephoned Mr Nizam Khan from Australia prior to his visit and discussed the matter with him. This was denied by Mr Nizam Khan. What I find strange is that it was necessary for the Applicant to arrive at Mr Nizam Khan's home, unannounced and accompanied by three other persons. Mr Nizam Khan said that they arrived about 7.30 pm and the Applicant himself stated that they left Mr Nizam Khan's home at about 10pm. If matters had been explained to Mr Nizam Khan's satisfaction in the telephone calls from Australia it would not have been necessary to have remained for long at his home if indeed necessary to go there at all. Mr Nizam Khan could have been contacted by mail, asked to go to a solicitor's office in Suva to sign the necessary documents or even the Notary could have attended, by himself or with the Applicant at Mr Nizam Khan's home. That four men attended apparently in the evening and remained for some time persuades me that some pressure was brought to bear upon Mr Nizam Khan. I find the last paragraph of that letter puzzling as to why it was thought necessary. If, as alleged, the Notary, Mr Singh was there he could have adduced very cogent evidence given his standing as a Notary. The Applicant had access to the statements of Mr Nizam Khan well before this matter came on for hearing and thus would be aware of the import of Mr Nizam Khan's evidence. Likewise the final paragraph of the July 15 th , 2003 letter quoted above seems to have been worded so as to pre-empt any later complaint. On the face of his statements Mr Ali Akbar may have defrauded Mr Nizam Khan of monies paid to him on Mr Nizam Khan's behalf but I would have thought that Mr Ali Akbar was an essential witness in the Applicant's case. Nevertheless I accept them as truthful witnesses in the main and in particular where their evidence conflicts with that of the Applicant, I prefer their evidence. The Applicant's evidence in cross-examination was not consistent and at times he began to argue with the cross-examiner. As stated above I reject this. He also implied improper motives for Ms Millerd bringing her complaint when she did and I reject this suggestion. In the Applicant's case he has failed that test. The reasons were: first, that he did not show Ms Millerd the authority to pay Mr Akbar, contrary to the statement to the Board that he did; and secondly, that he used undue pressure to induce, improperly, Mr Khan to withdraw the complaint against him. The member appeared to identify these two matters as "... sufficient to state that the Respondent could have no confidence in him as a person of integrity ". He then took no steps to notify the Respondent of the existence of those offices despite the requirement of Regulation 161 to do so. I can only regard this as a direct deception on the Applicant's part. I have also commented previously on his stating that matters had been done, where in fact they were to be done. I will deal with them as they were organised in the written submissions filed in support of both. He should be a person of such competence and integrity that others may entrust their taxation affairs to his care. He should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodged by the agent have been prepared by him honestly and competently. A person may not be fit and proper in the relevant sense if his competence and skill is unchallenged but his integrity is. Competence and integrity are required. This is so because clients and the Tax Office must proceed on the basis of his competence and honesty. 39 I do not think that the reasons of the AAT betray any misunderstanding of the terms of s 251JC. The time to determine fitness to practice. 41 I do not see any error in the AAT's approach, whatever expression of principle was to be applied. The AAT heard all the evidence. Its conclusions were directed fundamentally to the lack of integrity of the applicant. Any textual differences between the reasons of Branson J in Aged Care Standards and Accreditation Agency Ltd v Kenna Investments Pty Ltd [2004] FCA 843 ; (2004) 138 FCR 428 and Middleton J in Toohey [2007] FCA 431 are made irrelevant by the nature of the enquiry and the AAT's conclusions. The Senior Member, in examining past conduct and considering contested evidence, found a lack of truthfulness in the applicant and a proven lack of integrity. Any overlooking by the Senior Member of a late nomination by the applicant at the date of the AAT review was of no operative consequence to the decision. 43 Whilst some aspects of the reasoning of the AAT are less than pellucid (for example the content of [27] of the reasons in the circumstances of s 251K(2)(d) and s 251JC(1)(a)(i)), the Senior Member was alive to the requirement that he have regard to the serious consequences of a finding and to the consequence thereof, as required by the passage from Briginshaw [1938] HCA 34 ; 60 CLR 336 , quoted by him. The matters in [55] of the AAT's reasons that the applicant, in effect, misled the Board about showing Ms Millerd the authority, that he exerted improper pressure upon Mr Khan to withdraw the complaint and that he sought to deceive the Board about the branch offices, were sufficiently clear and serious to warrant the conclusion reached, taking into account Briginshaw. Indeed, the AAT itself doubted whether approval needed to be sought for the opening of offices. Rather, they were matters which went to the lack of integrity of the applicant. In particular, the first two related to a conclusion of an attempted deception of the Board. Whilst the third matter is less than cogent as to the integrity of the applicant, that is how the AAT used the matter and to that extent, it cannot be said to be legally irrelevant. 46 Section 251N of the 1936 Act was disavowed by the respondent before the AAT hearing as a basis for affirming the order. This did not, however, make irrelevant matters of behaviour of the applicant which went to his integrity. Central to the complaint was the weight given to the failure to call Mr Ali Akbar or any of the persons said to be present at the Fiji meeting. 48 There is no substance in this complaint. The respondent gave a detailed statement of facts and contentions. The opening by counsel was clear as to the significance of these events and as to whom he was calling in evidence. Counsel for the applicant made clear that the applicant was responsible for calling Mr Akbar and would call him (impliedly, if so advised). There was no misleading of the applicant or his counsel as to the importance of this body of material or whom counsel for the Board was calling. These matters were in contest and the Senior Member preferred the evidence of Mr Khan. 51 As to finding (b), the applicant submitted that the Senior Member was "clearly wrong" to conclude that the factual finds "could only" lead to an inference of direct deception. That is not what the Senior Member said. He said " I can only regard this as a direct deception . " This was a finding of fact, not a statement that no other conclusion was possible. 52 In the circumstances of the examination by the AAT of the question of the two offices, the lack of notification and of the cross-examination of the applicant about this, I am not persuaded that the conclusion was not open as a finding of fact. 53 Mr Skinner conceded that he had not put in terms that the applicant had sought to deceive the Board. The applicant's lack of candour with the Board was, however, put directly in issue. The conclusion in the last sentence of [55] was available, if not the only inference open. Given the findings on the applicant's evidence on other issues, this can be seen to be an available finding influenced by the whole evidence. 55 The same errors in approach were re-asserted. The fundamental attack was that the Senior Member could not reasonably conclude as he did on the issue of Mr Khan. I have already rejected this. The primary complaint is a factual one, in that it was concluded that the applicant had acted in the ways identified, which satisfied the AAT that he lacked the requisite integrity to be re-registered. This was a factual conclusion open to the Senior Member. 56 For the above reasons, the appeal in NSD 2273/2006 and the application in NSD 1956/2007 should both be dismissed with costs. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. | appeal from administrative appeals tribunal meaning of "fit and proper person to prepare tax returns" whether tribunal misconstrued meaning of "fit and proper" whether tribunal failed to have regard to the test in briginshaw v briginshaw [1938] hca 34 ; (1938) 60 clr 336 whether the tribunal took into account irrelevant considerations whether decision of tribunal otherwise unreasonable. administrative law |
The ACCC also alleges that Singapore Airlines gave effect to 68 of those understandings in contravention of s 45(2)(b)(ii) of the Act. The effect on competition which is proscribed by ss 45(2) and 45A (1) must be on a market in Australia: see ss 45(3) and 4E of the Act. The Statement of Claim pleads three markets for the supply by international airlines and acquisition by shippers of international air freight services, each of which is said to be a market in Australia. The first is a global market. The second, which is called "the Australian market", is for the supply and acquisition of international air freight services on inbound routes to Australia and on outbound routes from Australia. The Australian market is also said to include the supply and acquisition of air freight services between ports outside Australia, but where the freight originates in or is destined for Australia; where the air freight service includes an intermediate port within Australia; or where the transaction for the provision of the air freight services took place in Australia. The third market, which is called the "route specific market" comprises markets for the supply and acquisition of "two-way" air freight services between particular ports in Australia and particular ports outside Australia. Singapore Airlines contends that, save for one of the understandings, the Statement of Claim suffers from two fundamental defects and that it ought to be struck out. The first defect is said to be that the Statement of Claim fails to identify a market in Australia within the meaning of s 4E of the Act. The second is said to be that the contraventions are alleged with such generality that they cannot amount to contraventions of the Act. This is because the provision of the relevant understandings, or the giving effect thereto, must have the proscribed effect on competition in a market in Australia. Singapore Airlines contends that the essential vice in the pleading is that it fails to plead the material facts which are alleged to give rise to the contravention. The most important of those paragraphs are: At all material times there has been demand for air freight services to and from places throughout the world, including places within Australia, by persons wishing to transport goods internationally (" customers "). Unless the context otherwise requires, a reference herein to a shipper includes a reference to a shipper who is also the consignee. At all material times the demand referred to in paragraph 3 has been met by the supply of air freight services by airlines which transport goods internationally by air (" international airlines "). The particulars of the international airlines are lengthy. They are said to include, but are not limited to, a list of approximately 80 named airlines. Some are well known as carriers to and from Australia such as British Airways, Cathay Pacific, Japan Airlines, Qantas and Singapore Airlines (which is referred to by the acronym SAC) and its parent Singapore Airlines Ltd (referred to by the acronym SIA). The particulars of the international airlines also include a number of other carriers which may be less well known to persons outside the industry such as Dragonair, Ethiopian Airlines and Polar Air. Goods may be transported by air from one city or port (" origin port ") directly to another city or port (" destination port ") (hereinafter referred to as " a direct service ") or may be routed via a third (or more) city or port (" intermediate port ") (hereinafter referred to as an " indirect service " and each leg of an indirect service is hereinafter referred to as a " sector "). As further background to the pleading of the relevant markets, [10] --- [11] set out the arrangements which are made between airlines for the transport of goods internationally. The practice of interlining is described in [10]. It involves arrangements for carrying goods for sectors between an origin port and a destination port under which a single airway bill is issued for the entire journey by the first airline transporting the goods. That airline receives full payment but pays a proportion to the IATA Clearing House for the other airlines involved in the journey. Competition between airlines is described in [12]. International airlines which supply air freight services between ports are said to compete with, and be constrained by, all other international airlines which, inter alia , offer direct or indirect services using their own airlines, those of other airlines, or a combination of both, between those ports or geographically close ports, for example, as a result of interline agreements. The involvement of shippers, freight forwarders and integrators in the market is described in [13] --- [23]. 13.4 by a shipper engaging an international airline directly, for example, by telephone or via the internet, whereupon the shipper may be provided with a quote and allocated space on a particular flight for an air freight service and, in such a case, a freight forwarder may be appointed either by the shipper or by the airline after the quotation is provided and accepted and the space on the flight is allocated. As it does not fly from Dublin, it might arrange instead the surface transportation of the goods to Heathrow. It might then fly the goods to Sydney, Melbourne or Brisbane and then tranship them by domestic flight to Canberra from Brisbane, or by road transport from Sydney. Similar or alternate legs could be arranged by the shipper or the freight forwarder. Further, international airlines, freight forwarders and shippers can substitute a new intermediate port for an existing intermediate port (either with a substitution of the origin or destination port or without any such substitution of the origin or destination ports). Further, in relation to each sector for air freight services, the suppliers or potential suppliers of air freight services on that route include at least those international airlines which fly from the port of origin and those international airlines which fly to the port of destination. The relevant markets which are the subject of the alleged contraventions are described in [24] --- [27] as follows: By reason of the matters alleged in paragraphs 3 to 23, at all material times there was a worldwide market for the supply by international airlines and the acquisition by shippers of air freight services (" the Global Market "), which market was a market in Australia within the meaning of section 4E of the TPA. Further or in the alternative to paragraph 25, by reason of the matters alleged in paragraphs 3 to 23 above, at all material times there were markets (" Route Specific Markets ") for the supply and acquisition of two-way air freight services between particular ports inside Australia and particular ports outside Australia which markets were markets in Australia within the meaning of section 4E of the TPA. Singapore Airlines is said to have been in competition with other international airlines for the supply of air freight services supplied in each of those relevant markets. 28.3.2 In the Australian Market, SAC competes with all international airlines which actually fly or potentially can fly to ports within Australia or which can arrange for air freight services to and/or from ports within Australia by way of interline or block space agreements or otherwise, and alternatively those airlines together with airlines supplying services which fall within paragraph 26. 28.3.3 In each Route Specific Market, SAC competes with all international airlines which actually fly or potentially can fly (directly or indirectly) on those routes or which can arrange for air freight services on those routes by way of interline or block space agreements or otherwise. In this subparagraph, a reference to "routes" includes routes to and from adjacent ports which fall within paragraph 12.5. The genesis of the fuel surcharge is to be found in a resolution of a Meeting of Cargo Tariff Coordinating Conferences of IATA held in Geneva in August 1997. This is described in [30] of the Statement of Claim. A further resolution was passed in May 1998 under which the IATA Secretariat was to continue monitoring the average weekly spot price of aviation fuel as an index against the average price in June 1996. This is referred to as the IATA Fuel Price Index and is described in [31]. It appears that in about April 2000, IATA ceased publishing the IATA Fuel Price Index, apparently as a result of advice from IATA's legal advisers that IATA members could be exposed to anti-trust liability if IATA continued to publish the Index. This is alleged in [37]. Following cessation of the publication of the IATA Fuel Price Index, Lufthansa commenced publishing its own fuel price index and a methodology (referred to as the "Lufthansa Initial Methodology") which provided for a calculation of a surcharge when the stipulated trigger point was reached. This is alleged in [38]. Revisions of the Lufthansa Initial Methodology and actions taken are described in [40]ff. One such action was the imposition of a fuel surcharge in December 2003 by Lufthansa and other international airlines, including Singapore Airlines. This is described in [47.7] which refers, inter alia , in [47.7.1] to the surcharge imposed by Singapore Airlines for separate IATA Tariff Conference Areas, namely: All this is a prelude to the allegation of the 73 understandings which commence in [49] with the Lufthansa Fuel Surcharge Understanding. The Statement of Claim alleges eight separate types of understanding. The first and most common type of understanding is concerned with understandings that contain provisions to support fuel surcharges in connection with the supply of international air freight services globally and from Singapore, Indonesia, Hong Kong and United Arab Emirates to various destinations including Australia. The Statement of Claim alleges that these provisions constitute price fixing within s 45A(1) and that certain of them had the purpose or effect of substantially lessening competition within s 45(2). The second type of understanding concerns understandings containing provisions to impose security or insurance surcharges globally or from destinations in Europe and from the places mentioned in relation to the first understanding. These provisions are said to constitute price fixing under s 45A(1). The third is an understanding to impose a war risk surcharge in connection with the supply of international air freight services from Indonesia. This is said to constitute price fixing under s 45A(1). The fourth is an understanding to impose a customs fee in connection with the supply of international air freight services from Indonesia and from anywhere in the world to Indonesia. This is said to constitute price fixing within the meaning of s 45A(1). The fifth is an understanding between Singapore Airlines and Lufthansa not to undercut prices offered by each other and not to compete for the supply of air freight services including, but not limited to, air freight services to and/or from Australia. This is said to constitute price fixing within s 45A(1) , to be an exclusionary provision within the meaning of s 4D and to have the purpose or effect of substantially lessening competition within the meaning of s 45(2). The sixth is an understanding not to offer prices lower than specified prices for the supply of air freight services from Jakarta to various destinations including Sydney and Perth. This is said to constitute price fixing within s 45A(1). The seventh is an understanding between Singapore Airlines and (at least) Malaysian Airlines providing for those airlines to increase the prices charged for the supply of air freight services for the transport of meat from Australia to the Middle East. This is said to constitute price fixing within s 45A(1). The eighth type of understanding concerns commission paid to cargo agents in respect of the fuel surcharge charged on the supply of air freight services from Singapore including, but not limited to, flights to Australia. This is said to constitute price fixing under s 45A(1) and to have had the purpose or effect of substantially lessening competition within s 45(2). Mr Archibald QC, who appeared for Singapore Airlines took me to the allegation of two separate understandings which he said illustrated the vice in the pleading. This resulted in complaints from the other international airlines (including SAC) that they had not received any notification about the waiver and a request for a meeting of ACRB --- Indonesia to discuss the issue. Garuda agreed and that meeting of ACRB --- Indonesia was held on 9 May 2003 at which time Garuda agreed to reimpose the fuel surcharge at the urging of the other airlines at the meeting including SAC, Emirates, Malaysia Airlines, SriLankan Airlines, Thai Airways, KLM, Kuwait Airlines, Air India, Cathay Pacific, Lufthansa, Cargolux, Gulf Air and British Airways. 155.2.2 The May 2003 Indonesia Understanding was arrived at at the meeting of ACRB --- Indonesia held on 9 May 2003. 155.2.3 The minutes of the ACRB --- Indonesia meeting held 9 May 2003 were circulated by email and/or fax to those airlines that attended and to members of the ACRB - Indonesia that did not attend. Particulars will be provided after discovery. 156. The second was the United Arab Emirates 2004 Level 5 surcharge understanding as follows: On or about 27 July 2004, SAC made an arrangement or arrived at an understanding with other airlines including Alitalia, Air France, British Airways, Cargolux, Cathay Pacific, China Airlines, Emirates, FedEx, Kenya Airways, KLM, Kuwait Airways, Lufthansa, Martinair and Swissair containing a provision that the parties would impose a fuel surcharge of AED0.45/kg to the Middle East and Indian Sub-continent and AED0.90/kg to all other destinations (equivalent to Level 5 on the Lufthansa Methodology) on the supply of air freight services from the United Arab Emirates with effect from on or about 1 August 2004 (the "UAE 2004 Level 5 Surcharge Understanding"). Further particulars may be supplied following discovery. 341. In the period from on or about 1 August 2004 until on or about 1 October 2004, SAC imposed a fuel surcharge of AED0.45/kg to the Middle East and Indian Sub-continent and AED0.90/kg to all other destinations on the supply of air freight services from the United Arab Emirates. The contraventions of s 45(2)(a)(ii) of the Act, by making or arriving at each of the 73 understandings, are pleaded in [437]. However somewhat confusingly, there are only 68 understandings listed in [438] as the five understandings which appear at [437.24] --- [437.28] are repeated in the following five sub-paragraphs. The 68 instances listed in the second [438] include the May 2003 Indonesia understanding at [438.17] and the UAE 2004 Level 5 Surcharge Understanding at [438.41]. The Lufthansa Price Understanding is also alleged to be an exclusionary provision in the following paragraphs of the Statement of Claim: By reason of the matters pleaded herein, SAC has contravened 45(2)(a)(i) of the TPA by making or arriving at the Lufthansa Price Understanding. By reason of the matters pleaded herein, SAC has on each occasion contravened 45(2)(b)(i) of the TPA by giving effect to the provisions of the Lufthansa Price Understanding. Section 45(3) specifies what is meant by "competition" in ss 45 and 45A. The Act does not contain a definition of the term "market" but s 4E contains a territorial limitation and provides for substitutable or competitive goods or services to be included within the meaning. Section 45A(1) is a deeming provision. The effect of it is to deem price fixing arrangements to be illegal without the need to establish that the arrangements have the effect of substantially lessening competition. The only other section to which reference need be made is s 5(1) which, relevantly, extends the provisions of Part IV of the Act to conduct engaged in outside of Australia by bodies corporate carrying on business within Australia. However, ultimately, the questions which arise are quite narrow and, for the most part, do not turn upon any contentious principles of law. Both parties agreed that the Act can be contravened by conduct engaged in extraterritorially, where that conduct harms or affects competition in a market in Australia, Further, there was no real dispute as to the question of the correct principles of market definition. These principles were authoritatively stated by the High Court in Queensland Wire Industries Proprietary Limited v Broken Hill Proprietary Company Limited [1989] HCA 6 ; (1989) 167 CLR 177 at 188, 195, 199 and 210, and have been referred to in numerous other authorities including Singapore Airlines Limited v Taprobane Tours WA Pty Ltd [1991] FCA 621 ; (1991) 33 FCR 158 at 174. The concept of a market is a flexible one; it is the area of close competition between firms or the area of rivalry between them. In defining the market, it is necessary to consider the range of economic activity, the class of products and the geographic areas in which the activities occur. Section 4E specifically provides that the market must be a market in Australia and that it includes products which are substitutable or otherwise competitive. Mr Archibald, who appeared for Singapore Airlines, accepted, for the purposes of the present application, the market definitions alleged by the ACCC in [24] --- [27] of the Statement of Claim. In making this concession, he pointed out that if the matter goes to a final hearing, Singapore Airlines may contest the descriptions of the global market, the Australian market and the route specific market. Mr Archibald's primary argument in the present application was that the allegations made in the Statement of Claim are beyond the reach of the Act because they include understandings to fix the price of international air cargo services supplied on routes either wholly outside Australia, or from outside of Australia to Australia. Neither, it is argued, can constitute the supply of a service within a market in Australia within the meaning of the Act. Moreover, even if a market in Australia were to be identified, Mr Archibald submitted that the Statement of Claim is nonetheless defective as it fails to identify the provisions of the alleged understandings that fix the prices or restrict the supply of services supplied in competition in a market in Australia, or that have the purpose or likely effect of substantially lessening competition in a market in Australia. The ACCC responded by pointing out that each of the pleaded markets is stated to be a market in Australia, so that the requirements of s 4E of the Act are satisfied. Mr O'Bryan SC, who appeared for the ACCC, submitted that this is supported by the authorities which have considered the meaning of the expression "a market in Australia", in particular the cases which have looked at the question of whether a global market is such a market in accordance with s 4E. Mr O'Bryan argued that in determining the geographic location of the market, the emphasis should not be on the place of the contract, and is not restricted to the sphere of activity of a corporation or the limit of its actual sales. Rather, a conventional analysis will focus on factors including the location of the actual and potential buyers and sellers, and the location of the relevant competitive activities. Further, Mr O'Bryan argued that the minimum required nexus with Australia is either that the arrangement has or is likely to have an anti-competitive purpose or effect in a market in Australia, or that any of the parties to the arrangement has fixed or controlled prices in relation to services in respect of which they are in competition in a market in Australia. It is true that the authorities, including three recent cases that have considered the question in relation to international air freight services, accept the proposition (either expressly or impliedly) that a global market is capable of constituting a market in Australia: Riverstone Computer Services Pty Limited v IBM Global Financing Australia Limited [2002] FCA 1608 at [21] , Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd [2008] FCA 1458 ; (2009) 251 ALR 166 at [21] ; Australian Competition and Consumer Commission v Qantas Airways Ltd (2009) 253 ALR 89 at [35]; Emirates v Australian Competition and Consumer Commission [2009] FCA 312 at [70] . Also, in Emirates , Middleton J accepted that inbound and outbound air freight services are capable of being part of the Australian market: Emirates at [62], [63]. It follows in my view that Singapore Airlines cannot succeed on its first objection to the Statement of Claim because the pleaded markets are at least capable of amounting to markets in Australia. But it does not follow that this provides an answer to the second ground of attack on the pleading. That is because the Statement of Claim alleges a very large number of price fixing understandings, many of which concern freight services between routes which, on their face, have no connection with Australia. This is illustrated in the pleading of the May 2003 Indonesia Understanding and the UAE 2004 Level 5 surcharge understanding which I have set out at [38] and [39] above. The difficulty which arises is that the Statement of Claim goes on to allege that the making and giving effect to the entirety of the alleged understandings contravenes s 45(2) of the Act and that the said provisions of the understandings are provisions to which s 45A of the Act applies. What is then missing from the pleading is a statement of the material facts which support the allegation that, taking the example of the May 2003 Indonesia Understanding, the price fixing arrangement in respect of the carriage of freight from Indonesia to Europe, Africa and the Americas has the proscribed effect on competition under s 45(2) of the Act on a market in Australia. That such an effect must be established is clear from the provisions of ss 45(2), 45(3) and 4E. Also, for s 45A(1) to be engaged, the services that are the subject of the anti-competitive provision must be supplied by the party to the illegal understanding in competition with the other party in a market in Australia: see Emirates at [22], citing Eastern Express Pty Limited v General Newspapers Pty Limited (1991) 30 FCR 385 at 419---420; South Sydney District Rugby League Ltd v News Ltd [2000] FCA 1541 ; (2000) 177 ALR 611 at [195] and ss 45A(8), 4D(1)(a) and 4D(2) of the Act. This deficiency in the pleading of the occasions on which s 45A(1) is engaged is again illustrated by the May 2003 Indonesia understanding, the parties to which are said to include Singapore Airlines and others such as Kuwait Airways and Cargolux. The services are said to include the supply of air freight services from Indonesia to Europe, Africa and the Americas. But there is no statement of material facts that Singapore Airlines and the other airlines are in competition with each other in a market in Australia in respect of the supply of air freight services from Indonesia to those destinations. These deficiencies are also illustrated by the pleading of the UAE 2004 Level 5 surcharge understanding where the impugned provision is an understanding between the parties which relates to a fuel surcharge on the supply of air freight services from the United Arab Emirates, which is charged at one rate to the Middle East and the Indian sub-continent and at another rate to all other destinations. Again, what is missing is a statement of the material facts which demonstrate the proscribed effect on competition in Australia and that the services are supplied by the parties in competition with each other in a market in Australia. In short, there are two essential vices in the pleading. The first is a failure to address the ingredients of the field of rivalry between the parties to the understandings. The second is a consequent failure to state material facts which disclose how the parties to an understanding for the supply of air freight services from, for example, Jakarta to Paris are in competition with each other in a market in Australia. It is not sufficient to assert that higher prices on routes between points outside Australia of themselves have an adverse price effect on consumers in Australia. What s 45(2) is concerned with is the effect on competition in a market in Australia, not the effect on consumers residing in Australia. In Auskay , Tracey J dealt with an application to strike out a pleading in a class action that alleged contraventions of ss 45 and 45A of the Act in relation to understandings between Qantas and other international airlines in terms that resemble the nature of the allegations in the present case. This will depend on where negotiations between the respondents and their customers take place and contracts are entered into. The deficiency which Tracey J identified in the pleading was that it failed to identify any market whatsoever. That is sufficient to distinguish Auskay from the present proceeding. The observations made by Tracey J at [21] as to the relationship between the geographic market and the place of contracting were somewhat diluted by the remarks of Middleton J in Emirates at [72]. I will refer to that issue below but it does not affect the pleading deficiencies which I have identified in the ACCC's Statement of Claim. In ACCC v Qantas , Lindgren J imposed penalties and other relief on Qantas for contravention of s 45 of the Act in relation to understandings of the type alleged in the present proceeding. However, in reading his Honour's remarks, it is necessary to bear in mind that, for the purpose of the proceeding, Qantas admitted that its conduct contravened s 45 of the Act. His Honour determined the appropriate penalty in light of a statement of agreed facts which included an admission by Qantas that there is a worldwide market for air cargo services and that its conduct may also be considered by reference to a number of narrower markets, including a market or markets in Australia. Lindgren J referred at [31] to the relevant territorial connection provisions stated in ss 4E and 5 of the Act. He was satisfied that s 5 extended the provisions of s 45 of the Act to the relevant conduct because Qantas is incorporated in Australia. Similarly, s 5 would apply in the present case (subject to the elimination of the identified defects) because Singapore Airlines carried on business here. The two critical paragraphs of the judgment of Lindgren J are [35] and [38] which I will set out below: The definition of "market in Australia" in s 4E excludes, however, a market that is wholly outside Australia. Part of the present global and international air cargo market necessarily falls within the territorial boundaries of Australia. The fuel surcharge understanding necessarily affected the prices exacted from persons, including persons in Australia, in respect of the international transport of cargo by air. Mr O'Bryan relied on those paragraphs of Lindgren J's judgment to support the pleading. However, I do not think they assist. This is because they are to be read in light of the admissions to which I referred above. In my view, his Honour's observations do not stand for the proposition that it is sufficient to plead a global market, and the giving of effect to it anywhere in the world, in order to give rise to an arguable claim of contravention of s 45(2) of the Act. That was not the issue before his Honour, and the apparent breadth of his Honour's remarks at [38] seem to me to be explicable by the admissions made by Qantas: Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 at [62] . In Australian Competition and Consumer Commission v British Airways PLC [2008] FCA 1977 at [20] , Lindgren J adopted the remarks he had earlier expressed in ACCC v Qantas. However, this observation is also to be read in light of admissions made by British Airways in that case. It does not, in my view, amount to a statement of general principle which is sufficient to support the present pleading. In Emirates , the applicants, who were Emirates and Singapore Airlines, sought to challenge, inter alia , the validity of notices issued to them under s 155 of the Act. The notices sought documents and information in relation to alleged price fixing arrangements relating to international air cargo services. That phrase included international flights inbound to, and outbound from, Australia. The essential question was whether the notices were invalid on the ground alleged by Emirates and Singapore Airlines, namely that they did not relate to a market in Australia. That ground failed because the applicants were unable to eliminate any reasonable hypothesis which was inconsistent with the contention that the market was wholly outside Australia. Middleton J was of the view that on the evidence adduced before him, the market for air cargo services into Australia may be part of the international cargo market and the Australian market is, or may be, a part of that international market. It is true that this observation and his Honour's other observations at [60]---[73] support the proposition that the markets pleaded in the present case are capable of amounting to markets in Australia. But these observations do not answer the question which arises in the present application, namely whether the pleading states the material facts that support the allegation that the totality of the impugned conduct substantially lessens competition in a market in Australia. Mr O'Bryan submitted that the decision in Emirates gives rise to an issue estoppel. In my view it does not because, for the reasons stated above, Emirates did not decide the same question as that which arises in the present case: Kuligowski v Metrobus [2004] HCA 34 ; (2004) 220 CLR 363 at [21] , [40]. That proposition is somewhat at odds with the remarks of Middleton J in Emirates at [66] that the place of contracting is not determinative of the geographic location of the market. Nevertheless, his Honour did leave open at [72] the possibility that the place of contracting will have some relevance to the determination of the place where the competition takes place. However, I do not need to consider whether Middleton J's explanation of the earlier remarks of Tracey J in Auskay is correct. That is because, on the view I have reached, the pleading is defective for reasons which do not depend upon the relationship between the place of contracting and the geographic location of the market. But the function of pleadings is an important one because it is the pleading which defines the issues and presents the claim with reasonable clarity. For the reasons mentioned above, the Statement of Claim does not fulfil that function. It leaves open the fundamental nature of the ACCC's case that the conduct in question substantially lessens competition in a market in Australia. Subject to one exception, there are simply no material facts stated which demonstrate that the price fixing understandings in respect of international air freight services between destinations outside Australia have the proscribed effect on competition in a market in Australia. As Mr Archibald submitted, the key vice in the pleading is that the entirety of the conduct that occurs in respect of the making and giving effect to each of the understandings is said to involve a contravention. It is the breadth and generality of that allegation, without material facts to support it, which constitutes the real defect. Nevertheless, I do not consider the defect to be incurable. The recent decisions to which I have referred show that it may well be possible for the ACCC to cure the defects. This is particularly so in the light of the remarks of Middleton J in Emirates because his Honour specifically endorsed the proposition that price fixing between two international points in relation to the supply of international air cargo services, wherever engaged in, may have the proscribed effect on competition in a market in Australia. I therefore propose to grant leave to the ACCC to replead within a period to be agreed between the parties. This is because it relates to prices charged for the supply of air freight services for the transport of meat on outbound services from Australia to the Middle East. Order 1 does not apply to the allegations contained in [430]---[432] of the Statement of Claim. The applicant be granted leave to file an amended Statement of Claim within a period of 28 days or such longer period as may be agreed between the parties. The applicant (the ACCC) pay the costs of this motion. I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application to strike out statement of claim whether statement of claim discloses reasonable cause of action whether statement of claim fails to identify a market in australian within the meaning of s 4e of the trade practices act 1974 (cth) whether statement of claim fails to plead material facts and alleges contraventions with such generality that they cannot amount to contraventions of the trade practices act global market is capable of constituting a market in australia market in australia within the meaning of the trade practices act sufficiently identified in pleading pleadings failed to establish how alleged understandings have the proscribed effect on competition in a market in australia failure to state material facts statement of claim struck out. trade practices |
The applicant, namely Bahtabah Local Aboriginal Land Council ('the Land Council') by its 'non-claimant' application, seeks a declaration that no native title exists in relation to the Land. The term 'non-claimant' application is used to describe those applications by a party who seeks to have a determination made by the Court that the land in question is not subject to any native title interest. The application is supported by the affidavit of Barbara Guthrie sworn 7 November 2006 and Michael Green sworn 1 November 2006. 2 On 10 February 2005 the Land was transferred to the Land Council, as an estate in fee simple subject to any native title rights and interests in relation to the land immediately before the transfer, pursuant to s 36 of the Aboriginal Land Rights Act 1983 (NSW) ('the Land Rights Act'). Pursuant to s 61(1) of the Act the Land Council may make application as a non- native title interest holder for a declaration of native title. 3 A title search of the Land conducted by the legal representatives of the applicant on 3 May 2006 records that title was subject to restrictions on dealings under ss 40 and 40AA of the Land Rights Act. Section 40 imposes restrictions upon the disposition of any interest in land vested in the New South Wales or a Local Aboriginal Land Council except in accordance with Division 4A Part 2 of the Land Rights Act. Section 40AA of the Land Rights Act provides that the Land Council may not sell, exchange, lease, dispose of, mortgage or otherwise deal with land vested in it unless it is the subject of ' an approved determination of native title' . 4 An application may be made to this Court under Part 3 of the Act for a determination of native title in relation to an area for which there is no approved determination of native title (s 13(1)(a) of the Act). A determination made on such an application will constitute an ' approved determination of native title ' (see s 13(3)(a) of the Act). 5 Section 66 of the Act provides the requirements for notification of the application. Section 66(2) and s 66(2A) of the Act require the Native Title Registrar ('the Registrar') to provide the relevant State or Territory Minister and representative bodies a copy of the application and related documents. Section 66 (3) of the Act requires the Registrar to give notice containing details of the application to certain bodies and persons and to notify the public. Such notice must specify a notification day (s 66(8)) and comply with the other requirements of s 66(10) of the Act in relation to the content of the notice. New South Wales Native Title Services ('Native Title Services') notified the Court of its intention to become a party to the application on 6 July 2006 and was joined as a respondent on 3 October 2006. The Court is thus satisfied that notice requirements under s 66(2) and s 66(2A) of the Act have been complied with. 7 A letter dated 14 June 2006 from the National Native Title Tribunal ('the NNTT') addressed to the Land Council is annexed to the affidavit of Barbara Guthrie. This letter establishes that the application was notified in three newspapers namely the Sydney Morning Herald and the Koori Mail on 21 June 2006 and the Lake Macquarie News on 22 June 2006. The notification day is stated in such notices as 5 July 2006. The notification period of 5 July 2006 to 4 October 2006 outlined in this letter complies with the requirements of notice in s 66(10) of the Act. A letter on the Court file dated 20 June 2006 from the NNTT describes the measures undertaken by the Registrar to comply with the requirements of s 66(3) and the Court is satisfied that the notice required by s 66(3) of the Act has been given. 8 The evidence of Ms Guthrie also establishes that Native Title Services conducted a search of the NNTT Register and found no record of any native title claim therein in respect of the Land. 9 A notice pursuant to s 86G of the Act was filed by Native Title Services on 24 November 2006 informing the Court that it does not oppose the determination sought by the Land Council that native title does not exist with respect to the Land. 10 The Court is satisfied upon the affidavit evidence that the Land Council is the holder of a non-native title interest in the Land and is entitled to bring the non-claimant application under s 61(1) of the Act. The Court has jurisdiction to make a determination under s 61 of the Act that native title does not exist in relation to the Land provided no prior determination of native title has been made (see ss 81, 225 and 13(1)(a) of the Act). There is no evidence before the Court of any native title rights or interests in the Land. 11 Accordingly the Court will allow the application and make the order that no native title exists in relation to the Land. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | non-claimant application unopposed no native title exists in relation to the land native title |
The first respondent Telstar Finance Company (Q) Pty Ltd (Telstar) is a Brisbane based finance company. The second respondent Mr Paul Cunningham is a director of Telstar. Mr Coggin provided (to use a neutral term) the vessel as security for an advance by Telstar which was to be used for the acquisition of a franchise for the sale in Victoria of a device known as "Easy Drink", a plastic lid which fits over the top of opened drink cans. The nature of Mr Coggin's involvement in this venture is a little unclear, but the moving force was Mr Jozsef (Joe) Nagy, the de facto husband of one of Mr Coggin's daughters, and a colleague of his, Mr Walter (Wally) Pavia . 2 Telstar claims that Mr Coggin sold the vessel to it. Mr Coggin claims he only intended to provide the vessel as collateral. Subsequently Telstar resold the vessel at what Mr Coggin says was a gross undervalue. There is a balance of some $15,000 remaining, even after deducting the monies loaned by Telstar with interest at its stipulated rate of ten per cent per month . It is common ground that Telstar has not accounted to Mr Coggin for that balance. 3 Mr Coggin seeks an order setting aside the whole transaction as unconscionable within the meaning of s 51AC of the Trade Practices Act 1974 (Cth) (the Act) and recovery of the amount of his loss and damage under s 82. He was educated to fifth form standard in the United Kingdom and completed adult matriculation in Australia. His working life has been as a seaman and as a chef, including owning and managing some restaurants. He retired at age 58 following an accident on an oil rig where he was working as chief cook. On his retirement he had superannuation entitlements and a compensation payment. Soon after that he separated from his wife. About two years earlier he had purchased the vessel for about $90,000 and spent some $60,000 on renovating and improving her. Mr Coggin had insured the vessel for $150,000 and had a valuation dated 30 September 1999 from Petit & Carlson Pty Ltd "for insurance purposes only" for $210,000. 6 Mr Coggin had leased the vessel for $4,000 per month to a Mr Michael Banner-Smith. Mr Banner-Smith defaulted on the payments and Mr Coggin was anxious to locate and recover the vessel. 7 Mr Nagy, who was living in Victoria, volunteered to come to Brisbane and help Mr Coggin recover the vessel. He arrived in Brisbane on about 15 or 16 December 1999. A few days later he introduced Mr Coggin to Mr Pavia. Mr Nagy and Mr Pavia had known each other for about 15 years. They had worked together selling cookware door to door. 8 Mr Nagy and Mr Pavia located the vessel at Mooloolaba. They took Mr Coggin to where she was situated and arranged for a skipper to sail her to Brisbane. The vessel was then moored at a private mooring which happened to be owned by Mr Cunningham at the rear of his house at Hill End. The vessel arrived at Mr Cunningham's mooring in the early hours of the morning. Mr Nagy borrowed $400 from Mr Cunningham to pay the skipper. Mr Nagy says in his witness statement that about two to three days earlier he had "flagged to Paul Cunningham in a conversation with him what were the intentions of David Coggin and (him)self with respect to the Easy Drink franchise and the raising of money". He was bitten by a spider on the right lower leg. The leg swelled rapidly and he went into tremors, hallucinations and a coma. He was kept to his room for about three days until he was able to get himself to the Royal Brisbane Hospital. He declined admission and was injected with antibiotics and given a course of medication. He contacted Mr Pavia and they visited the owner of the Easy Drink business, Mr Michael Delanoir, at his office in Brisbane. Shortly thereafter Mr Nagy and Mr Pavia market tested the product in northern New South Wales. This proved to be successful and, as Mr Pavia says in his witness statement, they "were both convinced, because of the sales success (10 calls and 8 concept and product sales), of the ezy drink [sic] concept and product to pursue the purchase of a distributorship". 11 Mr Nagy returned to Melbourne. He phoned Mr Pavia and told him he had agreed to buy the Victorian distributorship from Mr Delanoir for $65,000 but did not have the money. He told Mr Pavia that he had spoken to his partner's father, Mr Coggin, who had a boat worth $210,000 he was "willing to put up for a loan". Mr Nagy said the boat was currently leased to a Mr Banner-Smith who was not paying the rent and that Mr Coggin wanted to repossess her. 12 According to Mr Pavia, Mr Nagy asked him if he could help to arrange finance "for him and David Coggin". Mr Pavia agreed, provided he received a fee of $5000 on finalisation. Mr Nagy and Mr Pavia made two unsuccessful approaches for finance, one to Mr Peter Groot, a finance broker, and the other to Mr David Napier, a financier. Mr Groot demanded $1000 up front, which Mr Nagy borrowed from a friend. They said that they had trialled sales and "had already sold 20,000 to 30,000 of them in Victoria". Mr Nagy said he wanted to buy the rights to sell the lids in Victoria. These rights were on offer until a certain date. He then intended to break up the Victorian franchise into territories and sell them off, retaining some for himself. He said that he needed Mr Coggin's help to get the money. He said there was a set price but that he had to bargain the price down. 14 Mr Coggin was grateful to Mr Nagy for helping him to retrieve the Lady Christina so was prepared to help. Mr Nagy asked Mr Coggin if he could offer the vessel as collateral for a loan to buy the Easy Drink rights. He suggested that he would be able to sell the territories for at least $200,000. He showed Mr Coggin some projections for Easy Drink showing a gross profit for a year of $248,200. He also showed Mr Coggin a draft contract between Easy Drink and Mr Nagy for the purchase of the Victorian rights for $60,000. It provided for settlement in full on 15 December 1999 and bears the signature of Mr Delanoir, but is otherwise unsigned. 15 Mr Coggin believed the proposition was reasonable and told Mr Nagy that he was prepared to help. He told Mr Nagy that he would put up the vessel as collateral as long as he ensured that the money was repaid and that he would get the vessel back rapidly. Mr Coggin told Mr Nagy however that he wanted the transaction to be in his name, or alternatively in his daughter's name, until such time as he got the vessel back. 16 Mr Nagy and Mr Pavia moved Mr Coggin to a motel and looked after him. They later took him to an apartment of Mr Pavia's in Brisbane. Mr Coggin continued to have constant pain and inflammation with the spider bite. He felt "dull-minded" and not "with it" at all. About this time Mr Delanoir came to the apartment and met Mr Coggin. 17 Mr Coggin helped Mr Nagy by providing his financial details for the application to Mr Napier for assistance in the purchase. Mr Coggin was later told by Mr Nagy that this application was unsuccessful. 18 Mr Coggin's version has his involvement with Easy Drink not commencing until after Mr Nagy arrived in Brisbane to recover the Lady Christina . On Mr Nagy's version, this happened earlier, while he was still in Victoria, and Mr Nagy told Mr Pavia by phone from Melbourne that Mr Coggin was willing to provide security. Perhaps in the final analysis the question is not critical, although I am inclined to prefer Mr Coggin's version. He had been living in Brisbane for some time and it seems unlikely that the initial discussions between he and Mr Nagy took place over the telephone. Certainly Mr Nagy does not suggest this. 19 One feature of Mr Nagy's version is that he has Mr Coggin "propos(ing)" that he and Mr Nagy becoming joint owners of the Victorian distributorship. Mr Coggin is the initiator. Mr Nagy says that "David Coggin was keen to pursue the Easy Drink franchise with me for Victoria and to this end I travelled to Redcliffe Queensland where he had information that his boat was being moored". The role of Mr Pavia is downplayed. His earlier involvement in the trial marketing in New South Wales is ignored. Yet as will be seen, what was presented to Telstar was essentially a joint proposal from Nagy and Pavia. She says that on about 23 December 1999 Mr Lindsay Gray of Telstar telephoned her to discuss insurance of the vessel Lady Christina . He said the owner Mr Coggin had taken the vessel back from Mr Banner-Smith due to non-payment of lease payments. Mr Gray said that Telstar was going to loan Mr Coggin $65,000 for a business venture for a Mr Joe Nagy, who was the son-in-law of Mr Coggin, for a term of three to six months and the vessel was to be collateral. It was to be moored at the back of a private dwelling in West (sic) End until satisfaction of the loan. Mr Coggin would have no access to the vessel or interest in the maintenance of her. 21 Mr Gray told Mrs McIlwee that he had already spoken to Michaele of Sunderland Marine who had told him that that firm would automatically cancel the policy because of the change of management and that it was very unlikely that Sunderland would be interested in insuring it under the new arrangement. Michaele had referred Mr Gray to Seamac, who were the current brokers. 22 Mrs McIlwee told Mr Gray that this was an unusual arrangement and she doubted if any insurer would be interested but she would try to obtain alternative cover. She rang Michaele who confirmed that Sunderland Marine would not insure. Club Marine and HIH also declined. Mrs McIlwee telephoned Mr Gray back and told him that she could not arrange insurance due to the nature of the arrangement. He asked whether it would be easier if the vessel was "bought" by Telstar. He conveyed to Mrs McIlwee the idea that the "sale" would be for the sole purpose of obtaining insurance. Mrs McIlwee said that it would have been easier but now, knowing the circumstances, she would have to disclose them to any prospective insurer. Mr Gray also suggested that, if Telstar were to buy the vessel, while the directors were Mr and Mrs Cunningham he did not want to involve them and that he (Gray) would sign the paperwork as he was a signatory for the company. 23 The "sale" price was suggested to be $65,000, which was the amount of the loan only, but Mrs McIlwee knew through her involvement in the marine industry that this would not represent the market value of the vessel. She knew of a client who would have been interested in purchasing the vessel for a higher price. There had been a survey valuation in September of $210,000 and she understood the vessel had undergone a major work program. I suggested that Gray contact other insurance brokers. She told him she believed Telstar may be making decisions with his son-in-law about the vessel that he was unaware of and that if he had to sell, a potential buyer, Seth Parker, would be interested at a better price than $65,000. She says that Mr Coggin was "aghast", he had no intention of selling the vessel to them and it was only to be used as collateral for a loan for his son-in-law. 25 Mr Gray flatly denies these conversations with Mrs McIlwee. He says he was out of Australia on holiday and only arrived back at work on 24 December 1999 at about 10 am. Mr Cunningham denies that he spoke to Mrs McIlwee at this time or that he asked anyone at Telstar to speak to her or anyone else at Seamac. I am, however, quite satisfied that the conversations took place in the way Mrs McIlwee says. Mr Gray produced no corroborating detail by way of passport entries or travel documents. Mrs McIlwee was an independent and convincing witness. Her evidence is solidly corroborated by telephone accounts, a contemporaneous handwritten note and a fax she sent to Sunderland Marine on 31 January 2000 referring in detail to the conversations with Mr Gray. When Mr Coggin asked them to clarify what he had to do they said that they had made arrangements, that the papers were being set up and he had to go and sign them. They said that he owed money for the mooring of the vessel and that he needed to do something to resolve this. They took Mr Coggin to the office of Telstar. As Mr Coggin now knows, Telstar is the financial arm of an organisation called Dine-Rite which sells cookware to housewives. 27 Initially Mr Coggin sat in the reception area with his affected leg propped on a stool. Mr Nagy and Mr Pavia went into the office. At one stage Mr Delanoir came into the building and said hello to Mr Coggin. 28 In the meantime Messrs Cunningham, Nagy and Pavia had reached an agreement; see [37] below. 29 After a while Messrs Nagy, Pavia and Delanoir came out to the waiting room. They introduced Mr Coggin to Mr Cunningham who in turn said that Mr Gray would do the paperwork. Messrs Nagy, Delanoir, Cunningham and Pavia said that they were going to the pub for lunch while Gray did the paperwork. Mr Coggin went into the office with Mr Gray. While they were there Mr Cunningham phoned Mr Gray a number of times enquiring as to progress. He said that the vessel was just to be collateral. As it was Christmas Eve, there was a lot of concern about the banks closing. His understanding was that the money to be secured was $65,000, but that it was to be paid in two payments, initially $35,000, with a further $30,000 to be advanced by Telstar, "if we needed it", after a month. On the understanding that the boat was being put up as collateral, he signed the two documents. Mr Cunningham's signature was not on them at the time. Mr Coggin went with Mr Gray to a government department to check the title details and then returned to Telstar's office. 33 Mr Gray contacted Mr Nagy and Mr Pavia and arranged to meet them at a branch of the National Australia Bank. Mr Gray drove Mr Coggin to the bank and there met Messrs Nagy, Pavia and Delanoir. They went into the Manager's office and received a Telstar cheque for $30,000 payable to Mr Coggin which he endorsed to the credit of Mr Delanoir. It appears that $5,000 in cash was paid to Mr Nagy and Mr Pavia. 34 Mr Pavia and Mr Coggin then went to Mr Cunningham's house, dropping Mr Nagy off along the way. Mr Coggin showed Mr Cunningham how to moor the boat, how to start the motor to pump out the bilge regularly and showed him what general maintenance was needed. (It will be recalled that, on Mr Nagy's version, this matter was "flagged" with Mr Cunningham much earlier, some two to three days prior to the recovery of the Lady Christina --- see [8] above. ) Mr Cunningham responded that that he was not interested. Mr Nagy persisted. Mr Cunningham said that he didn't know anything about boats and it was outside his usual finance operations. (Although at least Mr Cunningham owned a mooring. ) Mr Nagy continued to try and convince Mr Cunningham that the Easy Drink distributorship was a good business opportunity, but Mr Cunningham was not convinced and eventually Mr Nagy left his office. 36 After the Nagy meeting, Mr Pavia came to Mr Cunningham's office. Mr Pavia pleaded to Mr Cunningham to "give him (Pavia) a break". He assured Mr Cunningham that he "was prepared to go to Melbourne to make it work". Mr Cunningham says that after some considerable time he was "persuaded by Wally Pavia to enter into the transaction". 38 The foregoing discussions between Messrs Cunningham, Nagy and Pavia occurred before those between Messrs Coggin and Gray at which the former signed the two agreements already referred to ([30] and [31] above). 39 Mr Cunningham says that Mr Coggin came into the boardroom and he (Cunningham) went through with Mr Coggin in detail the agreement recorded in the note. According to Mr Cunningham, Mr Coggin said he was happy with the arrangement but he wanted the distributorship to be in his name only, and not to include Mr Nagy. Mr Cunningham says he was happy to comply with this because he knew Mr Nagy would be working in the business in any event. While I find Mr Coggin did at some stage request the business to be in his name, primarily for the protection of his daughter, I do not accept his assent to the transaction was obtained in the way Mr Cunningham says. 41 It provided that Telstar would pay $60,000 for the exclusive right to distribute Easy Drink lids to identified customers in Victoria. There were seven categories of customers such as service stations and convenience stores, but specifically excluded were "National Fast Food Outlets". Price of the lids was to be 22 cents per unit. Sales to retailers were recommended at 50 cents, the retail price to be $1. A non-refundable deposit of $30,000 was to be paid on 22 December 1999 with 60,000 lids delivered and the balance of $30,000 to be paid on 25 January 2000 with a further 60,000 lids delivered. On 10 January 2000 Mr Nagy called him to say that he had sold a territory and received a substantial deposit. He called at the house where Mr Coggin was living with his ex-wife and took him to a nearby hotel (Mrs Coggin did not like Mr Nagy to come to her house). Mr Nagy showed Mr Coggin money he said he had received from the sale of the territory. They returned to the house and in the driveway Mr Nagy produced a piece of paper which Mr Coggin signed. Mr Nagy told him that it was a document establishing that he (Mr Nagy) had the right to sell the territory on Mr Coggin's behalf. Mr Coggin signed the document. At this time Mr Coggin's parents were seriously ill and the previous day he had been advised that his father was about to die. He was extremely distressed about this. 43 The document is dated 10 January 2000. It is headed "Contract of Sale for Dealerships". It is between Telstar (the name is misspelt) and David Coggin. It provided that Mr Coggin would pay $60,000 for the exclusive right to distribute Easy Drink lids to identified customers. The customer categories are the same as those in the Easy Drink --- Telstar agreement. The price per lid payable to Telstar is 25 cents. 44 Mr Coggin was not aware of the Easy Drink --- Telstar agreement until much later. He was not aware that Telstar was to make a profit of 3 cents per lid. 45 Mr Nagy in his evidence produced another agreement dated 24 December 1999 between Easy Drink and Telstar in which it was agreed that Telstar could distribute to Red Rooster Fast Food stores in Victoria, the price per unit from Easy Drink to be 30 cents, price to Red Rooster 50 cents and retail $1. Mr Coggin was not aware at the time of this special arrangement. Nor was he aware of the arrangement recorded in Mr Cunningham's note of 24 December that Telstar would receive 10 per cent of the price of sub-distributorships sold in Victoria. Then in about early February he approached Ms Carole Hildebrand, a solicitor who knew both Mr Nagy and himself. He asked her to find out what was going on. She prepared a letter for him to deliver to Mr Nagy asking for resolution of the matter. He also contacted Mr Gray who sent down a full copy of the agreement of 10 January. When he originally had been asked to sign it Mr Nagy only had the second page of the agreement, which contained the signature. Seeing the whole agreement alerted Mr Coggin to the fact that Telstar was nominated as the seller of the distributorship to him, a fact which worried him. 47 Shortly afterwards Mr Nagy contacted him and said that Mr Cunningham would be in Melbourne on 9 February. On that day Mr Nagy collected Mr Coggin and took him to meet Mr Cunningham at a hotel in South Yarra. Paul Cunningham will sell the boat and whatever monies over & above the following. Paul Cunningham will send the 60,000 lids to Dave Coggin. Please send goods by K & S Freighters C.O.D. 49 Mr Coggin was desperate to redeem the Lady Christina . They discussed the possibility that Nagy could sell the business for in excess of $80,000 and Mr Coggin would then be able to payout the entire loan and reclaim the vessel. The total cost was $1,589.05. Telstar's claim is that the amount due under the loan, together with interest at ten per cent per month by the time the vessel was sold was $79,650 plus a brokerage fee of $500. In his witness statement Mr Coggin says that no accounting has been made to him for any of the proceeds. Mr Coggin, soon after the agreement of 9 February 2000, disputed the arrangements. I accordingly did not think that he regarded himself as bound by the agreement and I thought the dispute would escalate, and that any payment to Mr Coggin would not serve any useful purpose. On 27 February 2000 Mr Coggin took approximately 30,000 lids from Mr Nagy and stored them at his ex-wife's house. Some time after February Mr Nagy took the lids back. According to Mr Coggin, Mr Nagy broke the lock and took the lids away. 53 A further shipment of 60,000 lids was sent from Telstar to Mr Coggin. As far as the evidence shows, these lids are still at K & S Transport's depot. 54 Mr Nagy advertised for sub-distributors but without success. The issue is whether such conduct was, in all the circumstances, unconscionable: s 51AC(1)(b). 56 Section 51AC(4) provides some 13 factors which the Court "may have regard to" in determining whether the conduct in question was unconscionable. The statute stresses that this list is not exhaustive. The Court may have regard to these factors, or some of them, "(w)ithout in any way limiting" regard to other matters. 57 The notion of unconscionability in s 51AC is wider than that of "unconscionable within the meaning of the unwritten law...of the States and Territories" in s 51AA: Australian Competition and Consumer Commission v Simply No-Knead (Franchising) Pty Ltd [2000] FCA 1365 ; (2000) 104 FCR 253 at [37] (Sundberg J), Australian Competition and Consumer Commission v 4WD Systems Pty Ltd (2003) 59 IPR 435 at [183] (Selway J). Whatever " unconscionable " means in sections 51AB and 51AC , the term carries the meaning given by the Shorter Oxford English Dictionary, namely, actions showing no regard for conscience , or that are irreconcilable with what is right or reasonable - Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 262. The various synonyms used in relation to the term " unconscionable " import a pejorative moral judgment - Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 283-4 and 298. Nothing could be further from the truth. The reality is that Mr Nagy and Mr Pavia were old comrades in arms from their door to door cookware selling days. And they were sufficiently familiar with Mr Cunningham to wake him up in the early hours of the morning, moor the Lady Christina at his private mooring (no doubt by prior arrangement), and borrow $400 from him to pay the skipper. Messrs Nagy, Pavia and Cunningham at all times worked together in pursuit of their own interests, and against the interests of Mr Coggin. This is most strikingly demonstrated by their exclusion of Mr Coggin from the meeting on 24 December 1999 at which they made the agreement recorded in Mr Cunningham's note ([37] above). They saw the only role of Mr Coggin as being "Joe's Father" who was to provide a boat as collateral for their venture. This is consistent with what Mr Gray told Mrs McIlwee, that Telstar was to make a loan Mr Coggin "for a business venture for Joe Nagy who is the son-in-law of Mr Coggin". 60 Mr Cunningham was the director of a finance company which usually did not lend on secured transactions, let alone maritime ones. Nor, as far as the evidence reveals, did this Brisbane finance company engage in wholesaling of goods in other States. As the respondents' counsel submitted, "this type of transaction was not common for Telstar". 61 The respondents saw the opportunity presented by the serendipitous combination of Messrs Nagy and Pavia's business plans and the availability of Mr Coggin's vessel as too good to miss. I am not at all persuaded that Mr Cunningham was a reluctant participant who succumbed only after persistent supplication by Mr Pavia on the morning of 24 December. The previous day Mr Cunningham had been trying, through Mr Gray, to arrange insurance --- an indication that Telstar was already committed to the project. Also on Mr Pavia's version, Mr Cunningham agreed to the idea, without any persuasion, a week before Christmas Eve. 62 The driving forces in the whole project for the acquisition of the Victorian Easy Drink franchise were Mr Nagy and Mr Pavia but Mr Cunningham was a willing participant. 63 Like the certain man who went down from Jerusalem to Jericho (Luke 10.25-30), Mr Coggin fell among men who were, if not thieves in the legal sense, totally opportunistic in the advantage they took of him. To their knowledge, Mr Coggin not only happened to be the owner of an asset which could provide collateral to get finance which seemed otherwise unobtainable, he had filial motives for assisting his daughter and her family. 64 Mr Coggin was suffering from the ill effects of the spider bite and this affected his capacity to make rational business judgments. However this was a relatively minor feature in the circumstances. He provided a vessel which, as far as the respondents knew, had a value in excess of $200,000 as security for a loan of $65,000. Yet he was charged a truly extortionate rate of interest of 10 per cent per month. 66 Consistent with their opportunistic approach, the respondents took for themselves secret profits in the form of 3 cents per lid, a right to Red Rooster sales and ten per cent on the sale of sub-franchises, all in connection with a business which seems far removed from that of a Brisbane finance company. 67 The respondents changed the transaction from mortgage to sale to meet the insurance difficulty they encountered after Mr Gray spoke to Mrs McIlwee. Mr Coggin, although outnumbered and without any independent legal or business advice (a circumstance of which the respondents were well aware), was sufficiently aware to what was going on to protest at the first agreement Mr Gray proffered to him on 24 December. Hence the second agreement. This was in fact no better than a sale with an option to repurchase, a transaction still quite inadequate from Mr Coggin's point of view since it put the onus on him to repurchase and did not impose any obligation on Telstar, if it resold, to account for any balance. (Whether the second agreement of 24 December 1999 or the agreement of 9 February 2000 was in truth an option to re-purchase is not clear. However, the case put to this Court by the respondents throughout the hearing was that there was a sale to Telstar by Mr Coggin and he only had an option to repurchase. He did the best he could, albeit ineffectively, to achieve this. It also rebuts the version of a number of the respondents' witnesses to the effect that on the 24 th Mr Coggin had everything fully explained to him and went along without demur. 69 A particularly telling piece of evidence is that provided by Mr Cunningham, quoted at [51] above. This was in his own statement, not extracted under cross-examination. As already noted, on the respondents' case what happened was a straight sale, with at best an option for Mr Coggin to repurchase. There has been no suggestion that he exercised any such option. Accordingly, on the case it presented to this Court, Telstar had no obligation at all to account for anything. I suspect that Mr Cunningham could not quite bring himself to acknowledge the full implications of the conduct he was trying to defend. 70 I find that the conduct of Telstar was unconscionable within the meaning of s 51AC. He was directly and knowingly concerned in the company's contravention: s 75B(1)(c). 72 It is not necessary for Mr Coggin to show that, at the time, Mr Cunningham personally characterised or recognised the facts constituting the contravention as unconscionable. 73 Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 was a s 46 case where, amongst other issues, individuals were sought to be made liable as persons involved in the contraventions. It was argued that the individuals did not know that their principal's conduct was engaged in for the purpose, or had the likely effect, of substantially lessening competition in the market as defined. Only a handful of lawyers think or speak in that fashion, and then only at a late stage of analysis of any particular problem. In order to know the essential facts, and thus satisfy s 75B(1) of the Act and like provisions, it is not necessary to know that those facts are capable of characterisation in the language of the statute. However, Yorke v Lucas , in applying criminal law principles to accessorial liability under the Act, proceeded on the basis that to form the requisite intent for aiding and abetting a crime, the defendant "must have knowledge of the essential matters which go to make up the offence whether or not he knows that those matters amount to a crime" (at 667). Since, as already noted, the assessment of conduct as unconscionable or not under s 51AC may involve the consideration and weighting of 13 statutory criteria, and an infinite number of other criteria which appear relevant to the judge, it would be quite unworkable to suppose that there could be no finding of accessorial liability unless the individual, at the time of the contravention, considered the same factors, and gave them the same weight, as did the judge at the subsequent trial. Apart from anything else, the morally obtuse would have an undeserved advantage. The appropriate relief is the recovery of the amount of loss or damage: s 82(1). 75 The principal element is the value of the vessel as at the end of 1999, this being the time Mr Coggin lost control of her. There is no doubt that there was sufficient causal relationship between the unconscionable conduct and the loss in the "common law practical or common-law sense": Wardley v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525. 76 I do not think Telstar should be given credit for the monies it advanced. It has not filed a cross-claim. Telstar, through Mr Cunningham, was intimately involved in the way Mr Coggin was drawn into the whole transaction, including the Easy Drink dealership acquisition. Telstar's conduct was seriously unconscionable. It would not be fair to allow it to unpick the transaction and reconstruct something acceptable. Mr Coggin should be put back in the position he was before he encountered the respondents. 77 A claim was also made for loss of rental. This is not so clear, since the availability of solvent lessees at the time is problematic. A better measure is to allow interest on the value of the vessel to date. Counsel agreed that an appropriate rate was ten per cent per annum (not per month). 78 As to the value of the vessel, Mr John Carlson, an experienced marine surveyor, gave evidence for Mr Coggin to support his valuation of $210,000 as at 30 September 1999. Mr Carlson accepted that this was for insurance purposes, which effectively means replacement value so that, in his words "if there is a problem with the vessel, the owner is not put at a disadvantage". 79 On the other hand, a valuation for finance purposes, which contemplates the possibility of a fire sale environment, would be unfair to Mr Coggin. Rather I think the proper measure is market value or current price: Spencer v The Commonwealth [1907] HCA 70 ; (1907) 5 CLR 418 at 431. 80 On behalf of the respondents Mr Nicholas Lockyer, another experienced marine surveyor, valued the vessel on a fair market value, as is where is basis, as at 24 December 1999 at $82,000. Mr Lockyer gave his opinion for the purposes of this case and had not inspected the vessel. 82 That being so, I think the best evidence of value was the price in fact achieved, namely $95,000. Despite counsel's criticism, I conclude that Telstar took reasonable steps to sell the vessel by placing her with a number of brokers. There is nothing to suggest that the sale which in fact took place was other than at arms' length. The sale was effected after some negotiation and an increase of the buyers' offer. 83 There should be a deduction for repairs carried out on Telstar's instructions amounting to $1589.05, but not for a further sum of $500 which seems to have been a gratuity to Mr Cunningham's secretary. 84 In January 2001 solicitors on behalf of a company called Forgacs Engineering Pty Ltd wrote to Telstar's solicitors alleging that the vessel had been mortgaged to Forgacs in 1998 and that $14,698.39 was owing under the mortgage. Telstar's solicitors replied saying that it were unaware of the debt and that the vessel had been represented by Mr Coggin to be unencumbered. It does not appear that Forgacs pursued the matter any further against Telstar or Mr Coggin. This matter need not be considered further. 86 There will be an order that the respondents pay Mr Coggin's costs including reserved costs. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | unconscionable conduct trade practices act s 51ac applicant persuaded to use fishing boat as collateral for loan from first respondent to finance purchase of a business by de facto son-in-law applicant signs contracts for sale and option to repurchase applicant's judgment affected by spider bite and desire to help daughter and son-in-law lack of independent legal and business advice excessive interest on loan first respondent takes a transfer of business from vendor and onsells to applicant with undisclosed profit loan commitments not met first respondent sell applicant's boat balance of proceeds from sale not paid to applicant requirements of unconscionable conduct under s 51ac whether second respondent liable as a person directly and knowingly involved in contravention trade practices |
Finance, the internal financier to the BHPB Group, financed projects approved by the board of directors of BHPB both initially and on an on-going basis, including projects constructed and operated by BHPDRI and BHPTM. In the 2000 year, two projects partly financed by Finance --- the HBI plant for which BHPDRI was responsible and the Beenup Project for which BHPTM was responsible --- had not been successful. Finance wrote off as bad part of the debt owed by BHPDRI and part of the debt owed by BHPTM. The amounts written off by Finance in the 2000 year were: $1,845,833,281.34, of a total debt of $2,191,833,281, due to it by BHPDRI. (There is a discrepancy of $0.34 which may be put to one side); and $310,881,702.40, of a total debt of $339,216,146.22, due to it by BHPTM. It is the writing off by Finance of these parts of the two debts (the BHPDRI loan and the BHPTM loan) in the 2000 year which is in issue in these proceedings. Two consequential steps for tax purposes were taken. First, Finance claimed as a deduction the amount written off pursuant to s 25-35 of the 1997 Act. Secondly, BHPB applied the debt forgiveness provisions to those write offs (Div 245 in Schedule 2C of the 1936 Act) but not the provisions concerning limited recourse debt in Div 243 of the 1997 Act. B. The central question is whether Finance was in the business of lending money and, if so, whether each loan was made by Finance in the course of that business. The central question is whether the BHPDRI loan was limited recourse debt for the purposes of Div 243; finally, if BHPB and Finance were unsuccessful in whole or in part in these proceedings, the question of the additional tax imposed by the Commissioner. For the detailed reasons that follow, I consider that: Finance was entitled to an allowable deduction in respect of each part of the debt written off as bad pursuant to s 25-35(1)(b) in the 2000 year. Finance was in the business of lending money and each loan was made by Finance in the course of that business. However, Pt IVA did not apply to otherwise disallow the allowable deduction in respect of the amount of the BHPTM loan written off as bad pursuant to s 25-35(1)(b); in the BHPB Proceedings, Div 243 and Pt 3-90 of the 1997 Act did not apply to disallow capital allowance deductions claimed by BHPB as head entity of a tax consolidated group in respect of assets of BHPDRI. The BHPDRI loan was not limited recourse debt for the purposes of Div 243; in light of my earlier findings, the question of additional tax does not arise. However, if I am wrong in any of the conclusions I have reached, I would have remitted a substantial part of the additional tax imposed by the Commissioner. The position adopted by BHPB and Finance was reasonably arguable. Their evidence in relation to these matters was not the subject of challenge. In the 1990's, the period with which these proceedings are primarily concerned, the BHPB Group's principal areas of business were: the minerals group which undertook minerals exploration, production and processing principally of coal, copper, iron ore and manganese ore; the petroleum group which undertook hydrocarbon exploration, production and refining; and the steel group which undertook steel production and group corporate services. The BHPB Group's corporate services group provided transactional services to other members of the BHPB Group including in the areas of finance, treasury and accounting, human resources and supply and procurement. Finance, the applicant in VID 788 of 2006, formed part of the treasury section of the corporate services group. Its Memorandum of Association records one of its objects is "to carry on the business of financier in all its branches both within and outside Australia". From September 1985, Finance was registered as a financial institution and a short term money market dealer / operator for the purposes of the Financial Institutions Duty Act 1982 (Vic) and s 98I of the Stamp Duties Act 1920 (NSW) [repealed by the State Revenue Legislation Amendment Act 2008 (NSW)]. By the early 1980's, Finance had commenced raising finance from external lenders. From the early 1990's, virtually all external borrowings of the BHPB Group to fund activities and projects of the BHPB Group were undertaken by Finance. Centralisation of the financing activities of the BHPB Group within Finance provided, what were described as, numerous "administrative and corporate efficiencies" including ensuring that lenders and financiers dealt with one entity whose business could be readily understood by the finance community, centralisation of the foreign exchange operations of the BHPB Group for better monitoring and control of the group's total foreign exchange exposure and hedging activities (with foreign exchange gains and losses being treated on revenue account) and enhanced transparency of the BHPB Group's financial results by separating financing activities from operations. As the principal financier, Finance raised money from financial institutions outside the BHPB Group by way of loan facilities, the issue of commercial paper and medium term notes. Each year, the BHPB board set the borrowing limits and the borrowing program to be carried out by Finance for the next 12 months. That program stipulated the proportions of short and long term debt, the mix of fixed and floating interest rate debt and the mix of currencies in which funds were to be borrowed. For example, for the financial year ended 31 May 1996, the BHPB board granted approval for loan and other financing facilities in the name of Finance (or any other wholly owned subsidiary) for an amount not exceeding $2,275 million. A committee of the board, consisting of two or more of the Managing Director, the Executive General Manager Finance and the Corporate Treasurer was appointed for the purposes of, inter alia, "[a]pproving, executing, delivering and performing all terms and conditions and documentation of loan and other financing facilities to be arranged by [Finance] or any other wholly owned subsidiary up to a total of $2,275 million and all terms and conditions and documentation of guarantees to be issued by [BHPB] in respect of these facilities". Consistent with the annual resolutions of the board of BHPB, over the relevant period Finance raised large sums of money from a variety of sources: From banks and financiers outside of the BHPB Group by way of medium to long term facilities and by way of short to medium term facilities. Samples of some of the agreements entered into by, and information memoranda issued by, Finance were tendered in evidence. In respect of each loan agreement in evidence, Finance was the borrower with its obligations guaranteed by BHPB. It was also the issuer of the information memoranda (guaranteed by BHPB) and it was the contracting party to the Master Swap agreements (with the obligations guaranteed by BHPB). During the 1990's, Finance's board comprised senior executives from the BHPB Group. By way of example, from 1996 to 1999, Mr GW McGregor, the Executive General Manager Finance for the BHPB Group, was also a director of both BHPB and Finance. Finance did not have its own staff. It utilised the services of BHPB for which it paid management fees. The fees reflected the proportion of time BHPB personnel spent in providing services to Finance. In the case of Finance, most of the services provided by BHPB were accounting and treasury personnel. The BHPB treasury personnel had responsibility for determining the cash flow requirements of the BHPB Group using data provided by the operating divisions and relevant corporate staff, arranging the funding of those requirements and determining the form in which the funds would be raised. Performance of those tasks was subject to "Treasury Guidelines" prepared annually by the Treasurer & Vice President Corporate Finance which were then reviewed by the Chief Financial Officer and ultimately approved by the BHPB board. The guidelines provided a series of rules and protocols for a wide range of matters including credit limits (the total amount that could be borrowed from third parties), foreign exchange risk management, guarantees, interest rate and currency swaps, loan facilities and money market activities. The cash flow requirements of the BHPB Group were assessed on an annual basis through the preparation of annual rolling budgets. Each business unit prepared a budget. Those budgets were then aggregated to form the BHPB Group budget which was ultimately approved by the BHPB board. Preparation of the BHPB Group budget commenced in the March preceding the commencement of the next financial year. The budget forecasts (cash inflows and cash outflows) were prepared for five years on a rolling basis. The forecasts took into account "operating revenues, new (and yet to be approved) capital investments, capital expenditure sustaining existing projects, exploration expenditure and operating costs". Once the budget was approved by the BHPB board, the budget necessarily identified the cash flow shortfall. The manner in which the shortfall was funded was determined by the Corporate General Manager Taxation, the Corporate Treasurer and, ultimately, the Corporate General Manager Accounting. Proposals will be passed on to the Corporate General Manager Taxation and to the Corporate Treasurer for review. The Corporate General Manager Accounting will provide Business Groups with a written "sign off" once the Corporate General Manager Taxation and the Corporate Treasurer have indicated that the proposed funding structure is acceptable. The proposed funding structure should only be put in place upon receipt of this "sign off". For example, the 100% debt funding of an existing company's activities, other than on a temporary basis, is generally considered to be inappropriate. Similarly a company with high debt and little equity may need to have its structure reviewed if the consequential interest burden is leading the company into negative shareholder funds. Reviews of company funding structures must be done in collaboration with the responsible taxation officer. Before turning to consider the projects the subject of dispute in these proceedings, other aspects of the funding of group companies should be noted. First, most BHPB Group companies with bank accounts in Australian currency were part of an ANZ (AFT) sweep facility arranged through Finance. At the end of each day, each account balance was automatically transferred to a single bank account held by Finance. A similar arrangement was set up between Finance and Chase Manhattan Bank for BHPB Group companies with bank accounts maintained in US dollars. A positive bank account of a BHPB Group subsidiary swept to Finance resulted in a credit to the subsidiary's loan account with Finance and each negative balance swept to Finance resulted in a debit to the subsidiary's deposit account with Finance. Any surplus cash would then be placed by Finance on the overnight money market with third party financial institutions. Secondly, as a result of the process of capital expenditure approval, selection of appropriate funding structures and the banking arrangements referred to in these reasons for decision, the value of loans made by Finance to BHPB Group companies totalled billions of dollars. For example, in the 1995 and 1996 years of income, Finance made loans to the entities listed in Schedule A totalling in excess of $17 billion. Finance had standard lending terms for the inter-company loans which, for the relevant period, were adopted by resolution of the board of Finance on 30 November 1994. Such interest shall be due and payable within 21 (twenty-one) days of the day on which the relevant outstanding loan is repaid. Loans are to be made up of such amounts and are to be advanced on such dates as are agreed orally from time to time by the borrower and [Finance]. Each initial loan and each additional loan is to be for a period not exceeding five months at which time all loans shall become immediately repayable. The currency of each loan will be Australian Dollars. The application of the loan funds will be to fund normal operating activities including research and development where applicable, of the borrower. Unless otherwise designated, any repayments shall be applied to reduce the earliest outstanding advance and then be applied first against individual loans in excess of $50,000. For administrative convenience, each loan made by [Finance] under this arrangement will be entered into the one loan account. However it is acknowledged that each amount advanced is a separate loan. [Finance] will consider renewing loans at the close of each five month period should the borrower advise (orally) that it wishes to do so. One relevant change to these terms and conditions was an adjustment to the inter-company interest rate on 3 March 1995 as a result of a review undertaken by officers from the departments of Corporate General Manager Taxation and Manager Corporate Accounting. As a result of the standard loan terms and in particular cll (b) and (h) of those loan terms (see [21] above), each loan from Finance to a BHPB Group member (including BHPDRI and BHPTM the subject of dispute in these proceedings) was for a five (5) month term. It is not in dispute that the interest rate charged on loans from Finance to BHPB Group companies was higher than the interest rate at which it borrowed those funds from external third parties and from other members of the BHPB Group. Interest derived by Finance on the loans made to BHPB Group members accrued on a daily basis and was returned as assessable income on an accruals basis in Finance's income tax returns. As a result of the activities of Finance, it earned substantial interest income generating substantial accounting profits after tax and taxable income. The intention was that "the production and sale of HBI would convert fines with little value to a valuable product and would provide further economic value for the BHPB group" by: (1) enabling more lump ore to be extracted and sold; and (2) satisfying obligations imposed upon BHPM by the Western Australian Government to undertake secondary processing of iron ore in that State. Advice and assistance was sought by BHPIO (TB Janes) about the capital structure of BHPDRI in June 1995. At that time, BHPDRI had paid up capital of $20 million and a submission to the BHPB board seeking approval for expenditure to build a HBI plant near BHPB's Port Hedland operations had not yet been considered by the BHPB board. If the total expenditure for the project was ultimately approved, $300 million was forecast to be spent in the 1996 year. On the assumption that approval from the BHPB board was obtained, on 15 June 1995 BHPIO requested advice and assistance on the preferred capital structure and debt/equity mix and to put the necessary arrangements in place for the issue of additional equity, the establishment of an appropriate inter-company loan and to ensure that the internal funding procedures were correct. On 16 June 1995, the Chief Executive Officer of BHPM (Mr JK Ellis) sought approval from the BHPB board for the expenditure of A$1,550 million to build the HBI plant near BHPIO's Port Hedland operation. The BHPM Capital Procedures Manual in place in June 1995 dictated the structure and content of capital expenditure submissions including the HBI capital expenditure submission. For example, it was the Manual which required, inter alia , that: submissions were authorised by the BHPB board on the basis of their BHPB Group impact and therefore had to be presented from that perspective. All inter-business group and inter-divisional group implications had to be considered including the strategic importance to BHPM, the relationship or impacts on the performance of other parts of BHPB and the rationale supporting the expenditure: Sections 2.2, 3.2, Appendix 1 --- Submission Checklist. all projects had to be in the first instance evaluated on an ungeared or unleveraged basis to highlight the basic return on total assets employed by the project: Appendix 4 --- Common Pitfalls of Investment Analysis. The board submission (see [28] above) was supported by a two volume feasibility report comprising (1) a detailed HBI Facility Financial Model and (2) BHPIO Consolidated and Entity Financial Summaries which had been prepared on two distinct bases. Summaries for ten entities were included, one of which was BHPDRI. Each entity summary considered the project on a stand alone basis for that respective entity on stated assumptions. For BHPDRI, on the assumptions stated, the summary assessed the HBI plant as having a nominal DCF rate of return of 3.5% over 20 years or with an NPV at 10% of negative $606 million. On 20 June 1995, consistent with Section 21.19 of the BHPB Accounting Policy Manual as at May 1996 entitled "Funding of Group Companies" (see [19] above), the Corporate Treasurer reviewed the HBI capital expenditure submission and expressed a number of concerns about the proposal to the Executive General Manager Finance. On 28 June 1995, BHPM (Taxation) provided the advice sought by BHPIO in its memorandum of 15 June 1995 (see [27] above). Consideration should be given to funding with debt up to a level which is consistent with commercial debt funding levels for major industrial undertakings. You will recall that in the case of the Pilbara Energy project, a debt:equity ratio of approximately 3:1 was arrived at. I envisage that [Finance] would lend to BHPDRI at the inter-company rate of interest. ... There would be a very substantial pool of tax losses generated in this entity in initial years of development and operation from interest, R&D and capital depreciation. This will provide [BHPB] the desirable flexibility to utilise such tax losses under group tax relief arrangements to offset income and tax payments in other parts of the [BHPB] group. If [BHPB] invites future external participation in the project, arrangements should be structured to allow BHPDRI to remain a 100% [BHPB] entity so that project tax losses could continue to be transferred for the benefit of the Group. The presentation to the BHPB board was made by the Chief Executive Officer of BHPM, Mr JK Ellis. Subsequent to the presentation and in response to questions raised during the presentation, on 5 July 1995 further details were provided by Mr Ellis to the Managing Director of BHPB about the profit impact of additional ore sales and the composition of the consequential capital of $1,200m included in the HBI cash flow analysis. What then occurred was not explained other than in the most general terms. However, the loan facility for BHPDRI was established with Finance. It was not in dispute that the terms of that loan were in accordance with Finance's standard lending terms for inter-company loans which were adopted by resolution of the board of Finance on 30 November 1994 set out at [21] above. As a result of the standard loan terms and in particular cll (b) and (h) of those terms (see [21] - [23] above), each loan was for a five (5) month term. To accommodate the fact that at the end of each five month period a fresh advance was made, there were two loan accounts for the loan to BHPDRI from Finance --- account numbers 325320 and 326320 --- which were used for alternate 5 month periods. Initially loan account 326320 was used. The opening entry in that account on 31 July 1995 was a debit entry of $8,200,137.58 with the notation "I/CO TRANSFER REF G KERNI". On 1 October 1995, that loan account with a debit balance of $20,422,717.50 was closed and a new advance in the sum of $20,422,717.50 was made by Finance to BHPDRI in account number 325320. In October 1995 and May 1996, the directors of BHPDRI resolved to allot 35 million and then, subsequently, 75 million $1.00 shares to BHPM Holdings. During September and October 1996, an exhaustive review of the HBI project was undertaken. As a result of that review, two events occurred in November 1996. First, on 12 November 1996, BHPIO (T Janes) revisited the question of the capital structure of BHPDRI which had been adopted in June 1995 (see [31] above) and secondly, BHPM sought approval from BHPB for additional capital expenditure of A$140 million over and above that approved in June 1995. That capital expenditure submission was prepared in accordance with the Applicable Capital Procedures Manual then in place dated October 1996. Prior to the further capital expenditure submission being considered by the BHPB board, both the question of the appropriate debt/equity mix and funding structure for the capital expenditure, consistent with the BHPB Accounting Policy Manual (see [19] above), was considered by Corporate Taxation. Approval was received for: an equity investment of $370m to be made by BHPM Holdings in BHPDRI after 31 December 1996; and to continue the equity funding of BHPDRI on the basis of a 50 / 50 debt to equity ratio (as had existed). In reaching those conclusions, the required debt to equity level was considered. The selection should therefore take into account the intended purpose of the company. This company will primarily be involved in the export sale of beneficiated product where it maybe [sic] competing directly with local suppliers in foreign countries. From past experience with claims that our companies are resorting to unfair competition by dumping produce on foreign markets based on the observation that the particular companies never make any profits we need to ensure that this company is not saddled with a level of debt that leads to it being branded in the same way. For this reason we consider that the current debt to equity ratio (50%/50%) should be maintained. On 29 November 1996, the BHPB board approved revised capital expenditure on the HBI project from A$1,550,000,000 to $1,673,600,000. The approved increase was $123.6m. Consistent with the advice received from Corporate Taxation, on 30 January 1997 the directors of BHPDRI resolved to allot 370 million $1 shares to BHPM Holdings. As the general ledger for the loans from Finance to BHPDRI records, Finance advanced funds to BHPDRI which, together with the subscriptions of capital, were used progressively to pay expenses incurred by BHPDRI in the development and construction of the HBI plant. In addition, the general ledger trial balance recording the loan from Finance to BHPDRI reflects that the loan was conducted in accordance with Finance's standard lending terms for inter-company loans adopted by resolution of the board of Finance on 30 November 1994 (see [21] - [23] above). In August 1997, BHPB's Managing Director (Mr Prescott) asked Mr McGregor to conduct a review of the HBI project. At that time, one of the central issues raised by Mr Prescott was that, from the start of the project, not all of the risks associated with the project were understood. At the time of the review, Mr McGregor was Executive General Manager Finance for the BHPB Group as well as a director of both BHPB and Finance. The review was completed by 11 September 1997 ("the HBI Audit Report"). The HBI Audit Report attached to the memorandum from Mr McGregor is important. That report stated, inter alia, that: the projected NOPAT [net operating profit after tax] and ROC [return on capital] from the HBI plant per se were very modest, which was recognised at the time of the initial capital submission; escalation in Capex and cash operation costs (thought to be $140 per tonne) meant that the HBI project on a stand alone basis would not generate a return in excess of 1.5% to 2.5%. (This is to be compared with the fact that the Detailed Capital Submission Report in 1995 showed that the HBI Plant on a stand alone basis had a DCF rate of return of 3.5%); HBI was a low margin business that needed cheap gas, cheap electricity, low capital costs and low operating cost to succeed and the HBI project was challenged in relation to each of these matters. At that time, the choice was to abandon the project altogether or persist with completion as economically and expeditiously as possible. In the best interests of Finance and the BHPB Group, Mr McGregor concluded that "a forward view of the project reveal[ed] that there [was] no case to be made for either abandoning the project or slowing it down [and that] the only sensible course of action [was] to complete the project as expeditiously and cheaply as possible". As a result, Mr McGregor sought approval for total capital expenditure on the HBI plant of $2,275 million plus $128 million for commissioning costs. Consistent with the McGregor recommendation, on 18 November 1997, the Chief Executive Officer of BHP Ferrous Minerals forwarded to the Managing Director of BHPB (Mr Prescott) a memorandum entitled "[HBI] Project Supplementary Authorisation" seeking additional capital expenditure of $730 million, an increase of 44% above the existing authorisation. Based on an incremental cost to complete the project of $550 million, the memorandum reported that (1) the incremental NPV (nominal at 12.5%) was expected to be $888 million with a nominal IRR of 32.3% and (2) if the project did not proceed, the associated NPV loss was expected to be $429 million. By year six, the projected cash flows were positive. A payback period of six to seven years was expected. Mr McGregor's recommendation together with the supplementary capital expenditure submission was considered and accepted by the BHPB board on 27 November 1997. In so doing the Board gave approval for the expenditure of an additional $730 million on the project comprising $668 million in additional capital spending and $62 million in additional capitalised pre-commissioning operating expenditure. There is to be clear and thorough reporting of all significant developments in a timely fashion including all management action to address issues that may arise or opportunities for project outcomes to be improved. This reporting is to be monthly through Iron Ore's Business Reports and through appropriate comments in the Managing Director's Report, also monthly through Project Management's Business Report and quarterly (or more frequently if required) in the Business Reports presented to the Board. We are to pursue the proposal to sell down 15% of the project to our Japanese partners in our other iron ore businesses. We are to further investigate the advantages and disadvantages of iron ore feed price alternatives to the plant. In his capacity as Group General Manager, BHPM Finance, Mr Coburn had responsibility for the financial aspects of BHPM, which included preparation of statutory accounts for most of the entities within BHPM, and responsibility to ensure compliance with BHPB Group policies and procedures in preparation of capital expenditure submissions and compliance with capital expenditure approvals. On 5 December 1997, the Group General Manager BHPB Budgets and Accounting sent a note to Mr McGregor (at that time the Executive General Manager, Finance and a director of Finance) entitled "Asset Carrying Values". The note listed those assets which did not or would not provide a return of 10% or greater by May 1998 based on current book values. One of the assets listed was the HBI plant as a stand alone asset. The NPV of that operation based on book value determined on a 10% DCF basis was negative $657 million. This value did not include any benefits from the plant to be derived by the iron ore mines. Construction of the HBI Plant continued throughout 1998. Two critical events occurred during the course of that year. At the end of the 1998 financial year (31 May 1998) the board of BHPB changed its accounting policy for determining the recoverable value of non-current assets from undiscounted future net cash flows to discounted cash flows using the weighted average pre-tax interest rate of the BHPB Group's long term borrowings. This change was adopted to reconcile the accounts prepared under the Australian generally accepted accounting principles ("GAAP") with those applicable under United States GAAP. As a result of this change, adjustments were made to the recoverable value of non-current assets which resulted in changes to BHPB's profit and shareholders' equity. In the case of BHPDRI, as at 31 May 1998, the carrying value of BHPDRI's non current assets was written down by $590 million. The financial effect of the write down was to reduce the carrying value of certain assets of BHPDRI by that amount and to reduce BHPDRI's profit by $377,600,000 (after tax). The second event was an update on the HBI project presented to the BHPB board on 27 November 1998. By that time, construction of the plant was "largely complete" with the first briquette expected at the end of January 1999. However, there were still problems. The US scrap price had plunged to new depths and the estimated sales of briquettes would not require full plant capacity once the plant was completed and commissioned. At that time, the options were to "[c]ommission all trains on current schedule (1/99, 4/99, 5/99, 6/99) [and] Operate 1 train and others necessary to meet market" or "Defer Completion & Commissioning Module 2 [and] Commission & Operate When Market Justifies (2002?)". On 30 November 1998, the BHPB board agreed that BHP Ferrous Minerals "should complete construction of the entire plant, commission all trains on [the] current schedule and then operate only those trains necessary to meet (R&D) testing and product sales requirements". Consistent with the recommendation and subsequent approval by the BHPB board, train 1 of the HBI Plant was commissioned in early January 1999. However, it was shut down after 10 days because of production difficulties associated with the reduction process to produce DRI. The production difficulties were caused by the iron ore and partly reduced material not flowing continuously through the reactor train. There were frequent, sudden flow stoppages which upset the process and any attempt to balance the heat and mass flows in the reactor. In addition, the stoppages greatly increased the rate of accretion growth which required the reactors to be cleaned every 25 rather than every 160 days. At the end of the 1999 financial year, the carrying value of the HBI plant was written down by a further $531 million after tax. In the circumstances, [Finance] confirms that it does not intend for the period of twelve month's (sic) from the date of this letter, or for such shorter period as we may specify at our election, intend to seek repayment of any loan it may have with [BHPDRI] but shall keep the company's commercial performance under ongoing review. Prior notice shall be given to you should it become necessary for [Finance] to take action in respect of any loan. In March 2000, a further review of the HBI project was undertaken in response to the BHPB board's concerns about current performance of the operations and the inability of the plant to meet commissioning targets. At the BHPB board meeting on 23 March 2000, a presentation was made about the future of the HBI plant. The board resolved: (1) that trials to assess the technical adequacy and commercial viability of the HBI facility should proceed until September 2000 when the board would again review the investment; and (2) to approve additional capital expenditure of $46 million. At the same time, a review of the carrying value of the asset was to be completed by the end of April 2000. The board of Finance met on 30 March 2000. After noting the decisions of the BHPB board on 23 March 2000 and that BHPDRI was indebted to Finance in the amount of $2,113,944,530, the Finance board resolved to write to the BHPDRI directors to advise them that Finance would conduct a review of the loan by engaging Ernst & Young as independent experts to report on the valuation of the loan. Pending receipt of the Ernst & Young report, the directors of Finance agreed that a provision be made against the loan in Finance's books by adopting the "worst case" scenario which indicated a negative carrying value of the loan. Further consideration of the question of interest on the loan was deferred pending receipt of the Ernst & Young report. Moreover, the directors of Finance agreed to review the provision of further loans to BHPDRI after discussions with BHPB management and to keep the BHPDRI loan under close review. On 3 April 2000, Finance informed BHPDRI of these matters. As a result of Finance making provision on 31 March 2000 of a $2,174 million doubtful debt for its loan to BHPDRI, Finance was left with negative net assets in excess of $940 million. The BHBP Group Treasurer (Mr Czyzewski) was concerned that if the situation was not corrected, Finance may have been in breach of its various loan and financing arrangements. Accordingly, on 7 April 2000, he sought immediate approval for BHPB to seek an allotment of 950 million ordinary fully paid up shares in Finance (the consideration for such an allotment was to be $950 million). [Finance] has discussed the provision of further loan funds to [BHPDRI] through the existing intercompany loan facility and advised that it is unable to fund the further approved expenditure. The shareholder of [BHPDRI], [BHPM Holdings] has agreed to inject equity into [BHPDRI] with a total issue price of $150 million. This equity injection will be completed immediately. [BHPB] has agreed to subscribe for equity in [BHPM Holdings] as may be necessary to enable [BHPM Holdings] to meet the equity injection into [BHPDRI]. Approval for BHPB to seek an allotment of 950 million shares in Finance was provided and, on 11 April 2000, the directors of Finance resolved to allot 950 million ordinary fully paid $1.00 shares to BHPB. To facilitate the day to day cash transactions of [BHPDRI], an intercompany loan account between [BHPB] and [BHPDRI] has been established and should be used from today. The account number is 23700012 and is a standard [BHPB] short term, interest free loan. Following the $150 million equity injection, this intercompany loan account must be maintained as an asset loan (debit balance) in [BHPDRI's] accounts as the funding of HBI operations is via equity not the loan facility. A request for further equity funding will be necessary if required. After providing their preliminary views in April 2000, Ernst & Young tendered their report on the valuation of the BHPDRI loan receivable to the directors of Finance on 3 May 2000. Ernst & Young concluded that the value of the HBI plant did not exceed $346 million and had a nil value if the plant was closed. The report was considered by the directors of Finance at a meeting of the board held on the day the report was issued, 3 May 2000. On 10 May 2000, Finance wrote to both the directors of BHPDRI and to BHPDRI advising of the loan write off of $1,845,833,281 against the outstanding principal and interest of $2,191,833,281 and that following the write off, the directors of Finance had resolved not to take any further action to recover the debt written off as it appeared practically irrecoverable but that Finance reserved the right to recover the balance. The letter went on to state that Finance did not intend to seek repayment of the balance for the period up to 15 June 2001. On 18 May 2000, the directors of BHPDRI resolved to allot 150 million $1 shares to BHPM Holdings. On 31 May 2000, BHPDRI wrote off the balance of its HBI investment in the sum of $794 million after tax. Towards the middle of 2000, things appeared to improve after significant further capital expenditure expended to alter the process conditions within the reactor essentially resolved the initial problems. At 30 June 2000, BHPB applied Div 245 of Schedule 2C of the 1936 Act to cancel the losses and Finance claimed the bad debt deductions under s 25-35(1)(b) of the 1997 Act. On 24 May 2001, the BHPDRI directors resolved to allot an additional 45 million $1 shares to BHPM Holdings. Over 2003 and 2004, levels of production at the HBI plant increased. However, the HBI plant continued to be plagued by upsets in production. By May 2004, operations had been suspended following an accident which resulted in the death of one employee and serious injury to three others. After a detailed review of options for the plant, BHPB announced on 24 August 2005 that it would permanently close the HBI Plant. It had titanium minerals mining operations and a processing plant in New South Wales. BHPTM also held a mining lease over a large resource of titanium minerals (predominantly ilmenite) at Beenup in Western Australia. In November 1994, the proposal was to develop ilmenite mining and processing facilities at Beenup in Western Australia and to purchase an interest in an existing ilmenite smelting facility at Tyssedal in Norway. The proposal was to mine the ore body (containing ilmenite and other heavy minerals) at Beenup and to truck the heavy mineral products to the Port of Bunbury for export to the Tyssedal Facility and other users. The mine and associated processing facilities were to be conducted by BHPTM. On 15 November 1994, the Chief Executive Officer of BHPM (Mr JK Ellis) sought approval, by way of submission, from the BHPB board for the expenditure of A$222.6 million for the purpose of developing the mining and processing facilities at Beenup in Western Australia and the purchase of an interest in the existing Tinfos ilmenite smelting facility at Tyssedal in Norway. The capital expenditure submission recorded, inter alia, the nominal IRR of the proposal was 19.1% (15.2% real) with a payback period of 6.7 years. On 21 November 1994, the Corporate Treasurer (Mr Zimmerman) sent a memorandum to the Executive General Manager Finance analysing the BHPM capital expenditure proposal. At that time, the "major technical risks" were that there was "no mineral sands experience of dredging to 45 metres depth and that the deposit [had] a high slimes content". The BHPB board approved capital expenditure of $222,600,000 for the BHPTM project at Beenup on 24 November 1994. The general ledger trial balance recording the loan from Finance to BHPTM reflects that the loan was conducted in accordance with Finance's standard lending terms for inter-company loans adopted by resolution of the board of Finance on 30 November 1994 (see [21] - [23] above). As a result of those loan terms and in particular cll (b) and (h) of the standard loan terms, each loan was for a five (5) month term. On 5 July 1995, a two year letter of comfort was provided by BHPB to the directors of BHPTM. 2. 3. 4. 5. The loan funds provided by Finance were used to fund the continuing development of the Beenup mine from 1995. Production at the mine commenced on 13 January 1997. At that time, BHPTM already had entered into a long term contract to supply ilmenite to a BHPB joint venture in Norway ("the Norwegian Contract"). On 17 July 1997, a second letter of comfort was provided by BHPB to the directors of BHPTM. Again, so far as is relevant, the letter was largely in the same terms as the first letter of comfort (see [66] above) but for cl 5.1(a) which stated "the expiry of one year from the date of this letter". The board minutes of BHPTM resolved that "on the basis of" the 17 July 1997 letter of comfort, there were reasonable grounds to believe that BHPTM would be able to pay its debts as and when they fell due and the board authorised the directors to sign the relevant statement to be provided under s 301 of the Corporations Law. By late 1997, BHPTM's Beenup mine had experienced significant operational difficulties. The material being mined at Beenup was much harder than expected. Further complications had arisen in disposing of and storing the tailings from the mining operations. By the end of the 1998 financial year (31 May 1998), the project was continuing to encounter serious difficulties and, as a result, was not meeting its contractual commitments to supply titanium minerals to customers. Two steps were taken by BHPTM. First, BHPTM declared force majeure under the terms of the Norwegian Contract and secondly, following a review of the carrying value of assets undertaken as part of the preparation of BHPTM's financial statements for the 1998 year (ending 31 May 1998), on 18 June 1998 Mr McGregor (as Executive General Manager Finance) recommended to the BHPB board that it approve writing down the carrying value of the Beenup assets by $99 million (after tax) on the assumption that an economically feasible solution would be developed to overcome the operational difficulties at the mine. As noted earlier (see [45] above), on 31 May 1998, the BHPB Group changed its accounting policy for determining the carrying value of assets. On 9 July 1998, a third letter of comfort was provided by BHPB to the directors of BHPTM. But for the date, the letter was in the same terms as the second letter of comfort (see [68] above). The board minutes of BHPTM again resolved "on the basis of" the 9 July 1998 letter of comfort that there were reasonable grounds to believe that BHPTM would be able to pay its debts as and when they fell due and the board authorised the directors to sign the relevant statement to be provided under s 301 of the Corporations Law. Between May and November 1998, further work continued on the Beenup mine particularly in relation to the issue of disposal of the tailings. Throughout this period, the board of BHPB continued to approve and support the operations. In December 1998, a parallel process examining "exit possibilities" commenced. The carrying value of the Beenup assets was again reconsidered during the preparation of the half yearly accounts for the period ended 30 November 1998. Following consideration of a memorandum prepared by Mr Jim Hall (the Group General Manager BHPB Budgets & Accounting) to the Executive Director Finance dated 3 December 1998, the audit committee of BHPB resolved at a meeting on 17 December 1998 that the carrying value of the Beenup assets be retained at $114 million. The memorandum recorded: at 31 May 1998, the carrying value of the Beenup assets was written down by $150 million (pre tax) to $134 million because of technical and other operational problems; between 31 May and 30 November 1998, significant progress had been made on a tailings disposal solution but the work was approximately 4 months behind plan; the carrying value for the half year November 1998 was fundamentally unchanged from May 1998 and again assumed an economically feasible technical solution to the technical and other operational problem s; at the BHPB board meeting on 27 November 1998, a quarterly review of the Beenup project was presented to the board at which time the board agreed to continue with operations and in parallel to examine exit options, including by sale, merger or closure; the exit options and valuations were to be formalised by 31 May 1999 and if the closure option was adopted, then in addition to considering the carrying value, the BHPB accounts would need to include allowance for rehabilitation and site closure costs, breach of contract claims from customers and other costs. Technical difficulties, however, continued to affect the mine and, in February 1999, a decision was made to close the plant and write off the balance of the carrying value of the investment. President [BHPTM], Mr CE (Colin) Smith said the Company had directed considerable engineering and technical resources at resolving the problems at Beenup over a 12 month period. "After significant effort, it just wasn't possible to find a feasible solution that would allow the operations to continue. ... there comes a time when a company has to made hard decisions on a project such as this. That time has come. We have taken the engineering and technical research as far as we can. Mr Smith said [BHPB] had looked for a buyer with access to different technology and alternative business objectives for Beenup, but it had become apparent in recent days that this would not be possible. The search included major titanium mineral producers and processors around the world. After the mine closed, the directors of BHPTM conducted a review of options available to the company and considered the means by which BHPTM might have been able to service its loan with Finance. That review continued at least from May until August 1999. On 31 May 1999, Finance provided approximately $62 million to BHPTM to enable it to repay an overdraft it had with the ANZ bank. On 8 July 1999, a fourth letter of comfort was provided by BHPB to the directors of BHPTM. Again, so far as is relevant, the letter was largely in the same terms as the second letter of comfort (see [68] above) but for the addition of the words "[i]t does not and is not intended to impose any contractual or legal obligations on [BHPB] in respect of any other person nor bind it to any particular requirement or course of action" to the end of the letter. [Finance] confirms that it will not demand payment of its loan to the company pending a complete review of the company's future operations, including current proposals to transfer a commercial Group operation into the company. [Finance] shall review its position in six months time or earlier as warranted in the circumstances. [Finance] shall advise the directors prior to taking any action in respect of its loan following the review. At a meeting held on 19 July 1999, the directors of BHPTM tabled the annual accounts for the 1999 year and after referring to the 8 July 1999 letter of comfort undertaking "(on a conditional basis) to provide sufficient funds to the Company to enable it to pay debts which the Company elects to incur", the board was of the opinion "there were reasonable grounds to believe that [BHPTM] would be able to pay its debts as and when they fell due" and authorised the directors to sign the relevant statements to be provided under the Corporations Law . BHPTM completed its review of options by early August 1999. At a meeting of directors of BHPTM on 18 August 1999 (chaired by Mr Coburn) the directors considered the options for meeting the existing and ongoing obligations of BHPTM. It was noted that the discussions under consideration had produced no agreement and will not be pursued. It was agreed that no other options for improving the liquidity of [BHPTM] were apparent and it was therefore necessary to consider the means of meeting the company's existing and future obligations, in particular, the loan payable to [Finance]. [Finance] had provided an undertaking not to call its loan until a review of the reorganisation opportunities had occurred. [Finance] has now requested the company to provide details of this review on Friday 20 August 1999. It was agreed that Mr Coburn make the presentation to the board of [Finance]. Finally, the directors examined the balance sheet of the company to ascertain the likely shortfall on realisation of the company's assets to meet existing obligations in the event that a demand for payment may issue from [Finance]. The directors are currently relying upon the terms of the comfort letter that was provided by the parent, [BHPB], on 8 July 1999. First, BHPTM (Mr Coburn) sent a letter to Finance concerning the future operations of BHPTM. The discussions with other Group entities concerning these proposals have ended without agreement as the options under consideration were not feasible. In view of this, the prospects of expanding the company's activities to assist with the servicing and repayment of its debt to [Finance] are now, in all likelihood, non-existent. The directors are presently reviewing the company's balance sheet to assess its ability to meet existing and ongoing obligations. Should [Finance] call [on] its loan in the immediate future, the directors believe that [Finance] would realise little more than the amount of $11.5 million that BHPTM currently has on deposit with [Finance]. That letter, together with a presentation on the financial position of BHPTM from Mr Coburn, was considered at a meeting of directors of Finance held on 20 August 1999. By that date, Mr McGregor had taken leave of absence pending his imminent retirement and the directors attending the meeting were Mr Czyzewski (the Corporate Treasurer) and Messrs HE Rose and BJ Skahill. Transfer to another mining operations not feasible. Claim against company for non-performance of supply contract --- Approx $49m. With the exception of some land which may realise a $2-$3 million above book value, all assets in the attached balance sheet are believed to be at realisable value. Any future proceeds will be used to satisfy priority claims. The prospects of servicing or repaying the loan from [Finance] are non-existent. That same day, 20 August 1999, the Vice President Group Accounting & Reporting, Mr J Hall, forwarded a memorandum to Mr Chip Goodyear concerning the loan from Finance to BHPTM. A copy of the memorandum was provided to Mr Czyzewski, the Corporate Treasurer and a director of Finance. It is likely the Company will eventually be liquidated following satisfaction of its commercial obligations. The write-down will be disclosed in the accounts of [Finance] as a bad debt. In order to reflect this in the accounts of the affected companies, a number of actions are recommended. [BHPB] will revoke the Letter of Comfort provided to [BHPTM] on 8 July 1999 and to create a new, but limited, Deed of Support to the extent of future external debts only including any obligations pertaining to the Beenup Project imposed on the Company under the Mining Agreement with the State Government of Western Australia. The new Deed of Support should provide the Directors of [BHPTM] with greater security, as it will be legally enforceable. Notwithstanding this, the deed will permit the undertaking to be revoked at the discretion of [BHPB], but without limiting the comfort for any trading obligation incurred up to the date of the termination. [BHPB] does not propose, however, to support internal funding obligations under these revised arrangements. ... It is confirmed that as the Deed of Support does not extend [BHPB's] existing exposure to the Beenup Project, or other activities of [BHPTM], no approval is required from the Board or the Managing Director. Furthermore, the proposed level of support, up to US$100 million is within your existing authority. In order to commence these formal arrangements it is necessary to revoke the Letter of Comfort and enter into the Deed of Support. In this regard refer to the memorandum to you from Legal Counsel (Peter Ablett). If acceptable, please sign the Deed on page 4 and have your signature witnessed. Letter dated 23 August 1999 to the Directors of [BHPTM] stating that the Letter of Comfort is to be revoked with effect from Monday, 23 August 1999 and a proposal to enter into a Deed of Support. This letter can be signed on behalf of [BHPB] by the Group Treasurer. During the morning of 23 August 1999, BHPB informed the Directors of BHPTM in writing that it intended to revoke the letter of comfort of 8 July 1999 and that it proposed a new arrangement by way of a Deed of Support be entered into by the two companies which would be legally enforceable and provide the Directors of BHPTM with greater security. A draft of the Deed was attached. The letter went on to state that revocation of the letter of comfort would take effect upon execution of the Deed of Support. At 11.15 am on 23 August 1999, the Directors of BHPTM (Messrs Coburn, March, CE Smith and WB Smith) met. The meeting lasted half an hour. The minutes of the meeting record that after Mr Coburn explained the outcome of his presentation to the board of Finance, Mr Coburn: tabled the letter from BHPB of 23 August 1999 notifying of its intention to revoke the letter of comfort of 8 July 1999 and that, in substitution, BHPB proposed to enter into a new "comfort undertaking" with BHPTM in the form of a Deed of Support which subsumed the letter of comfort; explained that there existed some doubt as to the enforceability of the undertaking provided in the letter of comfort of 8 July 1999 whereas the Deed offered greater security as it would be legally enforceable; and recommended that the offer from BHPB be accepted. The minutes record that the legal ramifications of entering into the Deed and the impact on directors' responsibilities were then discussed. After agreeing to review the trading position of BHPTM later in that day, the directors resolved that each of them would sign the Deed of Support and affix the company seal to the Deed. The Deed of Support was executed and bears the date "23 August 1999". That was not all that happened on 23 August. At 12 noon, 15 minutes after the meeting of directors of BHPTM concluded, and one assumes after the Deed of Support had been executed, the directors of Finance met and resolved to call for payment of the BHPTM loan of $339,216,146.22 set off against the deposit of $11,593,237.88 and in the event that there was a failure to repay the balance, to write off the balance outstanding of $310,881,702.40. You advised [Finance] at a meeting on 20 August 1999 that the review has now been completed and that it was decided that it was not appropriate to pursue the options under consideration. We have also been advised that the letter of comfort dated 8 July 1999 provided by [BHPB] to BHPTM has now been cancelled. This in combination with the results of our assessment of the financial position of BHPTM indicates to us that a material adverse change has occurred in the general financial condition of BHPTM which could materially effect (sic) its ability to perform its loan obligations. We advise that the loan facility is hereby cancelled and we now declare the loan and all interest accrued thereon amounting to $339,216,416.22 forthwith due and payable. Please remit these funds immediately. Of course, repayment of the whole of the outstanding balance of the loan was not going to occur. But for the amount on deposit, there were no funds to remit. Later that same day, BHPTM informed Finance of that fact in writing. Two remaining steps were then taken on 23 August 1999 to complete the arrangements. Finance told BHPTM of the write off and the set off against the amount on deposit and the directors of BHPTM resolved to record both the set off and the write off in the accounts of BHPTM. That is what occurred. Provisions of the [1997 Act] are identified in normal text. The other provisions, in bold , are provisions of the [1936 Act]. First, whether Finance was in the business of lending money (s 25-35(1)(b)) and, if so, whether each loan was made in the ordinary course of that business and secondly, whether the debt due by BHPTM was bad when written off. The second issue is not relevant to the BHPDRI loan. The Commissioner accepts that part of the debt due by BHPDRI to Finance and written off by Finance in the 2000 year was bad. (i) Finance in the business of lending money? Finance contends that it was, in the relevant years of income, in the business of lending money. The Commissioner does not agree. He concedes the evidence establishes that since at least the early 1980's: Finance did enter into borrowing transactions with third parties (see [13] above); Finance borrowed substantial sums of money from those third parties at commercial rates of interest; and Finance on lent those monies to related entities to fund both operational activity and new projects at a higher rate of interest (see [24] above) thereby earning substantial profits on which it paid income tax (see [24] above). In particular, the Commissioner contends that the evidence does not establish that the activities of lending which in fact existed (see Schedule "A") were activities of Finance and not the activities of BHPB. Put another way, the Commissioner contends that there was no evidence or insufficient evidence that Finance exercised a sufficiently independent corporate mind in respect of the lending activities recorded in its books and records for Finance to be carrying on a business of lending money: see, for example, Levin & Co Ltd v Inland Revenue Commissioner (NZ) [1963] NZLR 801, 838-839. The question whether the business being carried on by Finance was the business of lending money is a question of fact and characterisation: Consolidated Press Holdings Ltd v Federal Commissioner of Taxation (1998) 88 FCR 151, 168-169, Brookton Co-operative Society Ltd v Federal Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 , 469 and Ferguson v Commissioner of Taxation [1979] FCA 29 ; (1979) 26 ALR 307 , 319-320. The essence of a business of "lending money" is not confined. As Ryan J said in Ashwick (Qld) No 127 Pty Ltd v Commissioner of Taxation [2008] FCA 853 at [4] , the expression "engaged in a business of lending money" "in the relevant provisions of the [1936 Act] and the [1997 Act] has a wide general application, capable of describing activities as diverse as those of a small pawnbroker with no treasury activities and those of a major national or international banking institution with a complex treasury, perhaps much more sophisticated and intricate than anything which the evidence suggests was engaged in or contemplated by [the relevant entity in the Ashwick litigation]". There is therefore an important and material difference between borrowing by a finance company in the ordinary course of its business and borrowing by a manufacturing or trading company. In general the finance company's borrowings provide money which it turns over at a profit. Borrowing otherwise than for on-lending or for the repayment of funds borrowed for on-lending, that is, borrowing undertaken for capital rather than revenue purposes, as in [ Commercial and General Acceptance Limited v The Commissioner of Taxation of the Commonwealth of Australia [1977] HCA 47 ; (1977) 137 CLR 373] , is an exception to the general rule. On the other hand, borrowing by a manufacturing or trading company is often undertaken to strengthen the capital or profit-earning structure of the company. A finance company usually borrows in order to increase its working capital which is then turned over at a profit; the manufacturing or trading company frequently borrows to strengthen its permanent capital. Finance contends that the concessions made by the Commissioner about the activities of Finance (see [91] above) are, themselves, sufficient to conclude that Finance is in the business of "lending money". I agree. However, the Commissioner contends that notwithstanding that on its face Finance was in the business of lending money, one should nevertheless conclude that Finance was not carrying on such a business because "Finance did not make its own decisions with respect to borrowing" and "the evidence [did] not establish that Finance exercised its corporate mind to make decisions about borrowing, particular lending activities, or any of the other activities which might be expected to have been involved in the carrying on of a systematic and organised activity sensibly able to be characterised as a business of lending money". That contention raises a number of questions about the separate existence of a corporate entity and the relationship between a parent and its subsidiaries. First, does the evidence of its books and records tendered by Finance gives rise to a presumption of regularity or independent existence? This is so in most, if not all, common law jurisdictions: see, eg, Commissioner of Taxation v Bivona (1990) 21 FCR 562 , 567 (citing Mason J in Hope v Bathurst City Council [1980] HCA 16 ; (1980) 144 CLR 1 , 8); Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 19 ATR 1122 , 1126 (endorsing the opinion of Young J in Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 5 NSWLR 254 , 267 and stating that separate legal personality persists absent sham, a façade, a partnership between companies in a group in fact or law or the creation of a company to enable a legal or fiduciary obligation to be evaded or a fraud to be perpetrated); Hobart Bridge Co Ltd v Federal Commissioner of Taxation [1951] HCA 33 ; (1951) 82 CLR 372 , 385; Freeman v Complex Computing Co Inc , [1997] USCA2 466 ; 119 F3d 1044 , 1052 (2 nd Cir 1997) (stating that the corporate form itself gives rise to a presumption of corporate independence and limited liability because it is necessary to encourage business development); American Leaf Blending Co Sdn Bhd v Director-General of Inland Revenue [1979] AC 676 , 684 (stating that any gainful use of assets by a corporation is prima facie the carrying on of a business); Brookton Co-operative Society Ltd v Federal Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 , 469; see, eg, ss 18-21, 45A, 119, 124, 125, 1305 and 1306 of the Corporations Act (and the equivalent antecedent provisions) and s 69 of the Evidence Act 1995 (Cth). The Commissioner accepts this proposition in his written submissions. That is not surprising. Secondly, in addition to the facts conceded by the Commissioner (see [91] above), the facts summarised at [9] to [16] above were not in dispute, including but not limited to the fact that BHPB incorporated Finance in 1975 "for a legitimate business purpose", namely "to carry on the business of financier in all its branches both within and outside Australia", and that Finance was registered as a financial institution and short term dealer for the purposes of the Financial Institutions Duty legislation in Victoria and New South Wales: see also Bivona 21 FCR 562 , 567 and the other cases cited in [96] above. What then is relied upon to displace a finding that Finance was a separate legal entity which carried on the business of lending money? As noted, the Commissioner's objection is not so much that Finance does not carry on a business but that it is the parent company (BHPB) that carries on the business of lending money and Finance does not. Put another way, that Finance was at the relevant time a "mere conduit" of its parent company, BHPB. I reject those contentions. Putting to one side whether the language of s 25- 35 imposes a requirement of independent corporate mind and decision making when there exists a separate legal entity that is engaged in the business of lending money (an assumption I make in favour of the Commissioner for the purposes of considering his argument), the Commissioner's argument fails for at least two reasons. First, because that conclusion (ie that Finance was a "conduit" for its parent) "begs, not answers, the question whether the activities of [Finance] are correctly characterised as its principal business consisting of the lending of money" ( Bivona 21 FCR 562 , 567), and, in any event, because the submissions relied upon by the Commissioner are contrary to the facts and no less importantly, contrary to long established authority. The Commissioner's argument directly raises questions about the weight or importance that should be given to the fact that the corporate boards of BHPB and Finance overlapped, that Finance relied upon the board of BHPB to approve capital expenditure on a particular project and that Finance relied upon the processes and procedures of BHPB in deciding the split between debt and equity for each project and, accordingly, the amount to be lent by Finance to the particular subsidiary with responsibility for that project. It is to those issues I now turn. The mere fact that corporate boards overlap is insufficient to defeat the presumption of separate existence: Walker v Wimborne [1976] HCA 7 ; (1976) 137 CLR 1 , 3-4 (as to the fact that the companies had common directors) and 6-7; see also Seltzer v IC Optics Ltd , 339 FSupp2d 601, 610-611 (DNJ 2004), United States v Bestfoods , [1998] USSC 65 ; 118 SCt 1876 , 1888 (1998) ("It is a well established principle [of corporate law] that directors and officers holding positions with a parent and its subsidiary can and do 'change hats' to represent the two corporations separately, despite their common ownership"); Leo v Kerr-McGee , Civ A No 93-1107(JEI), 1996 WL 254054 (D NJ, 10 May 1996) at *6 ("A significant degree of overlap between directors and officers of a parent and its subsidiary does not establish an alter ego relationship"). In fact, there is a general presumption "that the directors are wearing their 'subsidiary hats' and not their 'parent hats' when acting for the subsidiary", so dual office holding alone is not enough to establish liability: Bestfoods , 118 SCt at 1888 (quoting P Blumberg, Law of Corporate Groups: Procedural Problems in the Law of Parent and Subsidiary Corporations (1983) § 1.02.1, 12). Moreover, notwithstanding what may have been said by the Full Court in Spassked Pty Ltd v Commissioner of Taxation [2003] FCAFC 282 ; (2003) 136 FCR 441 , 470-71 about active management, Brookton Co-operative Society Ltd v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 establishes that the activities necessary to constitute a business are not onerous or extensive. In Brookton , Aickin J (at 469-70) considered that simply accepting a gift of shares and holding them until they produced dividends was enough activity to constitute a business. In the same way, lending one's own funds sourced from a third party at interest and receiving a higher rate of interest on that advance, even if directed by another to make the advance, is sufficient to constitute carrying on a business: see eg Carapark Holdings Limited v Commissioner of Taxation [1967] HCA 5 ; (1967) 115 CLR 653 at 659. The facts in Spassked are distinguishable --- in that case, the entity was interposed and, unlike Finance, did not receive interest on the loans it made. In the present case, even if Finance was acting in the BHPB Group's interest, as in Commissioner of Taxation v E A Marr and Sons (Sales) Ltd [1984] FCA 213 ; (1984) 2 FCR 326 , 330-31, that is sufficient for it to be carrying on a business. In that case, the Full Court held that informal leasing between parent and subsidiaries constituted carrying on of a business even where no income was derived from the transactions in question and the parent retained complete ability to control the subsidiaries' lending activities and profits. Here, over an extended period, Finance not only borrowed and on lent money on numerous occasions to a variety of entities at rates of interest (which the Commissioner did not suggest were less than commercial) but did so on loan terms stipulated by Finance and where "the rates of interest payable on the money lent were significantly higher than the rates payable on the money borrowed" (see [93] above), thereby generating a substantial profit: Commissioner of Taxation v Bivona (1990) 21 FCR 562 , 567-9. The fact that the loans made by Finance were made to related entities is not determinative: Bivona (1990) 21 FCR 562 , 569. And the fact that Finance might have been or in fact was acting in the BHPB Group's interests is not unusual. To a very great extent, its powers, and the powers and obligations of its organs, are regulated by the applicable companies legislation. So, for example, at the time of the events giving rise to this appeal, its board of directors owed duties to its sole shareholder, AWB. The content of those duties was to be found in the Corporations Law (Vict) and the considerable body of judge-made law affecting directors' duties. The central duty of the board of AWBI was to observe its constitution and to pursue the interests of the company as expressed in that document. As a wholly owned subsidiary of AWB those duties would, no doubt, have required the board of AWBI to pursue the interests of its parent (and thus, its parent's shareholders) to the extent that those interests were compatible with other obligations of AWBI. In fact the interests of the two companies coincided. The constituent documents of both AWB and AWBI required that AWBI seek to maximise returns to those who sold wheat into AWB wheat marketing pools. That was the position here --- Finance was incorporated on 29 August 1975 as a wholly owned subsidiary of BHPB "for the purpose of borrowing funds to re-lend to Group companies" with one of its objects "to carry on the business of financier in all its branches both within and outside Australia" (see [9] above). The fact that the directors of the corporate boards overlapped and that Finance relied upon the staff and processes of the BHPB Group (for which it paid a fee) does not detract from the inevitable finding that Finance was not a sham, was not a mere conduit, was in a business and that business was lending money in the sense described by the High Court in AVCO Financial Services Ltd v Federal Commissioner of Taxation [1982] HCA 36 ; (1982) 150 CLR 510 , 527 (see [93] above) and Coles Myer Finance Ltd v Federal Commissioner of Taxation [1993] HCA 29 ; (1993) 176 CLR 640 , 663-664. See also Federal Commissioner of Taxation v Unilever Australia Securities Limited (1995) 56 FCR 152 , 156 and 158. No other conclusion is open: see, eg, Mills v Mills [1938] HCA 4 ; (1938) 60 CLR 150 , 164-165; Walker v Wimborne [1976] HCA 7 ; (1976) 137 CLR 1 , 6-7 and Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 , 577. (ii) BHPDRI and BHPTM loans made in the ordinary course of Finance's business of lending money? The Commissioner contends that even if Finance's business was that of lending money, there was insufficient evidence to assess whether each of the loans to BHPDRI or BHPTM was made in the ordinary course of that business. I also reject that contention. The loan account provided by Finance to each of BHPDRI and BHPTM was conducted in accordance with Finance's standard lending terms for inter-company loans adopted by resolution of the board of Finance on 30 November 1994 (see [21] to [23], [40] and [65] above). As a result of those loan terms, particularly cll (b) and (h) of the standard loan terms, each loan was for a five (5) month term. As the summary of facts demonstrates (BHPDRI at [26] to [60], BHPTM at [61] to [87], Finance at [91] to [104] and [107] to [118] below), each loan was made in the ordinary course of Finance's business of lending money. Consistent with the principles in Fairway Estates Pty Ltd v Federal Commissioner of Taxation [1970] HCA 29 ; (1970) 123 CLR 153 and Franklin's Selfserve Pty Ltd v Federal Commissioner of Taxation [1970] HCA 33 ; (1970) 125 CLR 52 , each loan was not an instance of lending for an extraneous purpose. Finance made the loans to both BHPDRI and BHPTM to advance its own purpose of profit-making by lending. It was not Finance's business to make decisions about debt and equity. Finance's business was to borrow and lend money following the making of such decisions by others. But for the lending by Finance, Finance would not have derived the substantial interest income and profits from 1986 to 2002 (see [24] above). The "hiccough" in the 2000 year is the subject of these proceedings. The fact that out of 17 years of continued and successful borrowing and lending money, two projects "failed" in one year (the 2000 year the subject of these proceedings) does not and cannot convert these loans to loans for an extraneous purpose or being other than in the ordinary course of that business. Moreover, for the reasons set out in section (i) above (see [91] to [104] above), the circumstances in which each loan was made are not the same as or analogous to those considered by the High Court in Franklin's Selfserve Pty Ltd v Federal Commissioner of Taxation [1970] HCA 33 ; (1970) 125 CLR 52 , especially at 66-67. Here, it cannot be said that each loan was an isolated transaction of a very special character undertaken by Finance at the behest of BHPB. Each investment was considered by the BHPB board in accordance with usual practice (see [18] and [29] (generally), [26] to [32] in relation to BHPDRI and [62] to [64] in relation to BHPTM), and once approved by the BHPB board, the funding of that investment was determined in accordance with BHPB's Accounting Policy Manual (see [19] above). That portion of the investment funded by Finance was subject to Finance's own standard terms and conditions which provided for Finance to generate a profit on the amount lent to the borrowing entity in each case (see [21] above). The projects partly funded by Finance's "advances" (whether to BHPDRI or BHPTM) were the subject of ongoing reviews at regular intervals by the board of BHPB and Finance (in the case of BHPDRI see [36] to [60] and in the case of BHPTM see [69] to [82]). The characteristics relied upon by the Commissioner included: that ownership of the HBI project was divided between different legal entities, and the loan from Finance to BHPDRI was not in the ordinary course of Finance's business because BHPDRI was the loss carrier in relation to the HBI project and it cannot have been Finance's ordinary practice to finance projects by unsecured loans to an entity which was expected from the outset to make a loss; the HBI project only satisfied the various BHPB policies relating to capital expenditure because components of the project other than the HBI plant were profitable; the projected returns from the HBI plant worsened over time; for example, the NPV of the HBI plant in isolation was negative $657 million at the end of September 1997 (see [44] above). The facts surrounding the HBI project establish, contrary to the Commissioner's contentions, that each loan to BHPDRI was not an isolated transaction of a very special character undertaken by Finance at the behest of BHPB. Capital expenditure authorisation on the HBI project was sought in accordance with the BHPM Capital Procedures Manual (see [28] and [29] above). The initial and subsequent capital expenditure authorisation submissions and reviews outlined the expected returns of the project (see [28] and [30] in 1995, [36] to [39] in late 1996, [41] to [42] in 1997, [46] in late 1998, [49] and [50] in March 2000). At the outset, in 1995, the project had a payback period of 5 years. In September 1997, after the completion of a detailed review by Mr McGregor, the conclusion was that there was no case to abandon or slow down the project and that the only sensible course of action was to complete the project as expeditiously and cheaply as possible (see [41] above). In fact, the project then was still forecasted to generate average net annual future cash flows of $557.1 million from year 6 (see [42] above). Finally, the decision to close the HBI plant came years after the debt was written off, after production had in fact increased and as a result, at least in part, of unforeseen events or events beyond the control of BHPDRI (see, for example, [60]). On the question of repayment of the BHPDRI loan, the Commissioner contended that at the time of the initial investment in the HBI project, the return on investment by BHPDRI itself was insufficient for BHPDRI to repay to Finance any loan made to it in accordance with Finance's standard inter-company loans (see [21]-[22] above). In support of that contention, the Commissioner referred to two documents (1) the initial capital expenditure authorisation submission of 16 June 1995 (see [28] above) and (2) the McGregor memorandum dated 11 September 1997 (see [41] and [42] above). The memorandum prepared on 16 June 1995 by the Chief Executive Officer of BHPM (Mr JK Ellis) that sought initial approval for capital expenditure by BHPB on the HBI plant demonstrated that HBI sales were modest in relation to anticipated returns on the project as a whole (for example, $43 million net operating profit after tax in 2004). However, not only is the value non-negative, repayment of the BHPDRI loan from Finance is supported by a number of facts. First, at each point the decision to invest (or invest further) was taken on the basis of the return on the project as a whole given the facts which existed at the time of each review: see [28] and [30] in 1995, [36] to [39] in late 1996, [41] to [42] in 1997, [46] in late 1998, [49] and [50] in March 2000. Further, the Commissioner's contention that anticipated cash flows would be insufficient to make repayments was calculated using discounted cash flows rather than actual dollars. In the context of a repayment of a loan, such an approach does not provide a complete answer to the question of whether an entity can repay a loan in real dollars in years to come. Moreover, selection of BHPDRI as the project entity, consistent with Section 21.19 of the BHPB Accounting Policy Manual (see [19] above), was considered together with the appropriate debt funding levels for such a project (see [31] above). Those two issues (the entity and the debt funding levels) were interrelated and considered on the basis that BHPDRI would ultimately make a profit and, until it did, the anticipated "substantial pool of tax losses generated in [BHPDRI" would provide BHPB with the ability to offset income and tax payments in other parts of the BHPB group (see [38] above). Finally, it was the uncontested evidence of Finance that had the HBI project achieved the anticipated returns, there would have been a funds flow in the form of additional equity by way of redeemable preference shares or, as stated by Mr McGregor, it was "...usual that the BHPB group entities which contributed to overall profit were rewarded or compensated for such contribution, for example by way of an internal cash flow adjustment". The HBI project posed a series of difficult decisions throughout the life of the investment (for example, these difficulties were the subject of the review conducted by Mr McGregor in 1997 (see [41] and [111] above)). The evidence establishes that throughout the life of the project decisions were made on the basis of obtaining the best possible return in circumstances that were not ideal: see [36] to [39] in late 1996, [41] to [42] in 1997, [46] in late 1998, [49] and [50] in March 2000. To provide a simplistic example, where an investor makes a $10 million investment, and that investment goes bad, the investor is often faced with limited options. Cut their losses by abandoning the project and recouping little, if any, return on the investment or, depending upon the circumstances, invest further funds in the hope of generating a greater return on the total funds expended. The course of action adopted will depend upon many factors including but not limited to availability of investment capital, project risk and the period of repayment. It is a calculation undertaken by investors and lenders on a daily basis. This is what occurred here --- a series of reasonable and diligent decisions with respect to the HBI project and BHPDRI. The circumstances existing at the date of each review and the analysis of the facts and circumstances relating to each of the decisions is recorded: see [36] to [39] in late 1996, [41] to [42] in 1997, [46] in late 1998, [49] and [50] in March 2000. To adopt the language used by the Menzies J in Franklin's Selfserve (at 66), each of the advances by Finance to BHPDRI was not "isolated", was not of a "very special character" and did not arise external to the "taxpayer carrying on a business as a money lender". As the summary of the facts reveals (see [61] to [87] above), the BHPB board continued to approve and support the operations and although the project experienced difficulties, those difficulties were sought to be addressed at significant cost with the expectation that those difficulties would be resolved or with BHPTM considering other options (such as looking for a buyer with access to different technology and alternative business objectives for Beenup (see [74]) or the "transfer of assets into [BHPTM] to strengthen its balance sheet, and as a result, to assist with the servicing of the [Finance] debt" (see [79] above)). It was only in August 1999 that the directors of BHPTM reached the point that there were "no other options for improving the liquidity of [BHPTM]" (see [79] above). It was only on 20 August 1999, and no earlier, the directors of BHPTM advised Finance in writing of the future operations of BHPTM (see [80] above). The directors of Finance then met and after considering the letter of 20 August 1999 together with a presentation on the financial position of BHPTM from Mr Coburn (see [81] above) Finance took the steps that it did on 23 August 1999 (see [86] to [87] above). Finance's last advance to BHPTM was 30 June 1999. The Commissioner also contends that if the advances to BHPTM were made in accordance with BHPB Group decisions and processes, then the advances were inconsistent with the BHPB Group's decisions and policies about appropriate debt / equity ratios. In support of that contention, the Commissioner referred to the fact that BHPTM's debt / equity ratio was negative until 2001 and that BHPTM had negative shareholders' funds for many years requiring letters of comfort to enable it to operate as a going concern. The contention that the advances to BHPTM were inconsistent with the BHPB Group's decisions and policies about appropriate debt / equity ratios was based on the assumption that it was BHPB's usual practice to ensure that shareholder's funds of BHPB Group entities remained positive and that the debt / equity ratio would be no more than 80%. In fact, the evidence did not establish either assumption. As BHPM Taxation stated in 1996 when considering BHPDRI (see [38] above), "...the selection of a debt to equity ratio is a matter of choice" and "[t]he section should therefore take into account the intended purpose of the company". The facts and circumstances relevant to determining the appropriate levels will vary depending on the industry and the purpose of the company. The position BHPTM found itself in was unusual. As noted above (see [116]), steps were taken to address the difficulties it faced and to reverse the financial position of BHPTM. The fact is that none of those steps was successful. In these circumstances, it cannot be said that "each" loan to BHPDRI and BHPTM was an isolated transaction of a very special character undertaken by Finance at the behest of BHPB. (iii) BHPTM loan bad? Next, the Commissioner contends that the principal and interest owing in respect of the BHPTM loan in the 2000 year was not a bad debt when most of it was written off on 29 August 1999. The facts relevant to this issue are set out at [61] to [87] above. Two questions arise. First, when and how do you assess whether a debt is bad and secondly, was the BHPTM debt bad when it was written off? As the High Court said in G E Crane Sales Pty Ltd v Federal Commissioner of Taxation [1971] HCA 75 ; (1971) 126 CLR 177 , 194-195 with reference to the term bad debt, "[a] sum of money comes within the ordinary meaning of those words if it is owed to the taxpayer by some other person but is reasonably regarded as irrecoverable". The process of writing off "as bad debts amounts which are owing but which cannot be recovered" was described by Menzies J in the same case (at 187) as "a sensible commercial exercise and one to which taxation significance is naturally enough given". Put simply, whether a debt is "bad" is a question of fact: Dinshaw v Commissioner of Income Tax (Bombay) (1934) 50 TLR 527, 528. Finance submitted that in determining whether the BHPTM debt was bad when it was written off (23 August 1999), the Court is limited to considering the facts which existed at the time of write off --- in particular, a time when the 1999 comfort letter had been revoked. On the other hand, the Commissioner contends that the BHPTM debt could not then reasonably be regarded as irrecoverable and therefore bad because: had Finance demanded repayment before the 1999 comfort letter was revoked, it could reasonably be expected that BHPB would honour the undertaking made in the 1999 comfort letter to BHPTM and its directors; the BHPTM debt remained recoverable under the earlier comfort letters which were not affected by the revocation of the 1999 comfort letter; and if the BHPTM debt became irrecoverable (except to the extent of $11.5 million on deposit), it did so by Finance's own conduct in making or acquiescing in an arrangement with BHPB by which Finance demanded repayment of the BHPTM debt only after the 1999 comfort letter was revoked. In rejecting the Commissioner's contentions, it is unnecessary to articulate some general or universal rule about whether, in assessing if a debt was bad at the time it was written off, one is limited to the facts and matters at the time of write off or what Finance described as the "taxable facts": see Bailey v Federal Commissioner of Taxation [1977] HCA 11 ; (1977) 136 CLR 214 , 217 and Federal Commissioner of Taxation v Orica Ltd [1998] HCA 33 ; (1998) 194 CLR 500 , 531 and Federal Coke Co Pty Ltd v Federal Commissioner of Taxation [1977] FCA 3 ; (1977) 34 FLR 375 , 387. In my view, there can be no general or universal rule because the facts relevant to the question of whether or not a debt was bad when it was written off will vary from one case to another. In this case, it is necessary to bear steadily in mind that when Finance called for payment of the BHPTM debt on 23 August 1999, it was not paid and it was irrecoverable but for the deposit. To ask as the Commissioner's submissions require whether in other circumstances or at an earlier time the BHPTM debt might have been recoverable is beside the point. In any event, the matters referred to by the Commissioner do not factually or legally support the contention that at the time the BHPTM debt was written off it was not bad. The fundamental propositions which underpin the contentions of the Commissioner (see [122] above) are that: the 1999 comfort letter was enforceable and operated in favour of Finance as a form of guarantee; and despite revocation of the 1999 comfort letter, the earlier comfort letters either continued in existence or were revived. Both those contentions require consideration of the form and effect of the comfort letters. First, each of the comfort letters was binding as between BHPTM and its parent but created no rights in favour of Finance. The cases which have considered the enforceability of comfort letters appear to fall into one of two groups. The first common fact pattern is: (1) subsidiary seeks debt financing; (2) outside bank (not in-house financier) agrees to lend provided that comfort letter is given by parent; (3) letter is given to the bank; (4) subsidiary fails to pay; and (5) bank sues parent. Those cases, taken together, establish the proposition that letters in terms not dissimilar to the comfort letters in issue in these proceedings are equivalent to a guarantee as between the party to whom the letter is addressed and the issuing party: Newtronics Pty Ltd (rec & mgrs appd) (in liq) v Atco Controls Pty Ltd [2008] VSC 566 at [7] , [9]-[11] and [13]; Gate Gourmet Australia Pty Ltd (in liq) v Gate Gourmet Holding AG [2004] NSWSC 149 and the authorities referred to. These cases say nothing about whether the comfort letters created any rights in favour of Finance sufficient to have precluded it from writing off the BHPTM debt as bad. Each comfort letter expressly stated that it was not to be relied upon by any other person (see [66], [68], [71] and [77] above). But even in the absence of such a statement, what "rights" did Finance have as a result of the comfort letters that precluded it from writing off the debt as bad? The Commissioner did not identify any "rights" Finance had against BHPTM to compel BHPTM to take action against BHPB under or as a result of the comfort letters. If, as the Commissioner appeared to contend, they were "rights" Finance had to take legal action against BHPTM to recover the debt, those rights existed independent of the comfort letters. Such an action might have resulted in the winding up of BHPTM. If that were to occur, a liquidator of BHPTM would take whatever legal action (if any) he or she considered appropriate having obtained advice in relation to the circumstances which then existed. Whether that legal action would have included action against BHPB under the comfort letters (if those letters had been still in force at a relevant time) rises no higher than an educated guess. The second common fact pattern in the comfort letter cases is: (1) entity enters into transaction or publishes financial statements; (2) independent financial or legal adviser issues a comfort letter to the entity stating that it is satisfied that the financials are correct, preconditions for transaction are met or something along those lines; (3) letter contains disclaimer saying it is for the benefit of the addressee only and should not be relied upon by anyone else; (4) third party enters into transaction or purchases shares; and (5) it turns out preconditions are not met or financials were false; and (6) third party sues the independent adviser, claiming estoppel or tortious misrepresentation: see eg Dakota Bank v Eiesland , 645 NW2d 177 (Minn App 2002) and the authorities cited. The issue in those cases is usually whether, notwithstanding the disclaimer, the third party can make out a claim of reasonable reliance. This second group of cases also support Finance's contention that the comfort letters created no rights in favour of Finance. First, the letters were not written for the purpose of the Finance-BHPTM loan; rather, they were written for the purposes of the directors being able to sign the accounts. That is to say, there is no evidence that Finance relied on or was induced by the comfort letters in making the loans to BHPTM. That proposition was never put by the Commissioner in cross examination to Mr McGregor, a director of Finance. In fact, during the course of his cross examination, Counsel for the Commissioner asked Mr McGregor in the context of the debt owed by BHPTM to Finance "And as a director of Finance, you didn't consider demanding repayment from [BHPTM] while there was a letter of comfort from [BHPB]? His response was "I --- not that I recall. I am not sure of the relevance of the letter of comfort. " Counsel for the Commissioner did not identify any conduct which suggested, let alone established, that Finance relied on or was induced by the comfort letters in making any advance to BHPTM. Accordingly, it is not necessary to consider whether any reliance was reasonable and whether that should be determined as a question of fact or a question of law: Dakota Bank v Eiesland , 645 NW2d 177 , 182 (Minn App 2002). Secondly, even if Finance had an arguable case for establishing reasonable reliance on the comfort letters, the Commissioner as a fourth party to the letter cannot rely on it as establishing rights in favour of Finance sufficient to have required Finance to have concluded that the debt was not bad. Until there is a curial declaration, any promissory estoppel claim by Finance was only a mere equity: see Daly v Sydney Stock Exchange Ltd [1986] HCA 25 ; (1986) 160 CLR 371 , 387-90, Brennan J stating that a recipient of property pursuant to a contract the product of fraudulent misrepresentation does not become a constructive trustee until the transferor elects to avoid the contract (approved in Lonrho Plc v Fayed (No 2) [1992] 1 WLR 1 , 11-12); Bristol and West Building Society v Mothew [1998] Ch 1, 23, Millett LJ stating that for tracing purposes equitable title does not revest retrospectively on rescission to cause application of trust property that was then proper to be treated as a breach of trust; Giumelli v Giumelli [1999] HCA 10 ; (1999) 196 CLR 101 , 112, in a joint judgment, Gleeson CJ, McHugh, Gummow and Callinan JJ stating that a remedial constructive trust does not necessarily carry with it all of the fiduciary obligations of an express trust and can simply be akin to an order to convey identified property back to another. The Commissioner's technical case must therefore amount to the proposition that before Finance was entitled to write the BHPTM debt off as bad, (1) it had to actually bring an estoppel claim and test its validity; or (2) establish that a mere equity (ie a chose in action for estoppel without a curial declaration recognizing the equitable interest) held by Finance in the property of BHPB to the extent of the BHPTM debt was sufficient to prevent Finance from writing that debt off. Both propositions should be rejected. In the absence of other evidence (as was the position here), a contract (in this case the comfort letters) can rise no higher than its respective terms: see eg Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57 ; (2008) 251 ALR 322 , 346. The Commissioner's non-technical case (ie had Finance really wanted the money, BHPB would have paid) is equally difficult to accept. If such a submission were to be accepted, the effect would be that the form of all transactions between wholly-owned subsidiaries would be disregarded for tax purposes. That is because in any situation involving two wholly owned subsidiaries where one subsidiary cannot on its own meet an obligation to the other, the parent (assuming it is not itself insolvent) always can and will enable a subsidiary in difficulties to meet the obligation, regardless of any legal obligation on its part, provided that there is a commercial reason (ie benefit to the overall group) to do so. In that sense, therefore, no debt between two wholly owned subsidiaries is ever bad because, in the words of Mr Coburn, the parent will always "sort it out". I reject that contention. Having formed the view that none of the comfort letters created any rights in favour of Finance sufficient to have precluded it from writing off the BHPTM debt as bad, it is strictly unnecessary to go on to consider whether despite the revocation of the 1999 comfort letter, the other comfort letters either continued in existence or revived. It is sufficient for present purposes to note that each comfort letter was for a specified term (one or two years) or until it was revoked. Upon the happening of either of those events, each letter forthwith ceased to be of effect "except in respect of debts which exist[ed] before that time". It is at least arguable that the terms of each comfort letter supplanted the terms of the earlier comfort letter in relation to "existing debts" and any earlier comfort letter became irrelevant. Finally, when the 1999 comfort letter was revoked, it was replaced by a Deed of Support (see [82] --- [86] above. Again, that Deed did not create any rights in favour of Finance that precluded Finance from writing off the BHPTM debt as bad. Significantly, the Deed provided (in cl 6) that BHPTM and the directors of BHPTM (defined as the "Beneficiaries") released and discharged BHPB from any claim they might have, or might have had, against BHPB arising out of or connected with the 1999 comfort letter. For those reasons, the existence of none of the comfort letters precluded Finance from writing off the BHPTM debt as bad. Given the views I have formed about Finance's entitlement to claim the bad debts written off in the 2000 year as allowable deductions under s 25-35(1)(b), it is unnecessary to consider either of these alternate claims. However, in the expectation that this proceeding will be the subject of appeal, it is appropriate that I say something about each of them. It is sufficient if the loss was incurred in carrying on of a business for the purpose of producing assessable income: Federal Commissioner of Taxation v Munro [1926] HCA 58 ; (1926) 38 CLR 153 , 170. The Commissioner contended that both the BHPDRI loan and the BHPTM loan were not within the scope of s 8-1 because each was made "outside the scope of [Finance's] business" and each "was an isolated transaction of a special nature". For example, in relation to the BHPDRI loan it was said that the project, as a whole, had a higher risk level than the overall risk level of the BHPB Group. I reject these contentions. First, as discussed earlier (see [106] to [115]), each loan was within the scope of Finance's business. Moreover, neither was an isolated transaction of a special nature. As noted earlier, each investment was considered by the BHPB board in accordance with usual practice (see [18], [29] and [36] above), and once approved by the BHPB board, the funding of that investment was determined in accordance with BHPB's Accounting Policy Manual (see [19] above). That portion of the investment funded by Finance was subject to Finance's own standard terms and conditions which provided for Finance to generate a profit on the amount lent to the borrowing entity in each case (see [21] and [22] above). Each of the debts written off as bad was deductible because the act of lending money (subsequently written off) was for the purpose of producing assessable income for Finance: AGC (Advances) Ltd v Federal Commissioner of Taxation [1975] HCA 7 ; (1975) 132 CLR 175 , 197-198 and Magna Alloys & Research Pty Ltd v Federal Commissioner of Taxation (1980) 80 ATC 4582, 4551 and 4559. Put another way, money was Finance's stock in trade and loss of that money entitled Finance to an allowable deduction for that loss: Federal Commissioner of Taxation v Marshall & Brougham Pty Ltd (1987) 17 FCR 541 , 552-3. Contrary to the submissions of the Commissioner, it cannot be said that only another company in the group would derive assessable income as a result of Finance providing a loan to BHPDRI and a loan to BHPTM. It was Finance that lent the money, it was Finance that charged interest at a margin over the amount it itself paid for funds it borrowed and it was Finance that included the accrued interest on the amounts it lent in its assessable income: cf Hooker Rex Pty Ltd v Federal Commissioner of Taxation (1988) 88 ATC 4392 , 4403-4404; Commissioner of Taxation v E A Marr and Sons (Sales) Pty Ltd [1984] FCA 213 ; (1984) 2 FCR 326 and Federal Commissioner of Taxation v Total Holdings (Aust) Pty Ltd [1979] FCA 30 ; (1979) 79 ATC 4279 , 4283. Finally, the Commissioner contends that if each loss was made by Finance in gaining or producing assessable income, the claimed deduction should only be allowed in part. I also reject those contentions. Those contentions are not supported by the evidence. As the summary of facts records (see [26] to [60], [110] --- [113] above), the project was the subject of approval prior to its commencement and then subject to review at regular intervals. It is not in dispute that success of the HBI plant was expected to have benefited the BHPB Group as a whole. Moreover, the evidence does not support the conclusion that there was no reasonable prospect of BHPDRI repaying the interest and principal on the funds advanced at the time of the making of each advance ( Marshall & Brougham (1987) 17 FCR 541 , 549 per Bowen CJ) or that Finance continued to advance funds without reasonable prospect of repayment. As noted earlier, in 1995 the project had a payback period of 5 years and in 1997 the project was still forecasted to generate average net annual future cash flows of $557.1 million. The uncontroverted evidence of Mr McGregor was also important in a number of respects. First, that he was aware that the HBI project was expected to contribute to the overall BHPB Group profits and secondly, in his experience BHPB Group entities which contributed to overall profit were rewarded or compensated for such contribution by an internal cash flow adjustment. Further, not only were there capital injections (as recorded in the loan accounts) but there were also a number of reviews undertaken to assess the viability of the HBI plant. Finally, the decision to close the HBI plant came years after the debt was written off and as a result, at least in part, of events beyond the control of BHPDRI. What that history reveals is that Finance initially provided funds in circumstances where capital expenditure on the project had been approved by the BHPB board and it was expected that the HBI Plant would be successful. However, that did not and does not mean that there was no reasonable prospect of BHPDRI every repaying the interest and principal on the funds advanced or that Finance continued to advance funds to BHPDRI without reasonable prospect of repayment. There is no basis for apportionment. Consistent with the authorities referred to by the Commissioner ( Fairway Estates Pty Ltd v Federal Commissioner of Taxation [1970] HCA 29 ; (1970) 123 CLR 153 , 162 and Marshall and Brougham (1987) 17 FCR 541 , 549-50), the question which arises is whether each advance was "made as part of a business of money-lending then carried on by the taxpayer". It is important to recall that in this context, the taxpayer is Finance. As the summary of the facts reveals (see [61] to [87], [116] and [117] above), at the times specified by the Commissioner in [145] above (31 May 1996, 31 May 1998 and 31 May 1999), (1) the BHPB board continued to approve and support the operations; and (2) when the project experienced difficulties, either those difficulties were being addressed at significant cost with the expectation that those difficulties would be resolved or BHPTM was considering other options. Those options included looking for a buyer with access to different technology and alternative business objectives for Beenup (see [74]) and the "transfer of assets into [BHPTM] to strengthen its balance sheet, and as a result, to assist with the servicing of the [Finance] debt" (see [79] above). It was August 1999 before the directors of BHPTM reached the point that there were "no other options for improving the liquidity of [BHPTM]" (see [79] above). It was at that point (specifically, 20 August 1999) that the directors of BHPTM advised Finance in writing of the future operations of BHPTM (see [80] above), the directors of Finance met and after considering the letter of 20 August 1999 together with a presentation on the financial position of BHPTM from Mr Coburn, Finance took the steps that it did on 23 August 1999 (see [86] --- [87] above). In those circumstances, none of the facts and matters identified by the Commissioner (see [145] above) whether taken singularly or collectively support the contention that each advance was not made as part of Finance's business of money-lending then carried on by it. Finance's business had not changed. Finance's last advance to BHPTM was 30 June 1999. At all times, Finance provided and continued to provide funding to BHPTM in circumstances where it cannot be said each advance did not have a sufficient nexus with the earning of income or the conduct of Finance's business. As Williams J said in Tweddle v Federal Commissioner of Taxation [1942] HCA 40 ; (1942) 180 CLR 1 , 7, it is not the function of the income tax Acts or of the Commissioner "to dictate to taxpayers in what business they shall engage or how to run their business profitability or economically. The Act must operate upon the result of a taxpayer's activities as it finds them. ... [T]he Commissioner is not entitled to say [that a taxpayer] must close down the unprofitable business and cut his losses even if it might be better in his own interests and although it certainly would be better in the interests of the Commissioner if he did so". As in Tweddle , it is apparent that until Finance wrote off the debt as bad, Finance held a genuine belief (which it was entitled to hold) that the loan would be repaid in one of the ways outlined above. Finance was entitled, as it did, to rely upon the past success and expertise of BHPB and BHPTM. Each of these claims fails at the outset. They fail because an essential precondition to the operation of s 25-35(1)(a) in relation to each loan --- that all or any part of the sum written off as bad in the 2000 year comprised interest --- is absent. That requires some explanation. Finance returned interest income as it accrued and not on a receipts basis. From 1996 to 2000, the total BHPDRI interest income totalled $430,338,836. That fact is not in dispute. What is in dispute is the characterisation of (1) the amounts repaid under the loan before 3 May 2000; (2) the amount of $1,845,833,281 written off as bad on 3 May 2000 and (3) the amount not written off as at 3 May 2000 of $346,000,000. The answer lies in Finance's standard lending terms and, in particular, paras (f), (g) and (h) which are set out at [21] above. As those standard terms provide (and what in fact happened), each amount Finance advanced was a separate loan for a five month period: cl (b) and (h). At the end of each five month period, the total of the then existing loan (principal and interest) was rolled over into one new loan: cl (g). On each "roll over", the then existing outstanding principal and interest was replaced by a new loan comprising a principal advance equal to the total amount then outstanding. The interest owing at the end of each five month period was capitalised and formed part of the principal of the new loan. The fact and existence of a "new loan" at the start of each five month period is important. What existed at the end of the previous five month period was, by agreement, replaced by a new loan comprising one amount of principal. That conclusion is reinforced by the fact that the loan account numbers 325320 and 326320 were used on alternate five month periods with the loan balance of one account being reduced to zero before the entire sum then owing was relent as principal to BHPDRI using the other loan account. It is a novation: the annulment of one debt and the creation of a substituted debt in its place: Scarf v Jardine (1882) 7 App Cas 345 , 351 (per Lord Selborne), Re United Railways of Havana and Regla Warehouses Ltd [1960] Ch 52 , 84 and 86, affirmed in Tomkinson v First Pennsylvania Banking and Trust Co [1961] AC 1007 and Olsson v Dyson [1969] HCA 3 ; (1969) 120 CLR 365 , 388 (Windeyer J in dissent, but not on this point). Contrary to the express words of Finance's standard loan terms, Finance contends that the reference to "advance" in cl (f) of the standard terms does not include capitalised interest but refers simply to principal amounts lent by Finance to BHPDRI and, therefore, capitalised interest does not form part of the principal sum advanced: Bank of New South Wales v Brown (as official liquidator of Tom the Cheap (WA) Pty Ltd (in liq)) [1983] HCA 1 ; (1983) 151 CLR 514. Even if Finance's submission was correct (and I need not decide the issue), it provides no answer to the fact that at the end of each five month period, the DRI loan or loans of principal and interest during a five month period were replaced with a new advance of principal at the start of the next five month period. Any repayment in any five month period was, consistent with cl (f) applied to reduce, first, the opening outstanding advance and then any additional loans in that five month period in access of $50,000. In fact, the general ledger records the loan balance immediately prior to the write off as $2,173,637,557.88. The difference is attributable to an amount of capitalised interest for the period from 1 April to 3 May 2000 of $18,195,723.46 added to the loan balance on 3 May 2000 and recorded in the general ledger as being charged to the loan account after the write off. The question which then arises is whether there was any interest previously brought to account as assessable income and which was written off in the 2000 year to which s 25-35(1)(a) could apply? The answer is no. Consistent with the loan terms and the manner in which the BHPDRI loan was conducted, none of the capitalised interest previously brought to account as assessable income prior to 30 November 1999 was written off in the 2000 year. It had been repaid by BHPDRI or relent as principal by Finance to BHPDRI at the start of each five month rollover. Moreover, the amount written off on 3 May 2000 was, consistent with cl (f) of the loan terms, first applied to the amount of principal ($2,014,599,808) advanced by Finance to BHPDRI on 30 November 1999. None of that sum was interest. It was all principal lent by Finance to BHPDRI on 30 November 1999. In those circumstances it is unnecessary to characterise all or part of the amount not written off as bad as at 3 May 2000. That task is unnecessary because an essential precondition to the operation of s 25-35(1)(a) is that the debt be written off. This part of the debt was not. Section 25-35(1)(a) does not apply to any part of the BHPDRI loan. As with Finance's claim in relation to the BHPDRI interest, as at the date of write off (23 August, 1999), there was no sum of interest included in Finance's taxable income which remained unpaid. On 30 June 1999, a fresh advance of $336,394,327.20 was made by Finance to BHPTM. On 23 August 1999, $310,881,702.40 of that loan was written off. Consistent with the cl (f) of Finance's standard lending terms (see [21] above), the repayment (in this case, the writing off of the loan) was applied to reduce the earliest outstanding advance --- namely the advance on 30 June 1999 of $336,394,327.20. None of that amount comprised interest. In relation to the balance of the debt, it was not written off. Section 25-35(1)(a) does not apply to any part of the BHPTM loan. E. PART IVA APPLY TO DISALLOW TM BAD DEBT DEDUCTION? First, that the Commissioner has no power to seek to rely upon his s 177F determination because he did not issue an assessment or more accurately, an amended assessment, to give effect to that determination and secondly, even if he was entitled to seek to rely upon Part IVA, it does not apply. I will deal with the issues in turn. (a) Need an assessment to give effect to a determination under s 177F? An assessment to disallow Finance's bad debt deductions (deduction of $2,156,714,984 in relation to BHPDRI loan and BHPTM loan) was issued to Finance by the Commissioner on 23 June 2005. That assessment did not give effect to a Pt IVA determination. Finance objected to the assessment. Its grounds of objection were limited to contentions that it was entitled to a deduction under s 25-35 or s 8-1 of the 1997 Act. Unsurprisingly, Finance's grounds of objection did not address Pt IVA. On 8 June 2006, in the course of considering Finance's objection, the Commissioner proceeded to make a determination under s 177F(1)(b) of the 1936 Act. The Commissioner did not give effect to that determination by the issue of an amended assessment. Instead, he relied upon s 169A(3) of the Act. Was the Commissioner entitled to adopt that course? In my view, contrary to the submissions of Finance, the Commissioner was entitled, in the circumstances of this case, to rely upon s 169A(3) of the 1936 Act. First, the express words. (3) In determining whether an assessment is correct, any determination, opinion or judgment of the Commissioner made, held or formed in connection with the consideration of an objection against the assessment shall be deemed to have been made, held or formed when the assessment was made. So far as is relevant, s 169A(3) provides that "[i]n determining whether [the] assessment is correct, any determination ... of the Commissioner made ... in connection with the consideration of [the] objection against the assessment shall be deemed to have been made, held or formed when the assessment was made" (emphasis added). On its face, the effect of s 169A(3) is to deem the s 177F determination made by the Commissioner at the time he considered Finance's objection to have been made when the assessment was made, approximately one year earlier. Finance contends that, notwithstanding those express words, the Commissioner was not entitled to rely upon s 169A(3) and was required to issue an amended assessment to give effect to the s 177F determination. In particular, Finance submitted that: (1) the "assessment" in s 169A(3) only applies to original assessments made in circumstances contemplated by s 169A(1) and did not apply to the assessment in issue in these proceedings; (2) the phrase "determination, opinion or judgment of the Commissioner" was limited to "reviewable discretions" such as those under s 99A or the former s 80A of the 1936 Act (see Kolotex Hosiery (Australia) Pty Ltd v Federal Commissioner of Taxation [1975] HCA 5 ; (1975) 132 CLR 535 , 539-541 and 576); and (3) the phrase "in connection with" in s 169A(3) imposes not only a temporal requirement but also a requirement that the subject matter (in the present case, Pt IVA) be raised in the assessment the Commissioner was considering at the objection stage. I reject each of these limitations. As is self evident, s 169A(3) is not, in its terms, limited in any of the ways contended for by Finance. So much is conceded by Finance. It, instead, submits that such limitations should be implied by reference to the history and context of the introduction of s 169A, its interaction with Pt IVA (and, in particular, s 177G) and the general scheme of the taxing acts. None of those matters supports any of these limitations. Section 169A was inserted in the 1936 Act in 1986 as part of the first stage of self assessment: Taxation Laws Amendment Bill (No 1) 1986 (Cth) . At that time, it was a 'partial' self assessment system. Section 169A was "designed to facilitate 'self-assessment' of income tax returns by making it clear that the Commissioner ... [may] issue an assessment solely in reliance on the information in the taxpayer's return of income": Explanatory Memorandum, Taxation Laws Amendment Bill 1986 (Cth) (at 65) ("the 1986 EM"). The effect of the sub-section is to deem the exercise of any discretion by the Commissioner at the time of considering an objection against the assessment to have occurred at the time of making the assessment. (emphasis added by Finance). The fact that the 1986 EM refers to a "discretion" rather than the phrase "determination, opinion or judgment" found in s 169A(3) does not mean that the express words of the section are to be ignored. It is the words of the statute, not the 1986 EM which is to be construed: Saraswati v The Queen [1991] HCA 21 ; (1991) 172 CLR 1 , 22 (McHugh J); D C Pearce and R S Geddes, Statutory Interpretation in Australia (6 th ed, 2006) [2.12]. The further basis on which Finance sought to support the purported limitations was the subsequent enactment of the "later and fuller self assessment measure, namely s 166A, which created, for the first time, a general provision for deemed assessments upon the filing of income tax returns". Section 169A specifies that, in determining whether an assessment is correct, any determination, opinion or judgment of the Commissioner made or formed in connection with the consideration of an objection against the assessment is deemed to have been made or formed when the assessment was made. This provision preserves the Commissioner's right to exercise his discretionary powers . (emphasis added). Contrary to the submissions of Finance, the subsequent introduction of s 166A (and the Explanatory Memorandum which accompanied its enactment) do not support the implied limitations contended for by Finance. Both s 166A and 169A are in Pt IV of the 1936 Act headed "Returns and Assessments". If, at the time of the introduction of the "later and fuller self assessment measure" in s 166A, the parliamentary drafters had intended to limit the operation of s 169A in the manner contended for by Finance, you would have expected them to do so. They did not. Moreover, if the limitations sought to be imposed on s 169A by Finance were adopted, counsel for Finance were unable to identify any "determination" which the Commissioner could have "made, held or formed in connection with the consideration of an objection against the assessment" to which s 169A would have applied. In other words, if Finance's construction of s 169A were adopted, it would leave the word "determination" in s 169A(3) with no work to do. Such a result is highly unlikely and provides further support to reject Finance's contentions: D C Pearce and R S Geddes, Statutory Interpretation in Australia (6 th ed, 2006) [2.22]. Further, Finance submitted that having regard to the history and context of s 169A(3), the Court should depart from the plain words of the section: see McHugh J in Saraswati v The Queen (1991)172 CLR 1, 21-22. As I have stated earlier, neither the history nor the context of the section supports such a conclusion. Alternatively, Finance submitted that s 169A(3) should be construed as not applying at least to Pt IVA determinations. That limitation was said to arise from the language of Pt IVA itself and the decision of the Full Court of the Federal Court in Kolotex . I also reject those contentions. First, as was noted in Commissioner of Taxation v Jackson (1990) 27 FCR 1 , 18-19, the Commissioner after making a determination must take such action as he considers necessary to give effect to that determination. On occasion, no step may be required where, as here, the making of a determination did not have the effect of increasing the taxable income or tax payable under a previous assessment: see the Full Court of this Court in Commissioner of Taxation v Stokes (1996) 72 FCR 160 , 174 and Puzey v Commissioner of Taxation [2003] FCAFC 197 ; (2003) 131 FCR 244 , 265-66. In further support of the limitations contended for by Finance and identified earlier, Finance submitted if s 169A(3) applied in a case such as the present, the Commissioner would be able to circumvent the six year limitation period which existed in the relevant years in s 177G(1) of the 1936 Act: cf Woolcombers (WA) v Commissioner of Taxation (1996) 66 FCR 66, 73-74. That contention ignores the express words of s 169A(3). As noted earlier, s 169A(3) provides that "[i]n determining whether an assessment is correct, any determination, opinion or judgment of the Commissioner made, held or formed in connection with the consideration of an objection against the assessment shall be deemed to have been made, held or formed when the assessment was made" (emphasis added). The assessment is the critical starting point. Absent a valid assessment, the Commissioner cannot seek to rely upon s 169A(3). If the Commissioner has not issued a valid assessment, that is the end of the analysis. If the Commissioner has issued a valid assessment (whether an original assessment or an amended assessment) within any prescribed time limits, then any "determination, opinion or judgment of the Commissioner made, held or formed in connection with the consideration of an objection against the assessment shall be deemed to have been made, held or formed when the assessment was made" (emphasis added). Section 177G is not engaged. Although this issue does not arise on the facts in this case and is no longer relevant since the six year time limits for the application of Pt IVA were removed by the Tax Laws Amendment (Improvements to Self Assessment) Act (No 2) 2005 (Cth) Sch 1 Pt IV Div 3 Item 64, the construction I have adopted would have permitted the Commissioner to apply Pt IVA at the time he considered an assessment properly issued, even though the six year period had expired. Neither the scheme of the Act nor the express provisions of the 1936 Act support a contrary conclusion. As the Commissioner properly conceded, if the amount specified in the s 177F determination was more than or less than the amount in the assessment under consideration by the Commissioner, the Commissioner could not seek to rely upon s 169A(3) of the 1936 Act and would have been obliged to issue an amended assessment: s 177G of the 1936 Act. That is not surprising: eg Commissioner of Taxation v Stokes (1996) 72 FCR 160 , 174; McAndrew v Federal Commissioner of Taxation [1956] HCA 62 ; (1956) 98 CLR 263 , 278 and Woolcombers (WA) Pty Ltd v Commissioner of Taxation (1996) 66 FCR 66, 73 and 74. An increase or decrease in the amount included in the assessment, would require an amended assessment: See, eg, the definition of 'assessment' in s 995-1 of the 1997 Act; s 6-1 of the 1936 Act; Commissioner of Taxation v Stokes (1996) 72 FCR 160 , 174 and Commissioner of Taxation v Jackson (1990) 27 FCR 1 , 17-18. The express words of s 177G(1) (as it existed at the time of these issues) confirms that conclusion --- it prescribed the time limits by reference to "an amendment of an assessment". It did not limit the ability of the Commissioner to seek to raise other grounds to support the existing assessment. That last matter, the ability of the Commissioner to seek to uphold an assessment on a ground not dealt with in his objection decision, subject to questions of appropriate particulars and notice , is well established: Federal Commissioner of Taxation v Australian New Zealand Savings Bank Ltd [1994] HCA 58 ; (1994) 181 CLR 466 , 479 and Lighthouse Philatelics Pty Ltd v Commissioner of Taxation (1991) 32 FCR 148 , 154-155. It is a fundamental premise on which the taxing acts are based for three separate but related reasons. First, the process of assessment is concerned primarily with the amount payable by the taxpayer and not the particulars which go to establish such an assessment: Lighthouse Philatelics Pty Ltd at 154-155. Secondly, the objection is not against a particular in the assessment but as s 14ZL(1) of Pt IVC of the TAA provides, against the assessment itself: Lighthouse Philatelics Pty Ltd at 154-155. Thirdly, in considering an objection, the Commissioner is not confined to the matters raised by the taxpayer in that objection but has an obligation to administer the Act and "could form the view, based on a reconsideration of the matter, that the assessment should be confirmed for reasons which he had not previously considered. [The Commissioner's] task is to ensure that the correct amount of tax is paid ...": Lighthouse Philatelics Pty Ltd at 155. Questions of appropriate particulars and notice are important. They are important because Finance further submitted that if s 169A(3) permitted the Commissioner to make a s 177F(1)(b) determination at the time he considered the objection, Finance would lose the absolute right to object to the issues raised in that determination: cf Deputy Federal Commissioner of Taxation for New South Wales v Brown [1958] HCA 2 ; (1958) 100 CLR 32 , 40 (per Dixon CJ); MacCormick v Federal Commissioner of Taxation [1984] HCA 20 ; (1984) 158 CLR 622 , 639-641. The alleged loss of the absolute right to object was said to arise from the fact that unless a court orders otherwise, a taxpayer is limited to grounds stated in the objection to which the decision relates: s 14ZZO of the TAA. There are two complete answers to that submission. First, the Commissioner has an obligation to provide appropriate particulars and notice of any grounds upon which he seeks to support an assessment (see Bailey v Federal Commissioner of Taxation [1977] HCA 11 ; (1977) 136 CLR 214 , 217-218) and secondly, consistent with that obligation, the discretion for a court to permit a taxpayer to seek to rely upon grounds not stated in the objection to which the decision relates: s 14ZZO(a) of the TAA and Commissioner of Taxation v Jackson (1990) 27 FCR 1 at 18-19. That is what occurred in the present case. The Commissioner provided notice and particulars of his application of Pt IVA and the Court permitted Finance to seek to raise grounds of objection relevant to Pt IVA which, of course, had not been raised in its notice of objection. Construed in the manner I have identified, s 169A does not raise any of the four relevant considerations mentioned by Hill J in the context of Pt IVA determinations in Jackson at 18-21. A taxpayer would retain a right to object (see [175] above); a taxpayer would not lose its right to elect to refer the objection decision to the AAT or the Federal Court because the determination must be made by the Commissioner "in connection with [his] consideration of an objection against the assessment"; the assessment is not in fact amended so that no issue of side stepping time limits arises; and finally, no step is taken after the objection decision as it is the objection decision which is referred to the Court or the AAT: see ss 14ZZ(a)-(c) of Pt IVC of the TAA. In Jackson , the Court was concerned with events after the objection decision. No issue of that kind arises here. Finally, previous decisions of this Court have referred to s 169A(3). Although the outcome of none of the cases turned on the proper construction of s 169A(3), each court either adopted a similar construction or referred to s 169A(3) operating in the way I have described above: see Dan v Federal Commissioner of Taxation (No 2) (2000) 44 ATR 338 , 351 and, on appeal, Kordan Pty Ltd v Federal Commissioner of Taxation (2000) 46 ATR 191 , 198. Accordingly, the Commissioner was entitled to seek to rely upon the s 177F determination. Finance's contentions to the contrary are rejected. (b) Part IVA apply? The Commissioner contends that if the Court finds, as I have, that the BHPTM debt was bad and that the BHPTM loan was made by Finance in the ordinary course of a business of money lending or that the BHPTM claimed deduction was otherwise allowable under s 8-1, then the BHPTM claimed deduction was liable to be disallowed by the determination made pursuant to s 177F of the 1936 Act. The Commissioner concedes that his Pt IVA case has a narrow compass. It only arises if by reason of the 1999 comfort letter it could reasonably be expected that the BHPTM loan was recoverable by Finance. For the reasons set out above (see [124] - [132]), even if the terms of the comfort letters are equivalent to a guarantee between BHPB and BHPTM, none of the letters (including the 1999 comfort letter) created third party rights in favour of Finance. Moreover, even if the 1999 comfort letter had not been revoked, it could not reasonably be expected that BHPB would honour the undertaking made in the 1999 comfort letter to BHPTM and its directors. As the Commissioner conceded in his written submissions, the most obvious and simple commercial solution was what transpired --- the writing off of the debt by Finance. That result was not surprising. The alternatives for dealing with the failure of the BHPTM project each had their own difficulties, including legal difficulties. Three possibilities were suggested by the Commissioner: (1) that BHPB would provide funds by way of equity or loan to BHPTM for repayment of BHPTM's loan from Finance; (2) Finance could have released the debt before writing it off with the result that Finance would not have been entitled to a bad debt deduction; and (3) release of the debt before and not after revocation of the 1999 comfort letter. In support of the first alternative, the Commissioner sought to rely upon draft memoranda considering such an option. In relation to the third alternative, the Commissioner contends that if the debt was released before the revocation of the 1999 comfort letter, or without the revocation of the 1999 comfort letter, then the revenue deduction could not have been claimed because the debt would not have been bad. That possibility raises again questions about the enforceability of a letter of comfort by a third party. From a tax perspective, the Commissioner contends that the second and third possibilities would both result in the inability of Finance to write the debt off as bad and a resulting loss of capital that could only be set off against capital gains or transferred to group companies for that purpose. Each of these alternatives is rejected on separate grounds. The first possibility suggested by the Commissioner is contrary to the way in which the BHPB Group acted and, secondly, in the circumstances in which BHPTM found itself, likely to be contrary to provisions of the Corporations Law (as it then existed) and the directors' common law duties. The undisputed evidence of Mr McGregor was that he could not recall at any point BHPB (or for that matter another BHPB Group entity) subscribing capital to a non-viable company. That is not surprising. Directors as fiduciaries owe a duty not only to act in good faith but for the benefit of the company: Mills v Mills [1938] HCA 4 ; (1938) 60 CLR 150 , 185 (per Dixon J that "[d]irectors of a company are fiduciary agents, and a power conferred upon them cannot be exercised in order to obtain some private advantage or for any purpose foreign to the power"). In determining whether a director has breached his or her fiduciary duty in connection with a commercial transaction, the court in Charterbridge Corporation Ltd v Lloyds Bank Ltd [1970] Ch 62 , 74 stated the question was whether "an intelligent and honest man in the position of a director of the company concerned, could, in the whole of the existing circumstances, have reasonably believed that the transactions were for the benefit of the company". That test was adopted by Cole J in Spedley Securities Ltd (in liq) v Greater Pacific Investments Pty Ltd (in liq) (1992) 30 NSWLR 185 and by Hansen J in Farrow Finance Co Ltd (in liq) v Farrow Properties Pty Ltd (in liq) (1997) 26 ACSR 544 , but questioned by the Court of Appeal of the Supreme Court of New South Wales in Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 , where the court approached the issue by asking whether the directors were acting bona fide in the best interests of the company . In this respect it should be emphasised that the directors of a company in discharging their duty to the company must take account of the interest of its shareholders and its creditors. Any failure by the directors to take into account the interests of creditors will have adverse consequences for the company as well as for them. In the present case, it could not be said that the provision of funds by BHPB or another BHPB Group member (whether by equity or loan) was in the "whole of the existing circumstances" a transaction for the benefit of the entity providing the funding or its shareholders. BHPTM was non viable. Providing further funds by way of equity was not an alternative. Similarly, the third possibility was not an alternative. As the Commissioner conceded, it proceeds on the assumption that the 1999 comfort letter created rights in a third party. That contention was considered and rejected above (see [124]-[132]). As a result, even if the Commissioner's contentions that the events that took place on 23 August 1999 (see [82] to [87] above) were artificial and contrived were accepted (a matter I do not need to decide), Pt IVA of the Act would not apply because it could not be said that the debt was not bad in the absence of those steps. The second possibility --- that Finance could have released the debt before writing it off with the result that Finance would not have been entitled to a bad debt deduction --- is a misnomer. As the High Court said in Point v Federal Commissioner of Taxation [1970] HCA 7 ; (1970) 119 CLR 453 , if a debt is released, there is nothing to write off. As Owen J said in Point at 458 "[t]he effect of the release of a debt is to extinguish it, to put an end to its existence and not to reduce the value of it as an asset in the form of a debt owed to the taxpayer". Acceptance of this alternative would result in a situation where notwithstanding that a company in the business of lending money lent money in the ordinary course of that business and then lost that money, it is not entitled to claim a bad debt deduction, being a deduction otherwise provided for by the Act even though none of the steps of the scheme relied upon by the Commissioner altered the fact that the money was lost in circumstances where the deduction was available. As the applicants submitted, the question of the entitlement of a taxpayer to claim a deduction for a bad debt in the current circumstances and in the absence of any allegation that but for the scheme the deduction would not have been available is a matter for the legislature, not the Commissioner. The fact that Finance chose what the Commissioner conceded was the "most obvious and simple commercial solution" --- writing off the debt after it was bad and not the uncommercial step of simply forgiving the debt --- does not of itself attract the application of Pt IVA. For those reasons, I do not consider that Pt IVA applies in the terms contended by the Commissioner. There is little doubt that the steps in the scheme identified by the Commissioner (namely what transpired on 23 August 1999) were calculated, systematic and taken after obtaining the necessary advice. The fundamental flaw in the Commissioner's case is that the steps in the scheme did not alter the fact that the BHPTM debt was bad and was a debt that Finance was entitled to write off as bad whether the steps in the scheme identified by the Commissioner were taken or were not taken. In those circumstances, Div 243 provides for an additional amount to be included in a taxpayer's assessable income at the termination of a limited recourse debt arrangement: s 243-10. As s 243-10 goes on to provide "[t]he reason for the adjustment is to ensure that, where [a taxpayer has] not been fully at risk in relation to an amount of expenditure, [the taxpayer does] not get a net deduction if [it fails] to pay that amount". This issue concerns capital allowances claimed by BHPDRI as follows. (emphasis added). Each of the italicised phrases is defined in the 1997 Act. "Limited recourse debt" is defined in s 243-20. Sub-sections (1) and (2) are relied upon by the Commissioner. (2) An obligation imposed by law on an entity (the debtor ) to pay an amount to another entity (the creditor ) is also a limited recourse debt if it is reasonable to conclude that the rights of the creditor as against the debtor in the event of default in payment of the debt or of interest are capable of being limited in the way mentioned in subsection (1). (6) Also, an obligation that is covered by subsection (1), (2) or (3) is not a limited recourse debt if, having regard to all relevant circumstances, it would be unreasonable for the obligation to be treated as limited recourse debt. (7) A *limited recourse debt is a non-arm's length limited recourse debt if the debtor and creditor do not deal with each other at arm's length in relation to the debt. (emphasis in original). (emphasis in original). Section 243-40 provides that "[t]he debtor's assessable income for the income year in which the termination occurs is to include the excess referred to in subsection 243-35(1)". It does not apply in years subsequent to the year in which the debt is terminated. (2) That the amount unpaid at the time, or at the end of the period, is reduced by any amounts paid under a replacement debt. (3) The debtor's *capital allowance deductions in respect of the expenditure or the *financed property were increased by the amount of the capital allowance deduction referred to in subsection (1) of this section. (3) The deduction is to be reduced by the amount of the excess. Finally, s 243-25(1) sets out the circumstances in which the debt arrangement is terminated. For present purposes, it is sufficient to note that s 243-25(1)(g) provides that a debt arrangement is terminated if the debt becomes a bad debt. As noted earlier, this issue only concerns the loan from Finance to BHPDRI. The second issue (that the debt arrangement was terminated) is not in dispute. As a result, the critical issue is whether the loan from Finance to BHPDRI was "limited recourse debt" within the meaning of ss 243-20(1) or (2). It is to that issue that I now turn. As early as 1857, the concept of limited rights of recovery by a mortgagee against a mortgagor was considered by the Courts of Exchequer: Mathew v Blackmore [1857] EngR 262 ; (1857) 156 ER 1409. In that case, a plaintiff brought an action to recover a sum of 200 l lent by him to the defendant secured by a mortgage of certain lands. The plaintiff argued that the loan involved in it a liability to pay and subjected the borrower to an action of debt and that the mortgage --- a charge upon the land to secure the debt --- did not affect the right of the lender to sue the borrower for the whole of the debt. Pollock CB rejected the plaintiff's argument. ... and the presence of [a] covenant whereby the defendant covenanted to pay not absolutely but only out of such monies as should come to his hands, coupled with the fact that he was a mere trustee and had no personal interest in the transaction, shewed that it was never intended to create, as between him and the plaintiff, the relation of creditor and debtor as upon a simple loan of money. By contrast, non-recourse or limited recourse debt limits the creditor to the recovery of specified security. The creditor is not entitled to seek repayment from the borrower should the proceeds from the disposition of the security be less than the total indebtedness. (emphasis added). As it is a question of contract, it has no prescribed form. It depends upon what the parties have agreed or, in the modern world as the following cases illustrate, the creativity of those who put together financing packages and arrangements: see by way of example, Esanda v Burgess [1984] 2 NSWLR 139 ; NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 , 489F; Guest v Federal Commissioner of Taxation (2007) 65 ATR 815, 819 at [11]; R v New Queensland Copper Co Ltd [1917] HCA 34 ; (1917) 23 CLR 495 , 496, 501-2 (where the Queensland Government advanced money to a mining company that was to be "repaid out of the profits which shall hereafter be derived by or accrue to the company from the working of the said mines" and was therefore unable to seek to recoup the debt from the assets of the company); Federal Commissioner of Taxation v Sidney Williams (Holdings) Ltd [1957] HCA 1 ; (1957) 100 CLR 95 , 115.7; Inland Revenue Commissioners v Herdman [1969] 1 All ER 495; Federal Commissioner of Taxation v Firth (2002) 120 FCR 450 , 468 and Malouf v Federal Commissioner of Taxation [2008] FCA 497 ; (2008) 68 ATR 470 , 477. It is therefore not surprising that the drafters of Div 243 sought to define the phrase "limited recourse debt" and to define it in the way that they did. The issue is whether the loan from Finance to BHPDRI satisfied one or both of the drafters' definitions of "limited recourse debt". In my view, it did not. The focus of s 243-20(1) is, first, to identify the existence of an obligation imposed by law on an entity (defined as the debtor) to pay an amount to another entity (defined as the creditor). In the case of BHPDRI, Finance's standard terms (see [21] above) provided, in part, that: Loans are to be made up of such amounts and are to be advanced on such dates as are agreed orally from time to time by the borrower and [Finance]. Each initial loan and each additional loan is to be for a period not exceeding five months at which time all loans shall become immediately repayable . The Commissioner does not dispute the existence of this obligation on BHPDRI to repay to Finance the amounts advanced to or drawn down by BHPDRI together with any interest accrued on those amounts. Having identified that obligation of BHPDRI to pay an amount to Finance, s 243-20(1) then requires identification of the "rights of the creditor" (Finance) "against the debtor" (BHPDRI) "in the event of default in payment of the debt or of interest" by BHPDRI. In the case of BHPDRI, Finance's standard terms (see [21] above) were silent. Put another way, the standard terms did not address the rights of Finance against BHPDRI in the event of default directly or indirectly. For that reason alone, it cannot be said that the rights of Finance against BHPDRI in the event of default were "limited wholly or predominantly" to any of the matters listed in sub-paragraphs (a) to (c) of s 243-20(1). Moreover, as a matter of contract, there is no basis for the implication of a term in the contract between Finance and BHPDRI limiting the rights of Finance wholly or predominantly to any of the matters listed in sub-paragraphs of s 243-20(1): BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 , 283. Those sub-paragraphs of s 243-20(1) list what might be described as the common or more usual forms of limited recourse debt including: (a) rights in relation to the debt property or use of the debt property; (b) rights in respect of a mortgage or other security over the debt property or other property; and (c) rights arising out of any arrangement relating to the financial obligations of an end user of the financial property towards the debtor. Property is "debt property" if it is the "financed property" or the property provided as security for the debt: s 243-30(3) (see [199] above). Property is "financed property" if the debt was used wholly or partly to finance or refinance expenditure "on the property" or "on the acquisition of the property", or that "results in the creation of the property or is otherwise connected with the property": s 243-30(1) (see [199] above). Finance's rights in the event of default were not so limited. Finance's standard terms did not limit "wholly or predominantly" the rights of Finance against BHPDRI in the event of default to any of the matters listed in sub-paragraphs (a) to (c) of s 243-20(1). BHPDRI's obligation to Finance was unlimited except as to the amount of the debt or interest. Finance had a right to call for repayment of the principal and any interest that had accrued, to sue on the promise of repayment in the standard terms and then to prove with other unsecured creditors in the event of a winding up of BHPDRI: s 555 of the Corporations Act ; Federal Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20 ; (2005) 220 CLR 592 , 612-13 and Federal Commissioner of Taxation v Macquarie Health Corporation Ltd (1998) 88 FCR 451 , 472. An unsecured creditor has no interest in or right to specific assets: Macquarie Health Corporation at 472. Contrary to the conclusion I have reached, the Commissioner contends that s 243- 20 (1) "aptly describes the situation which existed as between BHPDRI and Finance". First, the Commissioner contends that the noun "rights" when it first appears in s 243- 20 (1) must be limited to the rights in paras (a) to (c) and that the rights listed in those paragraphs need not contain any further limitation and, secondly, consistent with that construction of s 243- 20 (1), Finance's practical rights of recovery or recourse against BHPDRI were wholly or at least predominantly limited to BHPDRI's assets at the HBI plant at Boodarie. The express words of Div 243 (and, in particular s 243- 20 (1)) (see [198] above) do not support the Commissioner's construction. Moreover, if the construction contended for by the Commissioner were adopted it would lead to two absurd results. First, that one would assess whether a debt was a limited recourse debt not at the time that the loan was made or relevantly varied but when a project fails and secondly, that the debt of every unsecured creditor, regardless of the contractual arrangements between the parties, would be treated as "limited recourse debt". Those results cannot be and were not the results intended by Parliament. Read as a whole, it is apparent that the definition of limited recourse debt in s 243- 20 (2) was intended to expand the concept beyond those recorded in contractual arrangements between a debtor and a creditor. If the Commissioner's construction were adopted then much if not all of s 243- 20 would be superfluous. Parliament could have simply referred to any arrangement where a project fails and the debtor does not repay the advance. That is not what occurred. If further support for that conclusion is necessary (and I consider that it is not), it is to be found in the scheme of Div 243 as a whole. As noted earlier, it applies to cancel capital allowance deductions claimed by a taxpayer and include the value of those deductions in the assessable income of the taxpayer when the relevant debt arrangement is terminated. Assessment of whether or not the Division might potentially apply to a particular arrangement should be able to be assessed at the time of the original capital allowance deduction, not simply if and when a project fails for whatever reason. Moreover, even if the Commissioner's construction were adopted (and I do not adopt it), there is some doubt about the accuracy of the factual premise in the present case. Namely, that Finance's practical rights of recovery or recourse against BHPDRI were wholly or at least predominantly limited to BHPDRI's assets at the HBI plant at Boodarie. A list of the property of BHPDRI was tendered in evidence and included licences and intellectual property. It was by no means clear that all of that property was located at or connected with the plant at Boodarie. As noted above (see [197] --- [199] and [212]), it is a defined term. Property is "debt property" if it is "financed property" and property is "financed property" "if the expenditure referred to in s 243-15(1)(a) is on the property, is on the acquisition of the property, results in the creation of the property or is otherwise connected with the property": s 243-30. What is the "expenditure" to which s 243-15(1)(a) is referring and what is the "property" to which s 243-30 is referring? The answer to the first question is straightforward. "Expenditure" appears twice in s 243-15(1) in subsections (a) and (c). Those subsections direct attention to two matters. First, whether limited recourse debt has been used to wholly or partly finance or refinance expenditure (sub-s (a)) and, if so, whether the debtor can deduct an amount as a capital allowance (under Div 40) in respect of that expenditure or the financed property (sub-s (c)). Having regard to the views that I have formed about the absence of limited recourse debt (see [205] to [218] above), there can be no "financed property". However, if I am wrong in my conclusion about the nature of the Finance / BHPDRI loan facility not being limited recourse debt, in my view the taxpayers have failed to establish that the property on which the funding was expended was not "debt property". Put another way, the taxpayers failed to identify the source of funding to acquire the property: see ss 14ZZO(b) of the TAA; Federal Commissioner of Taxation v Dalco [1990] HCA 3 ; (1990) 168 CLR 614 ; Australian and New Zealand Savings Bank Ltd v Federal Commissioner of Taxation [1992] FCA 493 ; (1992) 92 ATC 4630. That conclusion requires some explanation. The applicants do not dispute that the quantum of capital expenditure on the assets of BHPDRI was recorded in the books of account of BHPDRI and totals approximately $2.16 billion for the period from 1 June 1995 to 30 June 2000.. However, it is also common ground that that total is somewhat misleading because it includes amounts capitalised for accounting purposes that were not the subject of a capital allowance under Div 40 and does not include amounts which gave rise to capital allowances under Div 40 but which were not capitalised for accounting purposes. The difficulty faced by the applicants in the present case is that the property of BHPDRI acquired by BHPDRI during the period from 1 June 1995 to 30 June 2000 was funded by the loan from Finance and from subscriptions of equity. The applicants submitted that because the property was acquired from "multiple funding sources" it was necessary to compare the change in debt funding of the company during the period in which the expenditure on that property was incurred with the amount of that expenditure. An example of this arises in June, July and August 1995. In those months capitalised expenditure totalled $18,774,979. At that time, [BHPDRI] had available to it $20,000,000 share capital, and the only other expenses [BHPDRI] incurred in that period totalled $162,901. ... None of the assets acquired by this expenditure was debt property because it cannot be concluded that any of that expenditure was financed by debt, limited recourse or otherwise. One only has to state the proposition to realise the flaws in it. First, there was no and could be no direct correlation between debt funding and expenditure on a month to month basis. Funds could have been supplied in one month from one source and used months if not years later. Moreover, the total capital expenditure recorded in BHPDRI's books of accounts (subject of course to the difficulties identified earlier) was in excess of $2 billion. The applicants do not and cannot dispute that the total BHPDRI --- Finance debt by the 2000 year had reached in excess of $2.1 billion. At the same time, the total of the other funding sources (whether by equity contributions or otherwise) did not exceed $500 million. Thirdly, contrary to the applicants' submissions, s 243-15(1)(a) requires that the debt be used to "wholly or partly" finance or refinance the expenditure. And, fourthly, the concept of expenditure and property is itself expanded in s 243-30(1) which provides that property is the financed property if the "expenditure" referred to in paragraph 243-15(1)(a) is "on the property, is on the acquisition of the property, results in the creation of the property or is otherwise connected with the property". In the present case, the applicants concede that there probably was expenditure entirely funded by debt in some months (eg September and October 1995) but do not identify or even attempt to identify the capital expenditure and, in particular, the nature of the property acquired. This form of analysis is, in my view, necessary because of the expanded definition of expenditure in s 243-30(1). That section directs a broad enquiry beyond a mere identification of the property to consideration, inter alia , of expenditure on items otherwise connected with the property. That enquiry is made all the more difficult in the present case, because the "property" in the most general terms consists of numerous items of plant and equipment as well as allegedly personal items of property, some or all of which comprise the HBI plant. On the basis of the current evidence, one can infer from the amount and timing of the debt funding, the quantum of the capitalised expenditure on the assets of BHPDRI recorded in the books of account of BHPDRI, the asset register of BHPDRI and the timing of that expenditure, that the debt funding has been used to wholly or partly finance or refinance expenditure (sub-s (a)) and that BHPDRI did deduct an amount as a capital allowance (under Div 40) in respect of some of that expenditure or the financed property: ss 243-15(1)(a), (1)(c). On no view is it possible for those amounts to be quantified with any precision. Although I have ultimately decided the question on the basis that the applicants failed to discharge their onus, the answer may in fact lie elsewhere. On one view, the dilemma faced by the applicants supports the construction of Div 243 that I have adopted --- Div 243 was never intended to apply to arrangements such as those the subject of these proceedings. The alternative is that taxpayers claiming capital allowances under Div 40 should be in a position to identify each capital allowance, the source of funding for each capital allowance and the inter-connectedness (if any) between items of expenditure. I can only suspect that the applicants did not undertake that or a similar exercise in the present case because such an exercise was not only expensive but would have inevitably lead to the conclusion that the debt funding had been used to wholly or partly finance or refinance expenditure and that BHPDRI did deduct an amount as a capital allowance (under Div 40) in respect of some of that expenditure or the financed property: ss 243-15(1)(a), (1)(c). BHPB conceded that s 243-20(2) extends the definition of "limited recourse debt" (see [198] above). The language of s 243-20(2) is important and should be restated. It builds on subsection (1). (emphasis added). Subsection (2) is clearly intended to catch those debts which bear no existing legal limitation of the kind specified in subsection (1) but where "it is reasonable to conclude that the rights" in the event of default are "capable" of being limited to those rights specified in sub-s (1). As the applicants submitted, subsection (2) is intended to catch those arrangements which have the capacity to bring about the limitation described in sub-s (1). The form of that capacity is, unsurprisingly, broad and extends, for example, to "any *arrangement to which the debtor is a party". It is an objective test. Whether the capacity of the kind described exists is, of course, a question of fact to be resolved having regard to the matters listed in paragraphs (a) to (d) of sub-s (2). As the earlier analysis of the cases dealing with limited recourse debts demonstrates there is no and can be no prescribed form for such arrangements. However, I do not consider that s 243-20(2) adopted or incorporated a test of economic equivalence (such as that adopted in Div 974 of the 1997 Act). That was the substance if not the form of the Commissioner's submissions --- that the section necessitates an assessment of whether more than 50% of the property owned by the debtor is related to property acquired with the relevant loan proceeds. If that were the correct approach (which I reject) the result would be that funding arrangements at the start of a business would be limited recourse within Div 243 and would then fall in or out of the division depending on whether the venture was a success or a failure. The terms of the funding arrangements (whether limited in the sense of sub-s (1) or considered more broadly under sub-s (2)) would simply be irrelevant. That is not consistent with the express words of the section. If the drafters had intended the issue to be approached in that manner, they would have said so. They did not. Moreover, the express words of sub-s (2) are themselves inconsistent with a test of economic equivalence. Under sub-s (2), one of the matters to consider in deciding whether the specified limitation is "capable" of being limited in the manner described is "whether all of the assets of the debtor would be available for the purpose of the discharge of the debt": s 243-20(2)(c). In my view, that matter is not a factor or pointer in favour of the section adopting or incorporating a test of economic equivalence. On the contrary, consistent with sub-s (1) and the evident purpose of the legislature to seek to define "limited recourse debt", it is to be inferred that where all of the assets of the debtor are available for the purpose of the discharge of the debt (other than assets that are security for other debts of the debtor or any other entity) that would be a factor supporting the conclusion that the rights of the creditor against the debtor in the event of default were not capable of being limited in the manner specified. The interaction between Div 243 and Div 245 provides further support for the rejection of the proposition that s 243-20(2) adopted or incorporated a test of economic equivalence. Div 245 in Schedule 2C of the 1936 Act was inserted in the tax legislation to address a "structural weakness": Second Reading Speech to the Taxation Laws Amendment Act (No 2) 1996 . Prior to the introduction of Div 245, on forgiveness of a debt a creditor was entitled to a bad debt deduction or a capital loss and the debtor would continue to be entitled to deduct losses accumulated before the debt was terminated and to claim capital allowance deductions for expenditure funded by the forgiven debt. In other words, both the debtor and the creditor enjoyed a deduction for the same economic loss in relation to a bad debt. That "weakness" was addressed by Div 245. In fact, in the present case, BHPDRI applied Div 245 when it lodged its returns to the bad debt written off by Finance. On the other hand, Div 243 (introduced some three years later) is not concerned with or directed to the economic benefit to a taxpayer if a debt is forgiven. Div 243 is directed to the specific case where a taxpayer is not personally at risk in relation to borrowed funds used to finance an item of capital. In general terms, the measures were introduced to address not a case of double deductions for the same debt (by two different taxpayers) but the situation where a taxpayer obtained deductions greater than the total amount outlaid by that taxpayer in relation to capital expenditure under hire purchase or limited recourse debt arrangements primarily in cases where the balance of an outstanding debt that had financed the expenditure was not paid and the financier could only recover a specific asset on termination of the finance arrangement: paras 2.6-2.9 of the Explanatory Memorandum to Taxation Laws Amendment Bill (No 5) 1999 (Cth). The preconditions to the Division applying set out in s 243-15(1) are not satisfied. Limited recourse debt was not used to wholly or partly finance or refinance expenditure. However, if I am wrong in reaching the conclusions set out above, I do not consider that the position adopted by any of the taxpayers was not "reasonably arguable". It is common ground that whether a matter is "reasonably arguable" is a question to be determined objectively: Walstern v Federal Commissioner of Taxation [2003] FCA 1428 ; (2003) 138 FCR 1 , 26; Pridecraft Pty Ltd v Federal Commissioner of Taxation [2004] FCAFC 339 ; (2004) 213 ALR 450 at [108] - [109] ; Federal Commissioner of Taxation v R & D Holdings Pty Ltd [2007] FCAFC 107 ; (2007) 160 FCR 248 , 260-61 and Cameron Brae Pty Ltd v Federal Commissioner of Taxation [2007] FCAFC 135 ; (2007) 161 FCR 468 , 488. A reasoned argument was and can be made to support the contention that the various substantive tax laws should apply in the manner contended for by the applicants. In relation to Div 243, the position is far stronger --- this was the first decision concerning that division. Instead, I will direct the parties to confer and jointly file short minutes of proposed orders giving effect to these reasons by 4:00 pm on 3 April 2009. If the parties are unable to agree, they are to submit a joint statement by 4:00 pm on 3 April 2009 identifying: (1) the point(s) of agreement; (2) the point(s) of disagreement; and (3) the respective positions of the parties on the point(s) of disagreement, in which case I will list the matter for further directions or hearing as necessary. If further directions or hearing are sought, the parties should consult amongst themselves and then contact my chambers with a list of mutually agreeable dates and an estimated time required for the proposed directions or hearing. BHP Australia Coal Pty Ltd 2,711.0 4,606.0 Coal mining, minerals exploration and manager BHP Direct Reduced Iron Pty Ltd - 54.7 Development of HBI plant BHP Engineering Pty Ltd 23.7 22.5 Engineering service company BHP Information Technology Pty Ltd 27.6 21.4 Information Technology manager for the BHP Group and supply of computer services BHP International Holdings Limited 6.2 10.3 Holding company and China representative office (Australian resident) BHP Iron Ore Pty Ltd 2.8 22.2 Provided Management and Marketing services to the Australian Iron Ore business. BHP Iron Pty Ltd 15.3 - Holds leases relating to the Goldsworthy Joint Venture and iron ore mining. BHP Materials Pty Ltd 99.8 - Steel Trading company for Steel activities. It initially marketed redundant equipment on behalf of the Steel Group. Also involved in diverse activities such as timber importation. BHP Minerals Pty Ltd 433.9 704.5 Iron ore and coal mining company BHP Petroleum Pty Ltd 3,921.4 5,775.4 Management company BHP Petroleum (Bass Strait) Pty Ltd 30.3 60.0 Supplier of Oil and Gas from Bass Strait as part of the Esso/BHP Joint Venture --- Hydrocarbons, exploration, development and marketing. BHP Queensland Coal Limited 2.9 - Coal Mining activities in Queensland. BHP Rail Products Pty Ltd 1.9 - Based in both Adelaide and Whyalla, this company produced and marketed steel rail sleepers and the fasteners that attach the rails to the sleepers. Marketed under the TrakLok Brand. BHP Refractories Pty Ltd 65.7 82.8 Manufacture and installer of refractory (brick) linings for use in the repair or construction of furnaces and ladles. The material was used primarily in steel blast furnaces and smelting operations. BHP Steel (AIS) Pty Ltd 965.9 2,237.3 Involved in coal mining, coke making, sinter production, Iron and Steelmaking and the casting of steel into slabs and the rolling of slabs into plates (for ship building) and hot strip coils for use in coil plate, tinplate and black plate manufacture. BHP Steel (JLA) Pty Ltd 409.2 818.0 Acquires slabs and hot strip from BHP Steel (AIS) Pty Ltd and rolls the material (roll forming) into longer flat material which is then coated as zincalum or colourbond products. BHP Transport Pty Ltd 334.7 351.4 BHP Transport owned and operated a fleet of ships to service BHP's import and export businesses. This company also chartered ships as part of its mandate to provide transport services. BHP Titanium Minerals Pty Ltd 39.6 188.8 Titanium minerals mining and holding company. Groote Eylandt Manganese Sales Pty Ltd 15.5 10.5 Marketing company for Manganese ore. Participated in the Elkem joint venture for the processing of manganese ore in Norway. Groote Eylandt Mining Co Pty Ltd 94.7 225.3 Mining and sale of Manganese Ore a feed product for ferro manganese production. The manganese ore is further processed within the Group by Tasmanian Electro Metallurgical Company Pty Ltd. Pilbara Energy Pty Ltd 26.8 114.9 Power Generation to provide gas based electricity generation into the Port Hedland area where BHP operated the Nelson Point and Finucane Island iron ore processing and shiploading operations. Queensland BHP Steel Pty Ltd - 5.1 It transformed steel billets by rolling them into products required by the market in South Eastern Queensland. Products included rods used in concrete construction activities and steel bars. Tasmanian Electro Metallurgical Co. Pty Ltd 29.8 20.3 Ferro alloy manufacturer and marketing. Tubemakers of Australia Limited - 202.2 Manufacture of steel pipe and tube and merchandising of Steel products. | deductions bad debt claims business of lending money conduct undertaken in the ordinary course of business of lending money taxpayer, internal financier to a group of companies income tax assessment act 1997 (cth), ss 25 35 (1)(b), (1)(a), 8-1 commissioner's power to made a determination under s 177f without issuing an assessment income tax assessment act 1936 (cth), s 169a income tax assessment act 1936 (cth), part iva limited recourse debt debt property in limited recourse debt income tax assessment act 1997 (cth), div 243 taxation taxation taxation taxation |
The amended relief claimed is set out in a minute of proposed orders: An order in the nature of certiorari that the second respondent's decision of 19 March 2009 to release the first respondent on bail be quashed. An order in the nature of mandamus directed to the second respondent to consider and determine the first respondent's application for bail according to the law. The application is supported by an affidavit sworn by Mr Steven Murray Shadgett, a solicitor employed as a senior legal officer in the Perth office of the Commonwealth Director of Public Prosecutions. It is convenient to set out the background as appears from the affidavit of Mr Shadgett, which is uncontroversial in these respects. The alleged offences are, accordingly, very serious in nature. Poland is, by virtue of s 5 of the Act and regulation 3 of the Extradition (Poland) Regulations 1999, an extradition country. On 7 January 2009, the Minister for Home Affairs, the Honourable Robert Debus, signed a 'Notice of Receipt of Extradition Request' ("the Notice") on 7 January 2009 under s 16(1) of the Act. A provisional arrest warrant under s 12(1) of the Act was issued by Magistrate Malley at Perth on 6 March 2009 for the arrest of the first respondent. The first respondent was arrested in Hamersley, Perth Western Australia, by Australian Federal Police on Monday 9 March 2009, and was remanded in custody under s 15 of the Act in Perth Magistrates Court on the same day. There was no application for bail made. The first respondent was represented by the Legal Aid duty lawyer and the counsel for the Republic of Poland was advised a bail application would be made on 16 March 2009. An application for bail was made by counsel on behalf of the first respondent in the Perth Magistrates Court on 16 March 2009 before the second respondent. Counsel for Poland opposed the application. Reliance was placed by the first respondent upon a document dated 2 January 2009, the translation of which purported to be written notice from the Polish Prosecutors Office to the first respondent advising him of the revocation of an arrest warrant that had been in existence in relation to him. The second respondent reserved his decision and adjourned the bail application to 17 March 2009. The first respondent was remanded in custody. On 17 March 2009, the second respondent further adjourned the matter for further consideration. On 19 March 2009, the second respondent granted the first respondent bail. The ever present risk of flight in extradition situations was the rationale for the "special circumstances" requirement of s 15(6) of the Act [107]. Such a provision is considered necessary because experience has shown that there is a very high risk of persons sought for extraditable offences absconding. In many cases the person is in Australia to avoid arrest in the country where he is alleged to have committed the offence, ie the person left the jurisdiction to avoid justice. First, Australia's international relations and standing are involved in extradition cases. They are seldom involved in domestic criminal cases. Secondly, the Court must take account of the purpose and policy of the Act. It would be a serious error to take the view that the enactment of the Act has no bearing on the application of the Court's incidental power to make an order granting bail to a person held under a s 19(9)(a) warrant [55]. That enactment cannot alter the power implicit in s 73 of the Constitution . But it can affect its application to the circumstances of the particular case. That is because the provisions of the Act illuminate the object of the proceedings that give rise to the application or appeal to this Court. The Parliament has made it plain that bail is not to be granted unless special circumstances are proved. However unpalatable such a conclusion may be to the mind of the common lawyer, the Parliament believed that the fulfilment of Australia's treaty obligations makes the principles governing bail in domestic cases inapplicable in extradition cases. In extradition cases, the general rule is that defendants are to be held in custody whether or not their detention is necessary. Only when there is something special about a defendant's circumstances can the question of bail be considered. For that reason, it is erroneous to take into account "those circumstances which ordinarily would fall for consideration on an application for bail where a person is charged domestically for the commission of a crime". Those circumstances may be taken into account in considering the exercise of discretion after special circumstances have been established. But they can play no part in determining whether the applicant has established special circumstances. First, the circumstances of the individual case are special in the sense that they are different from the circumstances that persons facing extradition would ordinarily endure when regard is had to the nature and extent of the extradition charges. This means that the circumstances relied on must be different in kind from the disadvantages that all extradition defendants have to endure. To constitute "special circumstances", the matters relied on "need to be extraordinary and not factors applicable to all defendants facing extradition" [109]. Secondly, there must be no real risk of flight. Absence of a real risk of flight is ordinarily a necessary but not a sufficient condition of bail. When there is a real risk of flight, ordinarily bail should be refused . Further, the risk of flight should be considered independently of the effect of the proposed bail conditions. In this area of law, the history and character of the defendant and the potential punishment facing the defendant are likely to be surer guides to the risk of flight than bail conditions -- even rigorous conditions. A person, fearing punishment and inclined to flee, is unlikely to be diverted from that course by the prospect that his or her sureties may forfeit their securities or by stringent reporting conditions. Even if the defendant has to report twice daily to the police, he or she will have a period of twelve to fourteen hours in which to leave Australia. The applicant provided information that the investigation into the first respondent's alleged criminality commenced in 1998 resulting in him being originally charged in December 2001. Subsequent to this, the authorities learned of a second investigation into the first respondent's alleged criminal activity which resulted in the merger of those investigations in March 2002. Following the merger, the first respondent's alleged criminality was reconsidered and a provisional arrest warrant was obtained in August 2002 after the allegations against the first respondent had been supplemented in July 2002. In December 2006 further amendment of the case resulted in one charge being discontinued due to a limitation period which applied resulting in the remaining two counts the subject of this extradition request giving rise to a further provisional arrest warrant in January 2007. As a consequence of this decision, the provisional arrest warrant issued in August 2002 was revoked. There is nothing which emerges from these circumstances, in my view, which qualifies as a special circumstance for bail reasons. I do not consider that delay by Poland in making the request for the first respondent's extradition is a special circumstance warranting the grant of bail. It would be different perhaps in the case of unacceptable delays in the extradition process itself: Cabal at [66]. The fact that the first respondent has no current Polish or Australian passport is not, inevitably, a barrier to flight. The case of Schoenmakers v Director of Public Prosecutions (1991) 30 FCR 70 demonstrates this point. Schoenmakers had, as a condition of his bail, been required to surrender his passport to the Australian Federal Police. Nonetheless he managed to flee from Australia to Thailand upon his release on bail from extradition detention: Cabal at [67]. The second respondent, in my opinion, erred in his findings regarding the existence of special circumstances on the basis that the matters noted at [13] above were more properly characterised as ones that might ordinarily fall for consideration on an application for bail by a person charged with a domestic offence. The second respondent erred as a matter of law in so finding. There was no material before the second respondent to contradict this assertion. It is evidence of the first respondent's preparedness to take flight from Poland to this country in order to evade alleged criminal conduct. If there is a real risk that the applicant will abscond, the objects of the Act and the rationale of ss 15 and 21 require the refusal of bail in all but exceptional cases. Unless the special circumstances are so cogent and the risk so very low that the proper exercise of discretion requires the grant of bail, any real risk of flight should be decisive against the grant of bail. But it is not a question of whether the personal and other public interests outweigh the objects and rationale of the Act. Once special circumstances are proved, the Court must consider all the circumstances of the case, the chief of which is the risk of flight. If a real risk of flight exists, the proper exercise of the discretion will ordinarily require the refusal of bail. As was said in Cabal at [65] it is a mistake to think that a person is unlikely to abscond simply because that person did not leave the extraditing country "to avoid justice". In any event, in my opinion, risk of flight ought not to be confined to flight from Australia. It is capable of including flight within Australia. In my opinion, the second respondent failed to take into account a material matter namely, evidence that the first respondent posed a real risk of flight. This was an error of law. The application should be granted with orders, in terms of the minute of proposed orders. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | bail extraditee granted bail pursuant to s 15(6) of the extradition act 1988 (cth) poland sought judicial review whether reviewable error in respect to existence of "special circumstances" and the absence of flight risk. extradition |
The University is not suing Dr Chen. She, however, has commenced action in the Supreme Court against Dr Gray and the second and third respondents, Sirtex Medical Limited (Sirtex) and the Cancer Research Institute Inc (CRI). The exchange of correspondence produced by the University relates to the issue, and timing of the issue, of Dr Chen's proceedings in the Supreme Court. The University resists disclosure of the full text of the correspondence on the basis of a common interest legal professional privilege. 2 For the reasons that follow, I do not consider that a sufficient common interest is made out between the University and Dr Chen to support the privilege which is claimed. The correspondence was produced by the University to Dr Gray's solicitors with certain sections blanked out. The blanked out sections were excluded from the University's production on the basis that they were the subject of legal professional privilege supported by a relevant common interest between the University and Dr Chen. 4 In cross-examination on the bundle, which was Marked For Identification 40, the Vice-Chancellor of the University said that he was unaware of any arrangement between the University and Dr Chen related to the outcome of these proceedings. 5 In so much of the correspondence as was disclosed, Mr Provan, Dr Chen's solicitor, informed the solicitors for the University on 12 October 2003 of Dr Chen's intention to issue a writ out of the Supreme Court of Western Australia naming Dr Gray, CRI and Sirtex as defendants on the basis that they had "misappropriated" a patent in respect of which Dr Chen claimed to be the inventor. The intention at the time was to issue the writ and not serve it so as to protect Dr Chen against expiry of her right to sue by reason of the relevant limitation period expiring. 6 The writ issued on 24 October 2003. In the statement of claim, which was filed on 11 January 2004, Dr Chen claimed, inter alia, that she was the sole inventor of the invention disclosed in Australian Patent Application No PM2492. This is the patent application referred to in [36] of the University's statement of claim in these proceedings. There it is alleged by the University that in the course of their work at the University Drs Gray and Chen developed and/or discovered the invention referred to in that application. That allegation leads into the University's plea that Drs Gray and Chen held, and that Dr Gray holds, any right or entitlement flowing from the relevant patent application on trust for the University. 7 Dr Gray denies the assertion and says, inter alia, that the University is barred, by its delay, from pursuing the relevant cause of action for breach of fiduciary duty on his part. He also says that the intellectual property was not discovered during Dr Chen's employment with the University but in the course of her employment by CRI (see [62] and [82] of the defence). The University in its reply denies the pleas in the defence relating to Dr Chen's employment. Two persons interested in a particular question will not have a common interest if their individual interests in the question are selfish and potentially adverse to each other. The exceptions include evidence which has been expressly or impliedly consensually disclosed by the relevant client to another person other than the lawyer acting for that client. That does not of itself disclose a common interest with the University at the time that the correspondence came into existence unless the common interest relevant to the preservation of privilege against disclosure is supportable by the proverb that "the enemy of my enemy is my friend". That is not enough nor is the fact of mutual correspondence. Shifting and temporary alliances involving disclosure of otherwise privileged matters do not of themselves create a common interest of the kind necessary to protect privilege against such disclosure. 12 Dr Chen's assertions in the statement of claim which she filed in the Supreme Court appear directly adverse to those of the University in relation to the entitlement to an interest in the relevant patent. The University is not a party to those proceedings, which have been commenced in the Supreme Court of Western Australia. The commencement of that action and its continuation are entirely matters for Dr Chen. Our client takes your client to be on notice of the allegations made in that pleading. To the extent of any inconsistency between the allegations made in that statement of claim and the proceedings commenced by Dr Chen, the University reserves its rights. That does not, however, disclose a common interest sufficient to support the common interest privilege. In my opinion the common interest privilege claim should be refused and the University be required to produce complete copies of the exchange of correspondence between its solicitors and the solicitors for Dr Chen. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | common interest privilege correspondence between solicitors for party and solicitors for non-party non-party commencing separate proceedings against parties being sued by applicant in current proceedings non-party's action adverse to interests of applicant common interest privilege claim insufficient common interest to support privilege claim full copies of documents to be produced legal professional privilege |
Section 87 authorises the Court to make orders in the terms of an agreement reached between the parties without holding a hearing. The orders that the Court is invited to make today will recognise the existence of the native title held by the Githabul People in the consent determination area. The area covers land and waters in the northern part of New South Wales covering identified areas of New South Wales State Forests, New South Wales National Parks and parts of the Dairy Flat Travelling Stock Reserve. 2 The application for a determination of native title in this area and an adjoining area in Queensland was lodged with the National Native Title Tribunal on 5 September 1995. Following the enactment of the Native Title Amendment Act 1998 (Cth) the application was taken to have been made to this Court (Part 3 of Schedule 5 of the Native Title Amendment Act 1998 ). The Court referred the application, together with two overlapping claims, to the Tribunal for mediation. Subsequently the overlapping claims were discontinued and the application amended including by the deletion of any claim over land and waters in Queensland. 3 An Indigenous Land Use Agreement, being an area agreement of the kind dealt with in Subdivision C of Division 3 of Part 2 of the Native Title Act , was signed by the parties on 27 February 2007. The Agreement was registered by the Tribunal on 15 August 2007. By clause 6 of the Agreement the State recognised that the Githabul People hold native title in accordance with the consent orders that the Court is invited to make today and agreed to join with the registered native title claimant in applying for those consent orders to be made by the Court. It is as a result of that application that the Court sits here today. Consent determination orders signed by each party have been filed with the Court. The orders reflect an agreement reached between the parties on the terms of orders of the Court in relation to the proceeding. I am satisfied that an order in those terms would be within the power of the Court and would comply with the requirement that an order that makes a determination of native title must set out details of the matters mentioned in s 225 of the Native Title Act . I therefore conclude that the Court is authorised to make the consent determination under s 87 of the Act. 6 The final matter to which s 87(1) requires me to consider is whether it appears to be appropriate to make the consent determination. In considering whether it appears to be appropriate to make the consent determination I take into account that the applicant, representing the Githabul People, and the State have together asked the Court to make the determination. I also take into account that the Native Title Act discloses an intention that mediation leading to agreement should be the primary means of resolving native title applications. I note that in this case the parties have been assisted during the mediation process by independent and competent legal representatives. I am satisfied by the affidavit evidence placed before the Court that as a consequence the respective interests of the parties have been protected. I am also satisfied that the State of New South Wales has given appropriate consideration to all relevant evidence and other material in the interests of the community generally. 7 I conclude that it is appropriate to make the consent determination orders sought by the parties and I now make those orders. One of those orders is that the Githabul Nation Aboriginal Corporation is to hold the native title rights and interests as agent for the Githabul People who are the common law holders (s 56 and s 57(2) and (3)). A sealed copy of the orders made today will be held in the records of the Federal Court. 8 As this Court has now emphasised on many occasions, the orders of the Court do not grant native title; the orders recognise that the Githabul People have long held rights and interests in the land under the traditional laws acknowledged and the traditional customs observed by them (s 223). 9 Today is therefore a most significant day for the Githabul People and a significant day in the history of New South Wales. I congratulate the parties on reaching the agreement that is reflected in the orders made today. They have persevered over a long time. Reaching an agreement of this kind can take a lot of hard work and it requires the development of mutual trust. I commend the parties on their achievement. I am pleased to see so many members of the claim group and respondent parties here today to witness the realisation of their efforts. The agreement is their agreement, not that of their lawyers, the National Native Title Tribunal or the Court. It reflects great credit on the Githabul People and particularly the named applicant Mr Trevor Close, the State of New South Wales, NTSCORP Limited and the Casino Rural Lands Protection Board. 10 I also commend the legal representatives of the parties who have so ably assisted them to reach this noteworthy agreement. Turning first to the legal representatives of the applicant, I would particularly like to thank Mr McAvoy of counsel, Mr Behrendt from Chalk and Fitzgerald and the staff of NTSCORP Limited including Mr Rind and Mr Chapman (who are no longer with NTSCORP Ltd) and Ms Rotumah. For the State of New South Wales I would particularly like to thank Mr Hughston SC with Mr Waters of counsel and Ms Illiadis from the NSW Crown Solicitors Office and Ms Jude and Ms Khan (who has since left the Department of Lands) for their assistance throughout the proceeding and for their persistence in moving the matter forward towards an agreed outcome. Additionally I express my thanks to Registrar Kavallaris and Mr Hartop of the Federal Court of Australia for their assistance to me and the parties in this matter. 11 I would also like to acknowledge and commend the contribution of the members and staff of the National Native Title Tribunal for their efforts in assisting the parties to conduct the meaningful negotiations which resulted in the Indigenous Land Use Agreement that I have already mentioned and today's consent determination. 12 Because this is such a significant occasion, the Court has prepared bound versions of the orders that the Court has made today. The orders will now be entered and, in a moment, I will invite a representative of each party to step forward to receive a bound copy of the orders. 13 Before adjourning the Court I wish to thank all those who have worked so hard to make today such a wonderful occasion. 14 Once again I congratulate the parties on reaching agreement in this matter. | determination of native title by consent native title |
2 He arrived in Australia on 11 May 2007 and applied for a Protection (Class XA) Visa on 14 May 2007. A delegate of the Minister refused to grant that visa and an application for review was lodged with the Refugee Review Tribunal on 25 June 2007. 3 The Tribunal affirmed the decision of the delegate by way of a decision signed on 8 October 2007. 4 The Federal Magistrates Court dismissed an application to review the decision of the Tribunal on 20 February 2008: SZLQZ v Minister for Immigration & Citizenship [2008] FMCA 194. The Federal Magistrate dismissed the application pursuant to rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). (2) To avoid doubt, a dismissal under paragraph (1)(a) is interlocutory. As rule 44.12(2) expressly provides, the dismissal of an application under rule 44.12(1)(a) is an interlocutory decision. 6 An appeal to this Court from an interlocutory decision of the Federal Magistrates Court requires leave: Federal Court of Australia Act 1976 (Cth), s 24(1A). The Applicant appeared before this Court this afternoon unrepresented, although he did have the assistance of an interpreter. 7 The Application for Leave to Appeal was filed in this Court on 11 March 2008. Juris-dictional error 2. Breached of procedures 3. 8 The Application sought an order dispensing with compliance with Order 52, r 5(2) of the Federal Court Rules . However, in SZDGN v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 1543 at [9] Lindgren J correctly concluded that " there is no rule providing for a time limit for the seeking of leave to appeal from an interlocutory judgment of the FMCA ". His Honour further concluded that " there is an implied time limit of 21 days after the date of the interlocutory judgment ". 9 No question arises in the present Application as to whether it was filed within time; the question is whether leave should be granted or refused. See: Harrington v Rich [2008] FCAFC 61 at [25] per Sackville, Emmett and Jacobson JJ. 10 In the present proceedings it is considered that leave to appeal should be refused. The judgment of the Federal Magistrates Court is not attendant with sufficient doubt to warrant it being reconsidered. Relevant to that conclusion is a review of the reasons for decision of both the Refugee Review Tribunal and the Federal Magistrates Court. 11 The reasons for decision of the Tribunal recount the claims being made, the findings of fact which were made and the reasons for decision. Those findings include findings made adversely to the now Applicant -- but findings which were open to the Tribunal. Therefore, even though the Tribunal accepts the above claim (to have been abducted) is possible, the Tribunal does not intend to give the applicant the benefit of the doubt and thus does not accept this claim. ... ... the Tribunal is not satisfied the applicant is being pursued by the Indian authorities; for the reasons he claimed or at all. The Tribunal therefore does not accept the applicant had to hide in Bangalow. ... ... ... the Tribunal is satisfied the applicant could safely relocate in India and by doing avoid a well founded fear of persecution for a Convention reason. No such error is apparent on the face of the Tribunal's decision and -- more importantly -- there is no manifest appellable error in the reasons provided by the Federal Magistrates Court. The Tribunal decision turns on its adverse findings based upon the applicant's own evidence. The Tribunal may also have had regard to some country information about Hindu religious festivals. Neither class of information required disclosure pursuant to s.424A. The applicant claims he should have been provided with independent information about adequate State protection, but that does not appear to have played a part in the Tribunal's reasoning, except possibly in relation to the secondary finding on relocation. That conclusion, it is considered, is not attendant with sufficient doubt to warrant the granting of leave to appeal. Indeed, it would appear that the conclusion is correct. 14 The finding as to " relocation ", it should further be noted, was not material to the conclusion reached. The Tribunal thus concluded that " all of the claims " of the Applicant to refugee protection should be rejected. The impact this has had on the Tribunals findings and reasons is set out below. However, to the extent I have not expressly rejected the applicant's material claims below, given I am sufficiently satisfied the applicant has sought to at least embellish (if not entirely fabricate) his material claims, I now reject all his claims to invoke refugee protection obligations in Australia as false. There was, accordingly, no necessity for the Tribunal to go on to consider such difficulties as may have been encountered if relocation had been an issue in need of resolution. No error, however, is exposed by the Tribunal proceeding to do so. 15 The decision of the Tribunal does not expose any jurisdictional error, denial of natural justice or other failure to comply with " procedures ". Nor is any appellable error evident from the reasons for decision of the Federal Magistrates Court dismissing the application before that Court. 16 Leave to appeal is thus refused. 17 An Affidavit as filed by the Respondent Minister sought a fixed costs order in the sum of $645. There is no reason to question that quantification. The Application for Leave to Appeal be dismissed. 2. The Applicant to pay the costs of the First Respondent fixed in the sum of $645. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | federal magistrates court interlocutory decision application for leave to appeal application dismissed decision not attendant with sufficient doubt migration |
He claimed compensation from Australia Post under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ('the SRC Act') for various conditions and impairment, including: Australia Post denied liability under the SRC Act in respect of Mr Mellor's claims. Mr Mellor applied to the second respondent, the Administrative Appeals Tribunal ('the Tribunal'), for review of seven reviewable decisions of Australia Post. The Tribunal dealt with a number of issues arising from the decisions of Australia Post. Mr Mellor does not dispute the Tribunal's findings regarding his claim for compensation with respect to skin cancer. He does not dispute the factual findings made by the Tribunal or its conclusion, based on the medical evidence, that his thoracic and lumbar spine was not made worse by his employment. The conditions that the Tribunal concluded could be considered ailments within the meaning of s 4 of the SRC Act that are relevant to these proceedings relate to Mr Mellor's kyphoscoliosis of the thoracic spine, degenerative change in the lumbar spine and a congenital anomaly at the lumbosacral junction (at [223]-[224]). Mr Mellor raises issues which, in turn, he relies upon as questions of law for an appeal under the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') and as errors of law for the purposes of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'). In addition, Mr Mellor submits that the Tribunal failed to apply binding authority regarding the question of and meaning of "injury" in the SRC Act. He also submits that the Tribunal failed to address certain of his submissions, in particular: The issues that arise for consideration as the case was presented are: Did the Tribunal fail to appreciate that an aggravation of a pre-existing condition can constitute an injury for the purposes of the SRC Act? Did the Tribunal assume that an aggravation can only be a compensable injury if it affects underlying pathology? Did the Tribunal fail to appreciate that pain can constitute a compensable injury? Can a work-related aggravation of a pre-existing condition that causes pain leading to incapacity not be compensable because the work did not contribute to the aggravation to a material degree? Did the Tribunal fail to consider whether Mr Mellor's work caused a permanent aggravation by increasing his background level of pain? There is no dispute that an aggravation of a non-symptomatic condition without pathological change can constitute an injury under the SRC Act. The Tribunal stated, at [225], that Mr Mellor claimed that his employment contributed to or aggravated all of his ailments and claimed that the contribution or aggravation was to a material degree so that these ailments constituted an injury within the meaning of the SRC Act. If so, Mr Mellor claimed that he was entitled to compensation pursuant to s 14 of the SRC Act. At issue in the Tribunal was a fall that Mr Mellor claimed that he had in the course of his work in April 2003. Mr Mellor claimed that the fall had caused or contributed to compression fractures of the thoracic vertebrae. The Tribunal commented at [243] that Mr Mellor clearly indicated that he did not experience any thoracic pain at the time of or in the immediate period after the fall. The Tribunal found his evidence with regard to thoracic pain to be ' somewhat vague and inconsistent ' and commented that he rarely mentioned thoracic pain unless prompted by counsel. Based on the medical evidence which it accepted and preferred, the Tribunal found that Mr Mellor suffers from constitutional kyphoscoliosis and does not have vertebral compression fractures (at [258]). The Tribunal accepted that the pain suffered by Mr Mellor from time to time in the thoracic area constituted a temporary aggravation of Mr Mellor's constitutional kyphoscoliosis. However, at [260], the Tribunal said that it did not accept that the ' temporary increase in symptoms represented an aggravation of [Mr Mellor's] thoracic spine condition in a material degree '. It is apparent that, in referring to the "thoracic spine condition", the Tribunal was referring to the constitutional kyphoscoliosis. Accordingly, the Tribunal found that neither the fall in 2003 nor the nature and conditions of Mr Mellor's work contributed to or aggravated his thoracic kyphoscoliosis, so that Mr Mellor did not suffer an injury within the meaning of s 4 of the SRC Act and was not entitled to compensation pursuant to s 14 of the SRC Act. Mr Mellor's evidence regarding his pain was somewhat vague and inconsistent. A consistent feature of Mr Mellor's evidence was the onset of back pain in the months following the fall at work in April 2003, but not at the time of the fall or in the following days or weeks. The pain was usually present mainly in the course of his work and made worse by work activities. Mr Mellor described the pain as ' generally not severe but merely uncomfortable, and rarely required analgesia '. Apart from the opinion of a Dr Bodel, the medical evidence was quite consistent with little or no support for a conclusion that the nature or pathology of Mr Mellor's underlying lumbar spine condition was either caused by or made worse by his employment. Mr Mellor's recollection is of increased pain during his work and that the nature of the work contributed to that pain. The Tribunal accepted that Mr Mellor did suffer increased pain in the course of his work and that it was likely that the nature of the work contributed to the pain. The Tribunal said that '[t] herefore, his work could be considered to have made his underlying [lumbar spine] condition worse, or in other words aggravated the condition ' (emphasis added). However, the weight of medical opinion and Mr Mellor's evidence favours a conclusion that the increased pain was merely a temporary aggravation in the context of his activities while at work and the effects of the aggravation ceased when he stopped these activities or shortly after. Mr Mellor continued to suffer pain in his lower back and legs after stopping work in 2007. It was usually related to physical activity. It would settle in the evenings. Since leaving work, Mr Mellor suffers a background level of symptoms, including pain, that can be attributed to his constitutional spinal conditions and that intermittently, his symptoms get worse with physical activity. This is a similar situation to when Mr Mellor was employed. Accepting that Mr Mellor's employment at Australia Post contributed to the aggravation of his lumbar spine condition in the sense that he suffered from pain, the Tribunal found that the contribution resulted in only a temporary aggravation with no lasting effects and did not make the underlying condition worse. The Tribunal concluded that the contribution to the lower back conditions by the employment was not sufficiently significant to meet the threshold of "in a material degree". The lumbar spine condition is not an injury within s 4 of the SRC Act and Mr Mellor is not entitled to compensation pursuant to s 14 of that Act. His evidence was that the pain in his back became worse after his fall in April 2003 and was usually associated with his work activities. Some of this pain was in the thoracic spine, although the bulk of his concern was his lumbar spine. Mr Mellor says that his unchallenged evidence was that, as a result of his back complaint, he often had to leave work early and rest and take paracetamol to treat the increase in symptoms. Since he stopped work in September 2007, his back condition has, he says, ' waxed and waned ' and physical activity makes it more symptomatic. Mr Mellor does not challenge the Tribunal's finding, based on the medical evidence, that the underlying pathology of Mr Mellor's thoracic and lumbar spine was not materially altered for the worse by his work. He submits, however, that the Tribunal considered, incorrectly, that some material change was required in the underlying pathology to found liability and that the experience of the symptoms and pain as found was insufficient. The requirement of materiality is, by reason of the definition of "disease" in s 4, a requirement that the employee's employment contribute materially to the suffering of the ailment in question ( Comcare v Sahu-Khan [2007] FCA 15 ; (2007) 156 FCR 536 at [16] per Finn J) or to the aggravation of the ailment, that is, '[i] n a material degree; substantially, considerably ' (the Shorter Oxford English Dictionary cited by Finn J in Sahu-Khan at [15]). Mr Mellor submits that, in his case, the correct question is not whether the underlying pathology of a disease or frank injury had been materially contributed to but whether the aggravation of symptoms, being an injury, had been materially contributed to. The worsening of symptoms of an injury can, he submits, be sufficient to ground liability without any change in the underlying pathology. Mr Mellor relies for that principle on Federal Broom Company Pty Limited v Semlitch [1964] HCA 34 ; (1964) 110 CLR 626 , where the High Court held that there is a compensable exacerbation of a disease where the experience of the disease by the patient is increased or intensified by an increase or intensification of the symptoms. In that case, the plaintiff was already suffering from a disease but her employment resulted in a new manifestation of it. Justice McTiernan observed at 629 that, for the purposes of the Act then under consideration, the Workers' Compensation Act 1926-1960 (NSW), manifestations of a disease are relevant only so far as they cause incapacity and where the manifestations are causally related to employment. Justice Kitto, with whom Taylor and Owen JJ agreed, said at 632-633 that employment can be said to be a contributing factor to the aggravation of a disease where it provides an incident or state of affairs to which the worker is exposed in the performance of his (sic) duties and to which the worker would not otherwise have been exposed. There is no requirement that the underlying disease is made worse; it is sufficient if a new manifestation is suffered. Indeed, his Honour noted at 634, "exacerbation" applies to the effects of the disease rather than to the disease itself. Justice Windeyer said at 642 that it was not to the point that the plaintiff might have broken down because of her illness in any event; the precipitating event occurred at work. As was pointed out by the Full Court in Commonwealth of Australia v Beattie (1981) 35 ALR 369 , the definitions in issue in Federal Broom were different from those in Beattie (as they are from the definitions in s 4 of the SRC Act). The Full Court said at 377-378 that, notwithstanding differences, Federal Broom establishes that there may be an exacerbation or aggravation, which relevantly mean the same thing, notwithstanding that there is no change in the underlying pathology. Whether there is such an exacerbation or aggravation is a question of fact in each case. The Full Court continued, at 378, to observe that it does not follow in every case that a worker with a pre-existing injury who carries out work and, as a result, suffers pain, will have suffered an aggravation of his or her injury but pain brought on by work activity may constitute an aggravation of a pre-existing injury even though no pathological change takes place. Put another way, an injury may be aggravated if the experience of the injury is increased or intensified. The fact that symptoms abate on each occasion that the worker ceases work does not preclude compensation where enhanced susceptibility to the onset of symptoms has been caused by the work. In those circumstances, the enhanced susceptibility constitutes an aggravation of the disease ( Asioty v Canberra Abattoir Proprietary Limited [1989] HCA 40 ; (1989) 167 CLR 533 at 540). Neither the absence of change in the underlying condition nor the temporary nature of the symptoms experienced preclude the existence of an aggravation of an ailment for the purposes of the SRC Act ( Federal Broom; Asioty; Beattie ). In Asioty, there had been an increased susceptibility to dermatitis caused by the employment of the worker in an abattoir. That constituted the aggravation or exacerbation of the disease. Here, the Tribunal did not find any increased susceptibility but rather that employment resulted in temporary pain from Mr Mellor's back without any permanent effect. The Tribunal then turned to consider whether that temporary aggravation constituted an aggravation to a "material degree". It is at that stage of the reasoning that the Tribunal concluded that the thoracic pain did not fulfil the requirements of an injury under the SRC Act. In considering the lumbar spine, the Tribunal accepted that the pain constituted an aggravation of Mr Mellor's condition but found that it was a temporary aggravation that ceased when he stopped his work activities or shortly thereafter. The Tribunal found that this did not fulfil the requirement that Mr Mellor's employment contribute to his lower back conditions in a material degree. Accordingly, the Tribunal did not fail to appreciate that: an aggravation of an existing ailment may constitute an injury; that an aggravation can be a compensable injury without any change in the pathology of the ailment; or that pain can constitute a compensable injury. A complicating factor is the Tribunal's observations at [284] that Mr Mellor suffers a background level of symptoms, including pain, that can be attributed to his constitutional spinal conditions and that intermittently his symptoms get worse with physical activity so that, currently, he finds himself in a similar situation to when he was employed. However, the Tribunal reiterated at [286] its finding that the employment at Australia Post did contribute to the aggravation of the lumbar spine condition in causing pain. Mr Mellor criticises the Tribunal for not following binding authority ' in relation to pain causing incapacity '. The Tribunal is not obliged to cite in its reasons the cases which establish this proposition. The question is whether the Tribunal appreciated and applied the principles from those cases. In my view, the Tribunal did not fail to appreciate that aggravation, in the form of pain, of a pre-existing ailment can constitute a compensable injury without the need for any change in the underlying pathology. Mr Mellor also argues that the Tribunal failed to consider his submissions that his employment resulted in permanent aggravation by increasing his background level of pain. The Tribunal dealt with this issue and concluded that in the case of both the thoracic and lumbar conditions, the aggravation was temporary with no lasting effects. The Tribunal's reasoning appears to be as follows: That is, the Tribunal concluded that the employment was the cause of the aggravation represented by the pain but that the effect of that aggravation was not material because it was temporary and not severe. Is the requirement of materiality directed to the cause of the aggravation or its effect? "Disease" means an ailment or aggravation of an ailment ' that was contributed to in a material degree by the employee's employment '. "Injury" means, relevantly, a disease or an aggravation of an injury other than a disease. In Sahu-Khan , Finn J traced the legislative history of and judicial consideration of the requirement of materiality, including the decision of the Full Court in Comcare v Canute [2005] FCAFC 262 ; (2005) 148 FCR 232. In Canute at [67], French and Stone JJ said that the term "material" ' imposes an evaluative threshold below which a causal connection may be disregarded '. Justice Finn in Sahu-Khan adopted that analysis at [13]. It is the nature of the contribution that is necessarily material ( Sahu-Khan at [15]). The Tribunal correctly summarised the principles in Sahu-Khan at [227]. It appreciated that there was a requirement of materiality for a causal connection to be found. However, at [286]-[287], in considering the lumbar spine, it said that because there was no lasting effect of the aggravation and no underlying change in the condition, the contribution by the employment to the lower back conditions was not material. With respect to the thoracic spine, the Tribunal stated at [260] that it did not accept that the temporary increase in Mr Mellor's symptoms represented an aggravation of his condition in a material degree. This was to confuse the requirement that the employment be a material cause of the aggravation with a requirement that the effect of the aggravation be material. For present purposes, the relevant part of the definition of "injury" is the reference to "disease", which, in turn, is defined as an ailment or an aggravation of an ailment to which the employee's employment contributes in a material degree. On the Tribunal's findings, Mr Mellor's employment did not affect the underlying pathology of his back conditions but, in causing pain, it rendered the back conditions temporarily symptomatic, or irritated them ( Macquarie Dictionary , definition of "aggravate"). Pain may constitute an aggravation of an ailment or injury ( Beattie ). This was because the Tribunal did not accept that a temporary increase in symptoms represented an aggravation of the thoracic spine condition in a material degree and found that the temporary aggravation of the lumbar spine condition meant that the contribution to the lower back condition was not sufficiently significant to meet the threshold of "in a material degree". Australia Post submits that the requirement of materiality qualifies the word "ailment" in the expression ' the aggravation of any such ailment; being ... an aggravation [of any such ailment] that was contributed to in a material degree by the employee's employment '. I do not accept this to be the case. It is also inconsistent with the discussion of materiality in Canute and Sahu-Khan , although neither of those cases directly considers the issue raised in the present case. Australia Post submits that Parliament would not have intended that the Commonwealth be liable for any aggravation of disease regardless of how insignificant that aggravation might be. However, s 4 does not give effect to such an intention. Further, Australia Post points out that the Tribunal was referred to Tippett v Australian Postal Corporation (1998) 27 AAR 40 , which inaccurately summarised the joint judgment of Evatt and Sheppard JJ in Beattie as stating that an injury will be aggravated if the experience of the injury is increased or intensified. In fact, their Honours said that ' it is enough to say that pain brought on by work activity may constitute an aggravation ' (emphasis added). Australia Post submits that this may well have influenced the Tribunal to make findings that pain and discomfort in Mr Mellor's thoracic and lumbar regions constituted temporary aggravations, notwithstanding its reservations made apparent by the qualifications indicating that the Tribunal was not persuaded that the pain in each case actually amounted to aggravations of the underlying ailments. Australia Post submits that I should draw the conclusion that, had the Tribunal been aware of the correct statement in Beattie , it would have concluded that no aggravation had occurred and that Mr Mellor was not suffering from work-aggravated diseases in his thoracic and lumbar spines. It follows, in Australia Post's submission, that I should come to that conclusion and not remit the matter to the Tribunal. I see the force of the submission but I do not accept that the conclusions that the Tribunal would make in applying Beattie are so clear from its reasons. The Tribunal expressed its conclusions in terms of a requirement that the aggravation be material. The Tribunal did not correctly address the question whether or not the pain that Mr Mellor felt, being only temporary but experienced when he returned to work, constituted an aggravation of an ailment to which his employment contributed in a material degree and which, in turn, constituted a disease and thereby an injury for the purposes of the Act. It may be that the Tribunal will conclude that the symptoms suffered by Mr Mellor do not amount to an aggravation but that is not conclusive from the reasons. The matter should be remitted to the Tribunal to enable it to make findings in accordance with law. The Tribunal accepted that the employment caused temporary pain from Mr Mellor's constitutional thoracic and lumbar back conditions. In concluding that, because the pain was temporary, the requirement of materiality was not satisfied, the Tribunal erred in law in applying the test of materiality to the effect of the aggravation of the ailments. The Tribunal therefore determined that the threshold requirement, that Mr Mellor did suffer an injury, was not met. It does not necessarily follow from the Tribunal's error that Australia Post is liable to pay Mr Mellor compensation. It seems to me that the appropriate course is to remit the matter to the Tribunal to be determined according to law. I will hear from the parties as to appropriate orders, including orders as to costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | appeal from and application for review of decision of administrative appeals tribunal pre-existing medical conditions applicant suffered pain while at work no change to underlying pathology whether tribunal failed to appreciate that pain can constitute an aggravation for the purposes of the safety, rehabilitation and compensation act 1988 (cth) whether tribunal failed to appreciate that an aggravation of a pre-existing condition can be an injury for the purposes of the act whether tribunal assumed that there must be a change to underlying pathology for employer to be liable tribunal found that work contributed to pain but that effect was not material whether question of materiality is directed to the effect of an aggravation whether matter should be remitted to tribunal administrative law |
He brings this proceeding under s 49 of the BCII Act for the imposition of penalties for alleged breaches by the respondents of ss 38 and 43 of the BCII Act . At all material times, the first respondent ("the CFMEU") was an "organisation" within the meaning of the Workplace Relations Act 1996 (Cth) ("the WR Act ") and a "building association" and an "industrial association" as defined in s 4 of the BCII Act . At all material times, the second respondent, Bob Mates, was an employee and officer of the CFMEU. The alleged breaches of the BCII Act relate to a building site at 90-100 Mount Street, Heidelberg, Victoria ("the Mount Street site") in 2006. 2 At the close of the applicant's case on the evening of 17 July 2008, the respondents stated that they wished to make a no-case submission in respect of parts of the applicant's claims against them. Whilst there has been judicial disagreement about the source of the Court's power to hear a no-case submission and the manner in which it should be dealt with, neither issue requires examination in this case. It is accepted that the Court has power to entertain such a submission: see Rasomen Pty Ltd v Shell Co of Australia Ltd (1997) 75 FCR 216 (" Rasomen ") at 223 per von Doussa, Drummond and Finn JJ referring to O 32, r 4(4) of the Federal Court Rules 1979 (Cth) ("the Rules") and s 79 of the Judiciary Act 1903 (Cth); and Compaq Computer Australia Pty Ltd v Merry [1998] FCA 968 ; (1998) 157 ALR 1 (" Compaq Computer ") at 6 per Finkelstein J, Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 (" Amcor ") at 356-60 per Sackville J and Australian Competition and Consumer Commission v Leahy [2004] FCA 1678 ; (2004) 141 FCR 183 (" Leahy ") at 210 per Merkel J referring to O 35, r 1 of the Rules. The approach is the same, whatever the source of the power: compare Compaq Computer at 6. 3 The respondents were given leave to make their no-case submissions the next day upon the basis that I would defer ruling on whether they should be required to make an election as to the calling of evidence until I had heard further argument. I explain the reasons for this course below. Note: Grade A civil penalty. This equates to $110,000 in the case of a body corporate and $22,000 in the case of an individual: see Crimes Act 1914 (Cth), s 4AA. 5 It was part of the applicant's case that, on 15, 17, 21 and 22 February 2006 (and following), the CFMEU and/or Mr Mates contravened s 43 of the BCII Act . In particular, the applicant alleged that, by their conduct on 15 and 17 February 2006, the CFMEU and/or Mr Mates threatened to take action with the intent to coerce ACN 117 918 064 Pty Ltd trading as Hardcorp ("Hardcorp") to: (a) employ the CFMEU's former shop steward (Jason Deans), the former occupational health and safety officer ("OH&S officer") (Roslyn Singleton) and the former FEDFA shop steward (Aengus O'Donnell) (collectively "the required persons"), all of whom were previously employed at the Mount Street site; and (b) allocate and/or designate to the former OH&S officer (Roselyn Singleton) the responsibilities or duties of the OH&S officer at the Mount Street site. The applicant further alleged that, by their conduct on 21 and 22 February 2006 and following, the CFMEU and/or Mr Mates organised and took action with intent to coerce Hardcorp at the Mount Street site to: (a) employ the required persons; and (b) allocate and/or designate to the former OH&S officer the responsibilities or duties of the OH&S officer. 6 The balance of the applicant's case was that the CFMEU and/or Mr Mates contravened s 38 of the BCII Act . Note: Grade A civil penalty. It was common ground that the alleged "action" was not excluded action. 7 Much of the respondents' no-case submission turned on the effect of the definition of "building industrial action" in s 36(1) of the BCII Act . Note: See also subsection (2), which deals with the burden of proof of the exception in paragraph (g) of this definition. It is not disputed that the National Building and Construction Industry Award 2000 and the Mobile Crane Hiring Victorian Common Rule Declaration 2005 applied to the building work taking place at the Mount Street site, although neither instrument was in evidence. The applicant asserted, and the respondents denied, that there was an "industrial dispute" within the meaning of s 36(4) of the BCII Act . Whilst it may be necessary to consider this issue later, it need not be determined now since it was not part of the respondents' no-case submission: see [11]-[16] below. The employer referred to in paragraphs (a) and (b) need not be the employer whose employees do the work to which the action relates. In this case, the applicant particularly relies on para (d) of this definition. 10 The applicant's case was that, on 21 February 2006 at the Mount Street site, Mr Mates did three things that each constituted "building industrial action" within the meaning of paras (b) and (c) of the definition in s 36(1) of the BCII Act . He: (1) demanded the crane crew from Independent Cranes Pty Ltd ("Independent Cranes") who had come to the Mount Street site to undertake crane work that day to shut down the crane and leave; (2) telephoned the office of Independent Cranes and said that its crew were not to work on the Mount Street project; and (3) telephoned the CFMEU's offices or a representative of the CFMEU and instructed the person he contacted to instruct Maurie Hill (the CFMEU organiser responsible for mobile cranes in Victoria (FEDFA division)) to ring Sergi Cranes and other crane operators to warn them off working at the Mount Street site. The applicant also argued that Mr Mates breached s 38 of the BCII Act by organising a picket line at the Mount Street site ("the picket") between 22 February 2006 and 10 March 2006. The submissions did not include alleged contraventions of s 43 of the BCII Act based on the respondents' alleged conduct on 15 and 17 February 2006. 13 There were essentially two limbs to the respondents' no-case argument. In the first place, they argued that, even if proven, the conduct alleged in paras 13 and 14 of the applicant's statement of claim could not amount to "building industrial action", as defined in paras (b) and (c) of the definition in s 36(1) of the BCII Act . The respondents argued that this was because, in order to constitute "building industrial action" within these paragraphs, the action must be that of employees in respect of their work. The respondents contended that this was the effect of the Full Court judgments in Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108 ; (1999) 165 ALR 550 (" Davids ") and Construction, Forestry Mining and Energy Union v Giudice (1998) 159 ALR 1 (" Giudice "). Hence, the respondents argued that, even if the Court found that Mr Mates had caused the crane from Independent Cranes to shut down and leave the site on 21 February 2006, this conduct alone could not constitute "building industrial action" as defined in s 36(1) of the BCII Act . In support of this argument, the respondents pointed out that there was no imposition of bans or limitations in relation to the performance of their work by the employees of either Hardcorp or Independent Cranes. At most, on the applicant's case, Mr Mates had caused Independent Cranes to terminate its provision of services to Hardcorp. 14 For essentially the same reason, the respondents contended that Mr Mates' alleged telephone calls to the offices of Independent Cranes and the CFMEU (or a CFMEU representative), even if proven, would not fall within the definition of "building industrial action" because the alleged actions again involved no bans or limitations by employees on the performance of their work. If anything, so the respondents said, the conduct involved bans by Independent Cranes and other crane companies on the supply of services to Hardcorp, none of which constituted "building industrial action". The respondents also submitted that the picket involved no building industrial action in contravention of s 38 of the BCII Act because the action was not taken by the employees of Hardcorp to ban or limit their work. 15 The applicant disputed the respondents' construction of the definition of "building industrial action" in s 36(1) of the BCII Act . The applicant submitted that, to fall within paras (b) and (c) of the definition, it was enough that there was a ban, limitation or restriction on the performance of building work, and that whether or not it was imposed by employees was immaterial. If there was a ban, limitation or restriction on the performance of building work imposed by a union, then the definition of "building industrial action" might be satisfied. 16 The second part of the respondents' no-case submission was to the effect that, even if the Court rejected their argument on the proper construction of the definition of "building industrial action", the evidence adduced by the applicant failed to make out the essential elements of his case that, by their conduct on 21 and 22 February 2006, the respondents contravened ss 38 and 43 of the BCII Act . The respondents conceded that Mr Mates stopped the crane. In cross-examination of witnesses, they suggested (and the witnesses to date denied) that Mr Mates raised safety concerns. The respondents argued (and the applicant denied) that the applicant had not proven his allegations with respect to s 38 that: (1) Mr Mates telephoned Independent Cranes on 21 February 2006, saying that the crane crew were not to work on the Mount Street site; (2) Mr Mates telephoned the offices of the CFMEU (or a representative of the CFMEU) on 21 February 2006, instructing the person contacted to tell Mr Hill to warn other crane companies off the Mount Street site; and (3) from 22 February 2006 until 10 March 2006 Mr Mates organised a picket at the Mount Street site. The respondents contended (and the applicant refuted) that the phone records on which the applicant relied failed to establish that Mr Mates made the alleged calls. The respondents argued, in opposition to the applicant, that the applicant could derive little, if any, assistance from the evidence of Mr Mitchell or Mr Moresi. The respondents argued, and the applicant denied, that a Jones v Dunkel inference arose from the applicant's treatment of Mr Mitchell's evidence and from the absence of any evidence from any person from a crane company that it had been warned off the Mount Street site. The respondents also contended, and the applicant refuted, that the applicant's case was not borne out by contemporaneous documentary evidence and that, on account of Mr McMahon's evidence, the applicant gained no support from the fact that no replacement crane was ever obtained. The respondents argued that there was an absence of evidence to connect Mr Mates and the CFMEU with the picket, and that the creditors' meeting and creditors' demands supplied a more plausible explanation for the picket. The applicant argued to the contrary. The respondents also maintained that the applicant's evidence as to the alleged breaches of s 43 of the BCII Act (which relied on Mr Mates' conduct on 21 February 2006 and his alleged organising of the picket) was so deficient that it could not make out the essential elements of this aspect of the case against them. The applicant sought to refute these alleged evidentiary shortcomings. Should the respondents be put to their election? The judge hearing the submission has a discretion to depart from this general rule, however, where the particular circumstances warrant it. Usually, but not inevitably, the invitation will be issued at the end of the evidence called against the party desiring to make the submission (whom I shall call "the moving party") and before that party calls any evidence on the relevant issue in answer to that of the other party (whom I shall call "the respondent party"). ... The judge is entitled, for reasons that seem appropriate to him, to decline out and out to entertain such a submission at the stage at which he is asked to do so. He might indicate that he would both entertain the submission and rule on it without requiring an election to be made by the moving party. The applicant opposed this course, arguing that the no-case submission should only be heard upon the basis that the respondents were put to their election. In Protean (at 238) Tadgell J said that, in deciding upon the preferred course on such occasions, "the Judge will be guided by the nature of the case, the stage it has reached, the particular issues involved and the evidence that has been given". The imposition of such a requirement is not a right of the respondent party, for the fate of the submission of the moving party, once made, is in no sense dependent on election or no election. 19 In the present case, for the reasons indicated at the hearing, I determined that I would not rule on whether the respondents should be required to make their election until after the parties had addressed argument on the no-case submission, and as to whether the respondents should be required to make an election. It seemed to me that it was appropriate to take this course in order to understand the nature of the argument the respondents sought to make in saying that they had no case to answer. This was the approach adopted by Fullagar J in Union Bank of Australia Ltd v Puddy [1949] VLR 242 (" Puddy "); by Finkelstein J in Compaq Computer ; by Branson J at first instance in Rasomen (see Rasomen Pty Ltd v Shell Co of Australia Ltd (1996) 71 FCR 540 at 543); by Sundberg J in Tru Floor Service Pty Ltd v Jenkins (No 2) (2006) 232 ALR 532 (" Tru Floor ") at 537; and approved by the Full Court of the Supreme Court of Victoria in Protean . 20 Having heard the parties' arguments, I would not put the respondents to their election in respect of that part of their no-case submission that concerned the scope of the definition of "building industrial action". Had the respondents been successful on this aspect of their no-case submission, they would have defeated the applicant's s 38 case against them, without needing to answer this part of the applicant's case further. The respondents' argument was to the effect that there was an evidentiary hiatus in the applicant's case because the applicant had not adduced any evidence that any "ban, limitation or restriction" had been imposed by employees in respect of the work to which the ban, limitation or restriction related. In order to succeed on this limb of their no-case submission, the respondents had to persuade the Court that their construction of the definition of "building industrial action" was the preferable one, and that the applicant had adduced no evidence on an important element of it. For the following reasons, the respondents have failed to persuade me that their construction of the definition should be adopted, but, equally, it seems to me just and convenient that I rule on this question now without putting them to their election. I have heard the argument. The consideration of this part of their no-case submission involved no consideration of disputed evidence, and, as stated above, if accepted, it would have completely answered the applicant's allegations that they had contravened s 38 of the BCII Act : compare Compaq Computer at 7; Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54 (" Residues Treatment ") at 68 per Perry J; and Puddy at 245. 21 The remainder of the respondents' no-case submission attracts different considerations as to the application of the general rule: compare Residues Treatment at 68-9; William H Muller & Co's Algemeene etc v EBBW Vale Steel, Iron & Coal Co Ltd [1936] 2 All ER 1363 at 1365-6 per Branson J; and Tru Floor at 538-9 (and the cases there cited). 22 In support of their submission that they should not have to make an election as a condition of my ruling, the respondents relied heavily on the fact that the alleged contraventions of the BCII Act attract civil penalties; and they submitted that it would be unjust to expose Mr Mates to cross-examination if a case had not been established against them. They referred to Tru Floor , Compaq Computer and Amcor . 23 In Tru Floor, Sundberg J determined that the defendants (who were directors of a building contractor company) should not be put to their election before his Honour ruled on their no-case submission against the plaintiffs (who were building subcontractors). The plaintiffs alleged that the defendants had contravened the Corporations Law or the Corporations Act 2001 (Cth), by trading while insolvent. A contravention such as this attracted a civil penalty. His Honour noted (at 540-1) considerations in favour of this course included the fact that "part of what is alleged against the defendants is an offence involving dishonesty", his impression that the plaintiffs' case on insolvency was not strong, and that there were likely significant savings involved in entertaining the no-case submission. His Honour said (at 541) that "it would be wrong for the defendants to be subjected to cross-examination on the dishonesty component of the offence before it is seen that there is some evidence of the insolvency component". As Sundberg J noted, similar factors affected Finkelstein J's decision in Compaq Computer not to require the respondents to elect, including the nature of the allegations made against them, which were allegations of dishonesty, as well as his impression about the weakness of the case, and that well over a week's hearing time remained to complete the trial: see Compaq Computer at 9. It was accepted by the Full Court in Protean that in such a case normally it would be wrong to require a party to subject himself to cross-examination if there really was no evidence of fraud against him: see [1985] VR at 236 where Puddy's case is cited as authority. 24 In Amcor , the applicant alleged that the respondents had contravened s 45(2)(a)(i) of the Trade Practices Act 1974 (Cth), a provision which attracted substantial penalties. The applicant's evidence in chief concluded on the first day of the trial, when counsel for the respondents submitted that they should be permitted to make a no-case submission without being put to their election. Sackville J held that the circumstances justified a departure from the general rule that a decision will not be given on a no-case submission unless the submitting party elects to call no evidence. His Honour accepted that the case fell within the third category mentioned by Perry J in Residues Treatment at 68 (on consideration of the evidence adduced by the plaintiff taken at its highest from the plaintiff's point of view, the evidence could not support the cause of action pleaded) and that, in such a case, "there must be unusual circumstances to warrant the respondents being permitted to make their no case submission without being required not to adduce any evidence": see Amcor at 358. Sackville J held, however, that the circumstances were sufficiently unusual and that it was in the interests of justice for the respondents to be permitted to make their no-case submission without making an election. If the allegations were to be established, the corporate respondents would be exposed to pecuniary penalties of up to $10,000,000 and the individual respondents to pecuniary penalties of up to $500,000. Adverse findings might well have serious consequences in terms of loss of business reputation. The authorities recognise that a departure from the general rule is often justified where fraud is alleged against the moving party. The present case is not one in which fraud has been alleged, but in my opinion it is analogous to a fraud case by reason of the very serious allegations that have been made against each of the respondents: see [Trade Practices Commission v George Weston Foods Ltd (1980) 43 FLR 55] at 61; Trade Practices Commission v Nicholas Enterprises Pty Ltd [1978] ATPR 40-097 (Fisher J), at 17,958. The analogy is in my view strengthened by the fact that the definition of 'exclusionary provision' in s 4D of the TP Act incorporates the concept of 'purpose' in a subjective sense: ASX Operations Pty Ltd v Pont Data Australia Pty (No 1) (1990) 27 FCR 460 at 474-7 ... The respondents in this case relied on these passages. 25 There were other factors that also affected Sackville J's assessment, including the fact that the no-case submission did not require an assessment of the credit of any witness, since the facts of the case were largely not in dispute. His Honour observed that he would not have entertained the no-case submission unless the respondents had made their election if it had required him to make an assessment of credit. Additionally, all respondents in Amcor desired to make the submission; there were possible savings in court time and costs; and the applicant had been on notice prior to trial that the respondents proposed to make a no-case submission. His Honour also noted that he formed the impression that the no-case submission was strongly arguable. 26 In the second part of the respondents' no-case submissions, the respondents have argued that, the evidence adduced by the applicant taken at its highest from the applicant's point of view, does not make out certain of the contraventions alleged against them. This part of their no-case submission therefore falls within the third category mentioned by Perry J in Residues Treatment at 68. Generally speaking (and allowing that the court retains a discretion in the matter) there must be some unusual circumstance to justify the respondents making a no-case submission without being required to elect to call no evidence. As already noted, the respondents rely on the fact that the applicant alleged contraventions of the BCII Act , which, if established, would expose the CFMEU to pecuniary penalties of up to $110,000 and Mr Mates to pecuniary penalties of up to $22,000. I accept that this factor militates against adherence to the general rule; and that, in considering the applicant's evidence, I should take account of the gravity of the matters alleged against the respondents: see Evidence Act 1995 (Cth), s 140 and Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 361-2. I also accept that, ordinarily, it is not in the interests of justice for a party against whom civil penalties are sought for statutory breaches of this kind to be subject to cross-examination where there is no evidence to support the case against him or her. 27 I doubt, however, that these considerations provide an answer in this case. First, whilst I appreciate the force of the respondents' no-case submission, I doubt that the respondents' no-case submission in this case is as strong as that considered by Sundberg J in Tru Floor or Sackville J in Amcor . To my mind, the position now reached in this case is more akin to that described by Davies J in Trade Practices Commission v George Weston Foods Ltd (No 2) (1980) 43 FLR 55 (" George Weston ") at 60-2. 28 Secondly, the respondents' no-case submission is a limited one. They advanced this submission only in respect of the events of 21 and 22 February 2006 and following (which are said to give rise to the breaches of ss 38 and 43 of the BCII Act referred to above). Whatever the outcome of this submission, the events of 15 and 17 February 2006 (which are said to give rise to breaches of s 43) would go forward to the end of the trial and the evidence as to them would fall for consideration. It must be borne in mind that Mr Mates is as much a central actor in the events of 15 and 17 February as 21 February and, on the applicant's case, 22 February 2006 and following. Furthermore, the applicant's case against the respondents does not readily permit the dissection the respondents seek. The applicant's case depends, at least in part, upon a consideration of the whole factual matrix, commencing with the alleged conversations on 15 February and, subsequently, 17 February 2006 and culminating with the picket on 22 February 2006 and following. On the applicant's case, Mr Mates' stopping of the crane on 21 February 2006 (which the respondents concede) was within the relevant time-frame. On the applicant's case, this event on 21 February 2006 not only amounts to breach of ss 38 and 43 , but also formed part of the factual matrix upon which other parts of his case against the respondents must be assessed. The temporal link is, on the applicant's case, "extremely important". The applicant's counsel submitted that, whether or not the respondents were put to their election, the evidence regarding the picket and stopping of the crane would remain relevant to the case against the respondents on the other alleged contraventions that were not covered by the no-case submission. Hence, even if the no-case submission were successful, the Court would be obliged to reconsider the evidence that it had already considered as part of the no-case submission, although from another perspective. The applicant also foreshadowed that there might be related difficulties for the conduct of the trial, especially if the Court were to accept part (e.g., regarding the picket), but not all (e.g, regarding the crane stoppage) of the respondents' no-case submission. I agree that there is a risk of embarrassment arising from dealing now with part only of the applicant's case against the respondents, especially having regard to the way the applicant would put its case: compare Residues Treatment at 71-3, Popovic v Tanasijevic (No 4) [1999] SASC 351 (" Popovic ") at [124] per Olsson J and Leahy at 210-12. Of course, in the absence of an election, if the no-case submission were to fail, then the Court would be required to reconsider the evidence considered on the no-case submission in any event. As Sackville J noted in Amcor at 357, this problem may be particularly acute if a no-case submission requires some evaluation of the credit of witnesses. Whilst I accept that, strictly speaking, the respondents' no-case submission may not involve an evaluation of credit, their submission at this point calls for assessments of evidentiary reliability that in some instances give rise to similar concerns: compare Residues Treatment at 69 and George Weston at 58-9. 29 There is, of course, good reason for the general rule that a decision will not be given on a no-case submission unless the submitting party elects to call no evidence. If a judgment in favour of a no-case submission is overturned on appeal, it would generally be necessary to order a new trial: see Compaq Computer at 7 and Amcor at 357. The trial in the present case has proceeded over 4 days. There has been significant cross-examination of the witnesses called by the applicant. Whilst the respondents have filed witness statements from five persons, at the commencement of the trial, they stated that they would not be relying on two of these statements. They have not indicated whether or not Mr Mates will give evidence and, if he does, in what circumstances he would do so: compare Evidence Act 1995 (Cth), s 128. The trial is unlikely to take any more than 2 days to complete. 30 As regards the second part of the respondents' no-case submission, I am not persuaded that justice and convenience justify departure from the general rule. Accordingly, I would not rule on this part of the respondents' no-case submission unless the respondents elect to call no further evidence. The respondents are put to their election, and in respect of all causes of action. This is notwithstanding that their no-case to answer submission did not relate to all that the applicant pleaded against them. Any other approach would undermine the basis upon which I have ruled that they should be put to their election: compare Residues Treatment at 74, Popovic at [124] per Olsson J and Prentice v Cummins (No 4) [2002] FCA 1215 at [25] per Sackville J. As already noted, the applicant's case is that the events on 15, 17, 21 and 22 February 2006 and following are related to one another and not susceptible to the dissection the respondents would make. 32 As I have said, this submission involves little consideration of the evidence so far adduced and does not depend on any disputed evidence. The respondents' argument was that there was no "building industrial action" as defined in s 36(1) and, therefore, no unlawful industrial action for the purposes of ss 37 and 38 of the BCII Act . This was because there was no "ban, limitation or restriction on the performance of building work" within the meaning of paras (b) and (c) of the definition of "building industrial action" in s 36(1) , because there was no ban, limitation or restriction imposed by employees. The respondents submitted, and it was not in dispute, that the applicant led no evidence that any of Hardcorp's employees had imposed a ban, limitation or restriction on the performance of work. There was no evidence that any employee of Independent Cranes or any other crane company had imposed any such ban. Indeed, this was not the applicant's pleaded case. Accordingly, if the respondents' construction of the definition of "building industrial action" in s 36(1) of the BCII Act were accepted, then the respondents would have no case to answer under s 38 of the BCII Act . The question is, however, whether or not the words "a ban, limitation or restriction on the performance of building work" in paras (b) and (c) of the definition of "building industrial action" refer to a ban, limitation, or restriction imposed only by employees, or can extend to union action. 33 Before the introduction of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ("Work Choices Act"), there was an equivalent definition of "industrial action" in the WR Act . I discuss the principal authorities below. This question has been resolved for the WR Act by the inclusion of a new definition as a result of the Work Choices Act . 36 The applicant disputed this approach. He said that it was impermissible to read words into the definition of "building industrial action" in the BCII Act by reference to the definition of "industrial action" in the WR Act ; and that, if anything, the absence of the relevant words in the definition of "building industrial action" in the BCII Act supported a meaning that was different from that of "industrial action" in the WR Act . The applicant also relied on the fact that the definition of "constitutionally-connected action" in s 36(1) of the BCII Act --- an element of "unlawful industrial action" in s 37 --- includes "the action [being] taken by an organisation". He submitted that this showed that the legislature contemplated that a union could engage in "building industrial action" without any involvement of employees. 37 As already indicated, the respondents' argument depended largely on the judgments of Full Courts of this Court in Davids and Giudice . Giudice involved an application by three unions for prerogative writs directed to a Full Bench of the Australian Industrial Relations Commission ("the Commission"), following the quashing of orders under s 170MW(1) of the WR Act . Subsection 170MW(1) gave the Commission power to suspend or terminate a bargaining period if satisfied that certain circumstances existed. Subsection 170MW(3) provided that a circumstance for this purpose was "industrial action" being taken to advance claims in respect of a proposed certified agreement, which was threatening to endanger the health or welfare of the population or cause significant damage to the economy. An issue arose as to whether "industrial action", as defined in s 4(1) of the WR Act , covered picketing. That is, if it is a restriction on the performance of work or on the acceptance of or offering for work. The word 'picketing' may simply describe a lawful assembly outside a workplace (or elsewhere) protesting about and drawing attention to conditions of employment in the workplace. The word 'picketing' may also describe an assembly which engages in protest of this type but also prevents or impedes access into and out of the workplace (or elsewhere). Even if used to describe the latter situation, it is unlikely that picketing is conduct comprehended by the expression 'a ... restriction on the performance of work' as it appears in para (c). Having regard to the context in which that expression appears, it is more likely to relate to restrictions imposed by an employee or a group of employees on the work they do so as to limit the scope of that work or the time or the circumstances in which it is done. While the expression 'a ... restriction ... on acceptance of or offering for work' in para (c) might comprehend picketing of the latter type which prevented employees who were continuing to work from attending the workplace it is unlikely to have such a wide meaning if the other elements in para (c) relate to circumstances of the type just discussed. It is likely that para (c) in its entirety is directed to the conduct of employees who engage in conduct limiting the work they do or the circumstances in which they offer to do it. (Emphasis added. The respondents relied on these passages. 38 In Davids , Wilcox and Cooper JJ, with whom Burchett J relevantly agreed, stated their agreement with the view tentatively expressed in Giudice . In Davids , the respondent union commenced proceedings for a declaration that the appellant employer had engaged in conduct in contravention of s 170MU of the WR Act and an order restraining the employer from giving effect to purported terminations of its employees' employment. The employer had sent letters of termination to employees identified on a picket line. The Court was, in part, concerned with an entitlement under s 170ML to take "protected action" during a bargaining period, and ss 170MM and 170MN which imposed limitations on permissible "industrial action" as defined in s 4(1) of the WR Act . The union argued that the picketing was "protected action" and, in consequence, the employer's action contravened s 170MU. The employer said that this was wrong for a number of reasons, including that the picketing was not "industrial action" and was, therefore, not "protected action". 39 I set out at some length the relevant passages in the judgment of Wilcox and Cooper JJ, since the respondents in this case relied heavily on their Honours' analysis and the parties' argument focussed on what their Honours intended by these passages. Under the heading "[i]s picketing 'industrial action'? The question has been touched on in several cases but not conclusively resolved. Counsel for NUW argued picketing does fall within the definition and particularly relied on para (c). Counsel said the picket imposed in this case was a "ban, limitation or restriction on the performance of work" by those whose trucks were stopped) that was adopted (by NUW and some of its members) in connection with an industrial dispute. Counsel acknowledged para (c) might be read as referring only to bans, limitations and restrictions on the activities of those imposing them, but they argued this reading unwarrantedly restricts the words used in the paragraph; the better view is that parliament intended para (c) to be given a wide interpretation. They argued picketing has been a familiar form of industrial action for generations; it is therefore unlikely that parliament chose to exclude it, when it adopted the current paras (a)-(f) in 1988. ... Counsel for Davids turned their opponents' argument back upon them. They conceded picketing was a well-known form of industrial action in 1988 [when the current definition was adopted] and argued it should therefore be concluded that, if parliament had intended to include picketing in the definition, it would have referred to it by name. 40 It is clear that an important consideration in Davids was the relationship between s 127 of the WR Act , as it then was, and the definition of "industrial action". This was because, by virtue of s 127 , the Commission had no power to deal with picketing if it was not "industrial action". As their Honours noted, French J had previously discussed this relationship in Communications Electrical Energy Information Postal Plumbing and Allied Services Union of Australia v Laing (1998) 159 ALR 73 (" Laing "), where his Honour had relied on Lockhart and Gummow JJ's discussion of picketing in Australian Builders' Labourers' Federated Union of Workers (WA Branch) v J-Corp Pty Ltd [1993] FCA 266 ; (1993) 114 ALR 551 (" J-Corp ") at 555-7. At 88 French J noted that the Muja picket line did not prevent entry and exit of staff of the power station who wanted to cross it, but 'fuel supplies to the power station were disrupted because fuel tankers did not want to cross the picket line'. It is apparent that it is a wider class of conduct than industrial action under s 127. At common law it is not necessarily unlawful but may become so if it involves obstruction and 'besetting': Sid Ross Agency Pty Ltd v Actors and Announcers Equity Association of Australia [1971] 1 NSWLR 760 at 767 (Mason JA). To constitute 'industrial action' under s 127 picketing must fall within the statutory definition of that term. It is not the performance of work. It can only qualify as industrial action if it amounts to a 'ban, limitation or restriction on the performance of work'. So a picket line whose purpose is to prevent or deter or discourage employees from attending on their employer's premises and from carrying out their work could constitute a ban for the purpose of s 127. There are therefore circumstances in which picketing may be the subject of an order as industrial action under s 127. In this case the Commission's order literally applied only to such participation in picket lines as was industrial action. The term 'industrial action' provided the umbrella class within which all classes of conduct specifically proscribed by the order had to fall. This was reinforced by the reference in para (4) of the order to the application of the statutory definition of industrial action 'for the purposes of this order'. The particular picket line did not prevent entry to the power station premises nor was there evidence to suggest that it deterred or discouraged entry. Fuel truck drivers, however, did not want to cross it. It is arguable that the order did not apply to such picketing activity as had been undertaken. Whether it did or not would no doubt require a close investigation of the facts concerning the establishment and conduct of the picket. That section did not use the words 'picket' or 'picketing'. The value of the passage cited by French J is that it demonstrates that activities falling within the general description of 'picketing' may range from a protest in which the picketers do no more than communicate their views to persons entering or leaving particular premises, through various degrees of hindrance to total prevention of ingress and/or egress. Activity that merely involves communication of information to persons entering or leaving a site is not 'industrial action', within the meaning of the definition in the Workplace Relations Act . Such activity clearly cannot constitute a 'ban, limitation or restriction on the performance of work' by the picketers. If the picketers do no more than communicate information, it is immaterial that the recipient of the information may be persuaded not to perform, accept or offer for work. On the other hand, if the picket takes the form of preventing or hindering people from performing, accepting or offering for work, its effect is to limit or restrict the performance of work, or the acceptance of, or offering for, work. Such conduct may be regarded as falling literally within para (c) of the definition of 'industrial action'. However, consistently with the tentative view of the Full Court in [Giudice], we think the paragraph ought to be read as applying only to limitations on the work of those imposing ban. The history of the legislation and policy considerations persuade us it is likely parliament intended to confine the paragraph in this way. (Emphasis added. Such conduct does not need the protection of s 170MT(2) because it is not actionable by anyone. Only picketing which involves obstruction and besetting, and is therefore an actionable tort, gives rise to policy considerations as to whether it was intended to be protected from suit, or should be so covered if the language will permit. Picketing which interferes with a person's liberty and freedom of movement infringes that person's common law rights; in particular, the right to free passage in public places and on public roads and footpaths ... There is a presumption in the interpretation of statutes that there is no intention to interfere with common law rights or basic common law doctrines unless the words of the statute expressly or necessarily require that result ... To interpret para (c) of the definition of 'industrial action' in such a way as to include picketing infringing upon the rights and freedoms of others would be to confer statutory immunity on such conduct; provided only it was engaged in upon proper notice to the employer and for the purposes of negotiating a certified agreement or an AWA. It would authorise interference with the rights, not only of the employer, but also of other affected persons who, but for the immunity, would have a right of action at common law ... 43 There is little doubt, however, that Giudice and Davids were much concerned with the nature of picketing, which, as these cases both noted, is a wider concept than industrial action. The applicant argued that the real question in Davids was whether picketing was capable of constituting "protected action" and that this consideration affected the Full Court's construction of the definition of "industrial action". Davids was not, so the applicant submitted, authority for the proposition that a union could not impose a restriction on the performance of work for the purpose of para (c) of the definition of "industrial action" in s 4(1) of the WR Act (and thus, as the respondents would have it, para (c) of the definition of "building industrial work" in s 36(1) of the BCII Act ). I accept this submission in part. That is, I accept that the Full Court in Davids was concerned with the scope of "protected action", as the passage set out at [41] above shows. Here the Full Court reasoned that, to the extent that picketing involved obstruction and "besetting", it could constitute "industrial action", but that it did not do so because such conduct was an actionable tort in respect of which the Parliament was not to be taken to have conferred statutory immunity. Subject to what appears at [49] below, this reasoning is independent of, and separate from, the Full Court's earlier conclusion that para (c) of the definition of "industrial action" ought to be construed so as to extend only to bans, limitations and restrictions imposed by employees performing the work in question. 44 The discussion of French J in Laing cannot support the contrary conclusion, since it was not specifically concerned with the question whether para (c) of the definition of "industrial action" referred to bans, limitations or restrictions imposed by those performing the work. Rather, it was concerned with the nature of picketing as industrial action. In any event, Laing was the subject of the Full Court's consideration in Davids. This case, however, proceeded by way of an agreed statement of facts, the parties agreeing that the union had contravened s 38 of the BCII Act , and his Honour's attention was not drawn to the relevant passages in Davids or Giudice . The same may be said of the earlier judgment of Le Miere J in Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (No 4) [2006] WASC 317 (" Leighton "), at [28]-[31] where once again reliance was placed on Laing without reference to Davids or Giudice . 46 Transfield Construction Pty Ltd v Automotive Food, Metal, Engineering, Printing and Kindred Industries Union [2002] FCA 1413 (" Transfield ") cannot be explained in the same way. At first blush, his Honour's analysis is apparently inconsistent with the view expressed in Davids that para (c) of the definition of "industrial action" in s 4(1) of the WR Act referred to bans, limitations or restrictions imposed by those performing the work. It is to be borne in mind, however, that the picket line in Transfield was made up of the applicant's and its subcontractors' employees. This fact may serve to avoid the apparent inconsistency. 47 In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Langley (unreported, 26 February 2004, Federal Court of Australia, BC200404666), where Finkelstein J was concerned with an application for an interlocutory injunction, it was sufficient for his Honour to note that whether or not picketing can be "industrial action", for the purposes of para (c) of the definition in s 4(1) of the WR Act was far from clear. As his Honour said (at [12]), a possible interpretation of the cases is that "picketers only engage in industrial action when they are limiting or restricting the performance of their own work". It also seems to be the view of Goldberg J in Original Juice Co Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2001] FCA 675 [at para 32]. Whilst this approach was broadly supportive of the respondents' position, it also emphasised that the effect of Davids and Giudice was far from clear, a proposition reinforced by the intervening decisions referred to by Finkelstein J and in paragraphs [45] and [46] above. 48 After argument, the applicant referred the Court, with leave, to the Commission's decision in NMHG Distribution Pty Ltd t/as Yale Asia Pacific v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 104 IR 158 (" NMHG "). This was an appeal to the Full Bench of the Commission, which raised the question "whether a ban imposed by the AMWU through its delegates employed by CUB at the Abbotsford plant on the performance of work by Yale employees at that plant [was] capable of coming within the meaning of the definition of industrial action in s 4(1) of the WR Act ". It follows that neither case constitutes binding authority on the question which arises in this case. Furthermore in [Giudice] the relevant passage was clearly not an integral part of the court's reasons for its decision, while in Davids the court based its decision for the most part on indications to be found in various sections of the Act that the legislature did not intend to include picketing in the statutory concept of industrial action ... This case is not concerned with picketing. In this case employees of one employer and their union ... placed bans on the performance of work by employees of another employer at the first employer's premises in circumstances where the employees of the second employer normally perform such work at those premises. ... As a matter of ordinary language, a prohibition by employees of CUB (and their union) on Yale employees carrying out work on the CUB premises when the Yale employees normally perform work on those premises can be described as a 'ban ... on the performance of work, or on acceptance for or offering for work' within the terms of pars (b) and (c) of the definition. There is no indication in the objects of the Act, in the objects of Pt VI or anywhere else in the Act that the legislature intended to exclude such conduct from the definition. We can see no basis for limiting the ordinary meaning of 'ban' where it appears in pars (b) and (c) of the definition to a ban imposed by employees in relation to their own work. 49 Of course, as the respondents noted, NMHG is not binding on this Court. It seems probable, however, that neither in Davids nor in Giudice was the Full Court considering the kind of situation that arose in NMHG . This supports the proposition for which the applicants contend that the effect of these two decisions must be assessed having regard to the context with which each was concerned. Further, it is plainly correct to say, as NMHG does, that the observation of the Full Court in Giudice was obiter dictum. The status of the observations in Davids is less clear, but, plainly enough, as already noted, the focus of Davids was on picketing. Accordingly, the observations in Davids on the scope of the definition of "industrial action" in s 4(1) of the WR Act are to be considered in this light. Furthermore, it is to be borne in mind that the Full Court in each case was not concerned with the BCII Act but with the WR Act , being different though related legislation. Whilst I must take such guidance from Davids and Giudice as I can, they provide no clear and definitive answer to the question whether or not the words "a ban, limitation or restriction on the performance of building work" in paras (b) and (c) of the definition of "building industrial action" in s 36(1) of the BCII Act refer to a ban, limitation, or restriction imposed only by employees, or can extend to union action. 50 Ultimately, the task for the Court is to construe paras (b) and (c) of the definition of "building industrial action" in s 36(1) of the BCII Act , having regard to their statutory purpose and context. The Court may also have regard to extrinsic material such as the second reading speech or the explanatory memorandum accompanying the bill to confirm that the ordinary meaning of these paragraphs is applicable or to assist in resolving any ambiguity in them: see Acts Interpretation Act 1901 (Cth), s 15AB. 51 Reference to s 3(1) of the BCII Act discloses that its main object is "to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants". The BCII Act provides, in s 3(2) , that this object is to be achieved in numerous ways, including by "ensuring that building industry participants are accountable for their unlawful conduct". In the context of this Act, the CFMEU is undoubtedly a building industry participant. Further, s 38 of the BCII Act is, plainly enough, concerned with preventing unlawful industrial action. Paragraphs (b) and (c) of the definition of "building industrial action" in terms contain no limitation of the kind for which the respondents contend. The expression "a ban, limitation or restriction on the performance of building work" in paras (b) and (c) may as naturally comprehend that which is imposed by a union as by employees. On its face, the expression is apt to cover the imposition of bans, limitations or restrictions by unions, employees to whose work the prohibitions and restrictions relate and, depending on the particular circumstances, to other persons (see, e.g., NMHG ). There is little, if anything, in para (b) or (c) of the definition to indicate that the Parliament intended that the expression should apply only to employees in respect of their work and not extend to other building industry participants, such as unions. Moreover, the main object of the BCII Act is apparently better promoted by a wide interpretation as opposed to the narrower one for which the respondents contend. Absent any countervailing consideration, I would therefore adopt it: see Acts Interpretation Act 1901 (Cth), s 15AA. 52 There is nothing else in the BCII Act that would indicate that these paragraphs were intended to be limited in the way the respondents contend. Indeed, other provisions in the BCII Act support the more natural construction for which the applicant contends. The definition of "constitutionally-connected action" in s 36(1) of the BCII Act (set out in [9] above) contemplates that unions (being "organisations" within the meaning of para (a) of the definition of "constitutionally-connected action") may take "building industrial action". If the expression "a ban, limitation or restriction on the performance of building work" in paras (b) and (c) of the definition of "building industrial action" refer only to that which is imposed by employees in respect of their work, and cannot refer to a prohibition or restriction on the performance of work imposed by a union, then it is unlikely that union action could ever amount to "building industrial action" (for which the union could be held responsible under s 38). This would be the case notwithstanding that the action was "constitutionally-connected action", being "action taken by an organisation", and otherwise satisfied s 37 of the BCII Act . This is because paras (a) and (d), being the other paragraphs of the definition of "building industrial action" in s 36(1) , in terms most naturally apply to action by employees, rather than other persons or entities. As noted previously, such a construction would not apparently best promote the main object of the BCII Act . 53 The respondents sought to answer this by reference to s 48(2) of the BCII Act , which provides that a person who is involved in a contravention of a civil penalty provision such as s 38 is to be treated as having contravened the provision. The applicant submitted, however, that the drafting of ss 36 to 38 "contemplate[d] that a trade union may contravene s 38 of the BCII Act without the need to call in aid" s 48. The effect of s 48(2) is that, once a person has contravened s 38 , another person, "who is involved in [the] contravention" (within s 48(2)) is treated as having also contravened s 38 , without there being a need to satisfy the requirements of s 37 of the BCII Act . Before this liability can arise, however, there must be a principal contravention of s 38 , which satisfies the requirements of s 37 (including the existence of "constitutionally-connected action"). I accept the applicant's submission that the legislative drafting of ss 37 and 38 , as amplified by the definitions in s 36 , show that the Parliament contemplated that a trade union might contravene s 38 of the BCII Act , independently of s 48(2) of the BCII Act . 54 Both paragraphs (b) and (c) of the definition of "building industrial action" in s 36(1) contain other internal limitations. Paragraph (b) of the definition is constrained by reference to "the terms and conditions prescribed by an industrial instrument", and para (c) is constrained by reference to "an industrial dispute" (as defined in s 36(4)). Neither of these additional requirements would support the respondents' contention that the paragraphs refer only to restrictions on work imposed by employees. They too are consistent with the broad construction that extends the paragraphs to union action, provided the other definitional requirements are met. 55 Finally, the proposition that the ordinary meaning of paragraphs (b) and (c) of the definition of "building industrial action" in s 36(1) is the applicable one in this statutory context is confirmed by reference to the Minister's second reading speech and the relevant explanatory memorandum. ... From this day forward, industrial action taken by unions to pursue the early negotiation of new agreements would not only be unprotected but also unlawful. If unions or other parties take unlawful industrial action they will be subject to civil penalties. This means that unions and those taking unlawful industrial action will be liable to financial penalties of up to 1,000 penalty units, currently $110,000, for a body corporate or 200 penalty units, currently $22,000, in other cases. 56 The Regulation Impact Statement ("RIS") that formed part of the Revised Explanatory Memorandum ("REM") accompanying the BCII Bill was to similar effect, referring to a need to regulate the conduct of unions and other industry participants (RIS at [9]-[10], [37]-[38]; see also [48]-[49] of Explanatory Memorandum) and to the fact that, in this context, the BCII Bill sought to clarify what constituted unlawful action. As the applicant noted in written submissions filed with leave after argument, the note in the REM on the definition of "building industrial action" said (at 5.126; see also 6.3 of Explanatory Memorandum) that "[b]uilding industrial action is defined broadly to encompass conduct by employers and employees that adversely affects the performance of building work", which by itself might tend to support the respondents' contention. This note must, however, be read in the light of the whole of the document in which it appears. The reference in this passage to the "Royal Commission" is a reference to the Royal Commission into the Building and Construction Industry, to which the BCII Act is a response: see REM at page 1; Explanatory Memorandum at page 2. 57 Thus, the BCII Act is evidently directed to industrial action in the building industry, with emphasis on the conduct of all industry participants, including unions, and is designed to overcome some of the perceived deficiencies of the WR Act . The considerations that informed the introduction of the BCII Act differ to an extent from the historical and policy considerations referred to by Wilcox and Cooper JJ in Davids , and which led their Honours to construe paras (b) and (c) of the definition of "industrial action" in s 4(1) of the WR Act as referring to a limitation on the performance of building work imposed by those to whom the work related. 58 As the second reading speech and REM to the BCII Bill make clear, there is a distinct relationship between the operation of the WR Act and the BCII Act . It is to be borne in mind, however, that when the definition of "industrial action" in the WR Act was amended by the introduction of s 420 , with the effect that it became clear in terms that a relevant "ban, limitation or restriction on the performance work" must be imposed "by an employee" (see [34] above), the Parliament did not adopt the same course with respect to the definition of "building industrial action" in the BCII Act . Whatever the position be with respect to the definition of "industrial action" in the WR Act , I am not persuaded that, in the context of the BCII Act , the reference to a ban, limitation or restriction on the performance of building work should be construed as if the Parliament had made this amendment to it. That is to say, the ban, limitation or restriction on the performance of building work to which paras (b) and (c) of the definition of "building industrial action" in s 36(1) of the BCII Act refer is not limited to a prohibition or restriction imposed by employees to whom the work relates and may refer to that which is imposed by a union, such as the CFMEU. It does not follow, of course, that every ban, limitation or restriction on the performance of work imposed by a union or other industry participant satisfies the definition of "building industrial action" in paras (b) and (c) of s 36(1) of the BCII Act . As noted already, each paragraph is constrained by other factors, including, in the case of para (b), "an [applicable] industrial instrument" and, in the case of para (c), the existence of "an industrial dispute". 59 For the reasons stated, I reject the respondents' submission that, even if proven, the conduct alleged in paragraphs 13 and 14 of the applicant's statement of claim could not amount to "building industrial action", as defined in paragraphs (b) and (c) of the definition in s 36(1) of the BCII Act , because, in order to constitute "building industrial action" within these paragraphs, the relevant "ban, limitation or restriction on the performance of building work" must be imposed by the employees in respect of whom the work relates. For the reasons stated, I would make this ruling without putting the respondents to their election. 60 For the reasons already stated, however, I would not rule on the remainder of the respondents' no-case submission unless the respondents elect to call no further evidence. The respondents are put to their election, in respect of all of the applicant's pleaded causes of action. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Ruling of the Honourable Justice Kenny. | whether "ban, limitation or restriction on the performance of building work" in paras (b) and (c) of the definition of "building industrial action" in s 36(1) of the building and construction industry improvement act 2005 (cth) covered only action of employees in respect of their work whether construed by reference to the meaning of "industrial action" in the workplace relations act 1996 (cth) "building industrial action" not limited to action of employees in respect of their work no case to answer submission on parts of the case whether discretion should be exercised to depart from general rule requiring party to elect not to call further evidence prior to ruling justice and convenience considered no election required on statutory construction argument election required before ruling on remaining parts of no case to answer submission industrial law practice and procedure |
The basis of that finding depended upon Mr Van Der Waarden's classification under the Award. The City contended that he was a Community Services Officer (Welfare and ancillary services). The Australian Municipal Administrative Clerical and Services Union (the Union), which brought the proceedings, contended that he fell within the broader classification of 'Officer or Employee' and thus had entitlements to shift penalties which were not payable to a Community Services Officer. 2 On 7 June 2005 the Industrial Magistrates Court made orders for the payment of penalties owing to Mr Van Der Waarden in the amount of $438.99 together with interest. The Court also ordered that the City pay to the Union its disbursements of $40. It imposed no penalty. 3 The City has appealed against the Industrial Magistrate's decision on the basis that he erred in failing to find that the position of Patrol Officer was within the classification of a Community Services Officer under the Award. The City also argued that the learned Industrial Magistrate had erred in finding that it breached the Award by 'compelling' Mr Van Der Waarden to work a 40 hour week. It also argued that the Court had no authority to order the payment of the Union's disbursements. 4 In my opinion the learned Industrial Magistrate did not err in the way he approached the interpretation of the Award and in the conclusion that as a Patrol Officer, Mr Van Der Waarden was not a Community Services Officer within the meaning of the Award. The learned Industrial Magistrate did err in finding that the City had breached the Award by 'compelling' Mr Van Der Waarden to work a 40 hour week. However the finding as to an underpayment will stand subject to an adjustment in respect of the amount awarded. I am also satisfied that the order that the City pay the Union's disbursements was not authorised by law and should be set aside. This progressive approach to community safety has many components, including an extensive safely [sic] patrol service. The successful applicants will have extensive experience in the Security field and effective interpersonal and customer service skills, along with demonstrated abilities in time management and conflict resolution. A current Certificate II Security Operation (or willingness to obtain one), police clearance, and an 'A' class drivers licence are essential. Shift work, including nights and weekend work will form part of the conditions of employment. He occupied that position until 1 January 2004 under the terms of an Employment Contract (the Contract) with the City which he signed. 7 On 17 December 2003 a claim was lodged in the Industrial Magistrates Court by the Union. The City was named as respondent. The claim alleged that the City had failed to comply with the Award by not paying relevant shift work, overtime and weekend and holiday penalties to Mr Van Der Waarden. The claim was brought under the Workplace Relations Act 1996 (Cth) (the Act). 8 A statement of claim attached to the claim form referred to the Award and a Certified Agreement (the Agreement) to which both the Union and the City are parties. The Union claimed that the City had breached cls 21.6, 21.8.1 and 22.1.1 of the Award, read in conjunction with cl 13 and Appendix 1 of the Agreement by not paying Mr Van Der Waarden entitlements to shift work weekend and holiday penalties under cl 21.6, shift work penalties under cl 21.8.1 and overtime penalties under cl 22.1.1 for the pay period 4 July 2003. The Union claimed an amount from the City of $730.57 plus interest. It also sought an order for the assessment of fines and penalties with any financial penalty to be paid to it. The claim turned upon the Union's contention that Mr Van Der Waarden came within the definition of 'Officer or Employee' as set out in cl 3.9 of the Award. The City argued that he was a 'Community Services Officer (Welfare and ancillary services)' under cl 3.4 of the Award. 9 In a judgment delivered on 25 August 2004 the learned Industrial Magistrate held that the Union's contention was correct. He found that Mr Van Der Waarden came within the definition 'Officer or Employee'. He made some consequential findings but no orders. He adjourned the case to a date to be fixed in relation to the orders to be made. 10 On 15 September 2004 the City instituted an appeal against the judgment. However at that time the Industrial Magistrates Court had not made any orders. When the matter came on for hearing on 18 April 2005 the appeal was adjourned having regard to the absence of any orders. The appellant was given leave to apply by written notice on or before 31 May 2005 to relist the appeal for hearing of submissions as to jurisdiction. In the event that it did not so apply the appeal would stand dismissed as from 1 June 2005 without prejudice to the right of the City to appeal against any judgment or order made by the learned Industrial Magistrate in the matter. Directions were also given that in the event that a new appeal were lodged on the same or similar grounds as the first appeal, then the appeal books and submissions filed in that proceeding could stand as the appeal books and submissions in the new appeal. The respondent shall pay to Michael Van Der Waarden the amount of $438.99. The respondent shall pay to Michael Van Der Waarden pre-judgment interest at the rate of 6% on the amount of $438.99 fixed at $26.34. The respondent shall pay to the claimant its disbursements of $40.00. There shall be no order as to penalty. The appeal was brought under s 422 of the Act . The position to which he was appointed, as designated in the Contract, was 'Patrol Officer'. Upon commencement, the Employee shall be entitled to a rate of pay of Level 3 Step 1 $34,688.08 per annum for a 40 hour week, being the current Award/Enterprise Agreement rate for the position of Patrol Officer. Such hours may be worked on any day of the week with a maximum of 10 hours to be worked on any one day. 17 Importantly, it was not in dispute between the parties that although the Contract specified a 40 hour week and 'usual hours' being an average of 80 hours per fortnight, Mr Van Der Waarden was paid, consistently with the Award and the Agreement, overtime on the basis that his ordinary hours of work were 38 hours as specified in the Agreement. It is a variation award made pursuant to a decision issued by the Australian Industrial Relations Commission on 12 October 1999 of the former Local Government Officers (Western Australia) Award 1988. 19 By cl 5 the Award is expressed to be binding on Local Authorities named in its First Schedule in respect of all their employees whether members of the Union, the Association of Professional Engineers and Scientists, Australia and on the Union and that Association. Provided that this definition does not include a person employed in a clerical capacity, for example Cashier/Receptionist, in a Recreation/Aquatic Centre. 22 Clause 3.9 defines the classification which the Union says applies to Mr Van Der Waarden, namely that of 'Officer or Employee'. Mr Van Der Waarden was appointed to a Level 3 position. 24 Clause 15.8.3 sets out characteristics of Level 3 positions (15.8.3(a)), the requirements of the job at that level (15.8.3(b)), the responsibilities of Level 3 jobs (15.8.3(c)), Level 3 organisational relationships (15.8.3(d)), the extent of authority at Level 3 15.8.3(e)). 25 Part 6 of the Award deals with 'Hours of Work, Breaks, Overtime, Shift Work, Weekend Work'. Clause 19 provides for the hours of work. By cl 19.1.1 the average minimum is 38 ordinary hours to be worked by mutual agreement Monday to Friday between 7.30am and 6pm. Part time employees will be paid proportionately to the hours in which they work. Increases during the term of this agreement shall be in accordance with Appendix 1. The Salary Schedule is set out by reference to the number of years from the comme ncement of the Agreement. Year 3 sets out two dates, 1 July 2003 and 2 November 2003 upon which the salary levels specified in the Schedule shall be struck. Clause 19.5.1 of the Award, dealing with the hours of duty of Community Services Officers, is unaffected by the Agreement. Each shift is of ten hours duration so that the total hours worked do not exceed an average of 38 hours per week. 37 The learned Industrial Magistrate set out the terms of the advertisement for the Patrol Officer position and the Position Description which was attached to his Employment Contract. He found that the applicable remuneration level was Level 3, Step 1, a sum of $34,688.08 per annum for a 40 hour week being 80 hours a fortnight with a maximum of ten hours a day. Mr Van Der Waarden worked with other officers as part of a team. Although the Position Description stated he was to receive shift loadings, he never received any. He was required to have a current Certificate II Security Operations Licence, a C Class drivers licence and a current police certificate. 38 Mr Van Der Waarden told the Court that he had worked in security since 1988. When he was interviewed for the job he was told that it entailed patrolling. He was trained by going out with other officers and being shown around the job. He was on probation for a time, supervised by a City Ranger. 39 Mr Van Der Waarden, whose evidence was apparently accepted by the Court, described his duties as safety, security, patrolling and liaising with ratepayers. He said he checked council buildings in the City's four precincts and was supplied with a vehicle for that purpose. He said he 'dealt with' anti-social activity, the safety of residents and security. He inspected council property, recreation centres, libraries and aquatic centres. He would report anti-social behaviour to the police or deal with it himself by talking to those involved. The police would be called in relation to criminal activity. He would report damage to Council property and check security alarms. Sometimes he would answer telephone calls and attend to the content of telephone calls received by the Council including matters relating to its 'Safer Citizens Program'. He attended three community events, a community centre, a fete and a youth group. He told the Court that there was a great deal of paperwork involved in the job including daily community contact sheets that had to be filled in and the writing of reports. He said he was filling a patrolling position. He had no qualifications or experience as a welfare officer or social officer. 40 Mr Van Der Waarden said he received his pay on a fortnightly basis for 80 ordinary hours at $16.83887 per hour and that he worked 60 hours in the fortnight under consideration. When cross-examined he said the Contract showed a salary of $32,462.06 with a figure of $34,688 being for a 40 hour week rather than a 38 hour week. He was always paid for a 40 hour week even if he didn't work it. Some fortnights comprised 70 hours and others 90 hours. He sometimes worked extra hours filling in for a sick officer and was paid the correct rate for overtime. 41 The roster on which Mr Van Der Waarden served was called the 'Safer Citizens Patrol Roster'. He reported to the team leader of the Safer Citizens Program. One of the objectives was to liaise with members of the community while on patrol. Eventually the Patrol Officers were abolished and replaced by more rangers. The rangers were law enforcement officers. 42 The Union produced a file in the Industrial Magistrates Court containing notes made by Mr Van Der Waarden on his patrols. She spoke of the Safer Citizens Program which had been commenced in the City before her arrival there. The program had developed from a report prepared in 2000 as a result of community concerns about law and order and safety. It proposed a visible presence by City officials in the face of inadequate police resources. It had an educational aspect involving work with other agencies, including workshops and seminars. It was aimed at anti-social behaviour generally and on specific occasions. There was, she said, a perception of more crime in the City than in fact was the case. The City wanted the community to feel safe. Ten patrol officers were appointed on the basis that they would be highly visible in the community. They were expected to be on the road and in contact with people and to give information and support. She agreed that the salary was $32,460.06 for a 38 hour week but as Mr Van Der Waarden worked 40 hours there was an extra two hours paid for at time and a half which brought the sum to $34,688. 44 The learned Industrial Magistrate held that the onus was on the Union to prove that Mr Van Der Waarden was not a Community Services Officer. He referred to the submissions put by the Union and by the City. He referred to a number of authorities quoted in those submissions and summarised the propositions for which they were cited. In the course of its submissions, the Union pointed out that in the fortnight following that which was the subject of its claim, Mr Van Der Waarden had worked 70 hours but been paid for 80. This gave rise to a set-off submission by the City. 45 Under the heading 'FINDINGS' the learned Industrial Magistrate referred to three cases which he said advanced 'the test of major and substantial part of the work' and mentioned other indicia that should be considered, all of which were covered in the authorities quoted by counsel. Really I have to decide the matter based on what the Employee did during the relevant fortnight. The encouragement, promotion and conduct of the community pursuits must be, and were, to improve general and social living standards but, and here is the problem, it must be in relation to those topics family support, services etc. The Employee had nothing to do with most of those areas; he was a Patrol Officer patrolling the City for the City's benefit. Those topics were not the major and substantial part of his work. The only applicable heading was " services " and he did far more than that and most of the work he carried out was not on that list. His work was far from primarily concerned with the social and living standards of the community. He made the observation that 'compelling work for any more than 38 hours breaches the Award'. He allowed an amendment of the hourly rate claimed to $16.428 and noted that the sum claimed would have to be recalculated on that amended rate. He allowed the claim for set-off. He applied a decision of the Western Australian Industrial Appeal Court in James Turning Roofing Pty Ltd v Peters 83 WAIG 427. He said he decided in line with that authority that there could be no prosecution to recover payments above awards. It is axiomatic that the difficulty posed in calculating quantum arises from the fact that I was asked to make the calculations based upon one single representative fortnightly period as opposed to calculating quantum over a full year or, alternatively, over the full period of the employee's employment in that classification. Clause 5 of the Employment Contract (Exhibit E) however provides that employees usual hours of work were to average 80 hours per fortnight. Any given fortnightly period may not correctly reflect the average hours worked over 28 days. In fact the target fortnightly period reflects a disproportionate amount of overtime worked and thus is not necessarily reflective of a usual fortnightly pay period. It follows that with set-off applying the amount underpaid for the period in issue is $438.99, as contended by the Respondent. The Learned Magistrate erred in law in ordering the Respondent to pay disbursements when s 347 of the Workplace Relations Act 1996 does not allow such an order to be made or in the alternative no order can be made without a finding that proceedings were instituted vexatiously or without reasonable cause. That question is answered by reference to the terms of the award classification and the duties which he promised to discharge under his Contract. See also Byrne v Australian Airlines Limited [1995] HCA 24 ; (1995) 185 CLR 410 at 425 (Brennan CJ, Dawson and Toohey JJ). 52 The interpretation of legislative instruments is dealt with in the Legislative Instruments Act 2003 (Cth). Awards and agreements made under the Act are declared, by s 7(1) of the Legislative Instruments Act , not to be legislative instruments --- see Item 18 in the table set out in s 7(1). 53 The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to '... the entire document of which it is a part or to other documents with which there is an association'. It may also include '... ideas that gave rise to an expression in a document from which it has been taken' --- Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J). Ambiguity or obscurity is not necessary to the application of s 15AB as extrinsic materials may be relied upon to 'confirm' that the ordinary meaning conveyed by the text is the true meaning of the provision [69]. 56 The attribution of purpose by reference to context in the wide sense does not await the discovery of an ambiguity in the text. The purpose or object underlying an Act is often determined by consideration of the statutory context --- CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ). Nor does discovery of an ambiguity precede resort to extrinsic material under s 15AB. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. Its words must not be interpreted in a vacuum divorced from industrial realities --- City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned --- see eg Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503-4 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. They bind the parties on pain of pecuniary penalties. The first two limbs bring together a role and a stated aim that seem mutually inapposite. The ordinary meaning of the word 'pursuit' in the context in which it appears in the Award is 'the action of following or engaging in something, as a profession, business or recreation' --- Shorter Oxford English Dictionary. By reference to the words ' community pursuits', a Community Services Officer's role is one which encourages, promotes or conducts business, professional and recreational activities. The word 'community' suggests a limitation by reference to the community served by the local authority which employs the officer. Community pursuits are those which are carried on within the particular community of the municipality. They may encompass activities engaged in by groups and perhaps even individuals within that community. The range of activities covered by the definition is limited in part by the definitions of Community Services Officer (recreation) and Community Services Officer (Arts, Theatre and Museum). They evidence an intention in the Award to carve out of the generality of the term Community Services Officer (Welfare and ancillary services) officers concerned with the encouragement, promotion and conduct of recreational activities and the promotion of artistic, theatrical and museum related activities. 59 The definition of the Community Services Officer's 'aim' begins with words of immense generality which could extend to all levels of government. That is the maintenance or improvement of general social and living standards. The limitation on its generality is itself broadly expressed but again is no doubt to be read within the framework of services provided or supported by the municipality. 60 The third limb of the definition that is 'the primary concern' of a Patrol Officer is again expressed with generality but no doubt can be read down, albeit to a limited extent, by reference to services provided and activities undertaken by the municipality. Given the broad nature of the whole definition and in that sense, its ambiguity, it is appropriate to have regard to the history, such as it is, of this class of employees. 61 The class of local authority employees known as 'Community Services Officers' has existed for over 25 years in various contexts. The functions embrace recreation, sports and arts activities, care of the aged, child care, youth work, general welfare work and other such activities. Various titles are used in respect of community service officers involved in these activities --- Community Art Officer, Recreation Officer, Youth Officer, Project Officer, Community Aged Care Officer, Community Development Officer and so on. The Local Government Association in that case proposed that, in the area of community service, the ordinary hours of duty would not exceed 38 hours per week to be worked as required by the employing authority except that by mutual agreement such ordinary hours could be worked at any time on any day to a maximum of 76 hours in any two week period or 152 hours in any four week period. Isaac DP observed that the proposal was new and designed to cover community service officers. There should be a provision under the award, it was submitted, for a council to come to an agreement with the individual employee for the standard 38 hours per week, or some multiple of it for longer periods, to be worked outside the spread of hours on any day of the week without incurring penalty rates. This history supports the welfare centred reading of the term which was adopted by the learned Industrial Magistrate. 63 The City submitted that the purpose of having a separate classification for Community Services Officers was to enable councils to employ them in positions which required working outside normal business hours without the application of penalty provisions such as overtime. The wish to achieve that degree of flexibility could apply to a number of positions other than Community Services Officers. To attach such flexible hours of work provisions to the position of Community Services Officer does not mean that flexible hours of work attaching to a position supports its characterisation as that of Community Services Officer. The question whether an employee is a Community Services Officer depends upon the duties contained in that person's contract of employment and not upon his or her hours of work. 64 It may be accepted that even allowing for the limitations already canvassed the definition of 'Community Services Officer (Welfare and ancillary services)' is of considerable width. For present purposes it is unnecessary to exhaustively define its limits. It is sufficient to determine whether the position of Patrol Officer as described in Mr Van Der Waarden's Contract falls within it. 65 The position of Patrol Officer was created as part of the implementation of the City's Safer Citizens Program. Its purpose was to provide a publicly visible council presence in the municipality, to report possible criminal or anti-social conduct to appropriate authorities, to provide evidence in criminal proceedings and to promote Community Safety and Crime Prevention Programs. The range of activities falling within the position description in the Contract was exemplified by the things that Mr Van Der Waarden did in the discharge of his duties although they do not of themselves affect the construction of his Contract. 66 The concept of a Community Services Officer (Welfare and ancillary services) in the Award covers a variety of possible positions involving different sets of duties. There is a range of position descriptions that might fit within it. However, when a comparison is made between the things Mr Van Der Waarden was required by his Contract to do and the things set out in the definition of Community Services Officer (Welfare and ancillary services) the latter does not, in my opinion, embrace the former. On a logical analysis of the Award definition into its disparate elements it would be open to argue that his job fell within the generality of the 'role' of such an officer. However, that generality is to be read down in the light of the conjunctive alternatives namely the aims or concerns spelt out in the Award. The activities of a Patrol Officer were not, in my opinion, concerned with 'the maintenance or improvement of the general social and living standards with regard to family support, services, incomes, welfare, employment, education, health, housing, children's youth, aged and domiciliary services ...'. (emphasis added) Nor was it concerned with 'social and living standards in the community'. That concept has more of a private and domestic welfare connotation about it than any direct relationship to public safety. Although it was common ground that Mr Van Der Waarden was not a Law Enforcement Officer within the meaning of the Award, his position as Patrol Officer was more akin to that than the Community Services Officer (Welfare and ancillary services). 67 The preceding approach was that essentially adopted by the learned Industrial Magistrate. It depended upon his appreciation of the scope of the Patrol Officer job and the limits, such as they are, in the Award definition of Community Services Officer (Welfare and ancillary services). Given the width of the language used in the Award and in the Contract the task of relating one to the other is not easy. It is a task which the Industrial Magistrate got essentially right. He had proper regard to the limits in the definition. They are supported by the history, sparse as it is, of the use of Community Services Officers in local government awards. In my opinion the learned Industrial Magistrate did not err. None of the elements of the first ground of appeal are made out. 69 The learned Industrial Magistrate found that the City had breached the Award by 'compelling' Mr Van Der Waarden to work more than 38 hours per week. In so finding he erred. The Contract stated, in cl 1.2, that the Award and the Agreement applied to the employment. Mr Van Der Waarden agreed to work a 40 hour week. That Contract was to be read subject to the Award and to the Agreement. The Agreement leaves in place cl 22.8.2 of the Award which gives an employee a wide discretion to refuse to work overtime. The learned Industrial Magistrate erred in this respect but his error was not reflected in any of the orders which he made. 70 So much having been said, the Contract had the capacity to mislead an employee as to his or her rights under the Award and the Agreement. The prescription of hours of work in such contracts should be expressly qualified by reference to the provisions of the Agreement and the Award particularly in relation to overtime. No order follows from this finding in light of the orders made by the Industrial Magistrate. There is, however, a possible adjustment, indicated by Ms Boots, to the underpayment ordered as there was built into the calculation finally decided by the learned Industrial Magistrate an offset for compulsory overtime hours. The parties will advise of a figure to reflect that adjustment. The basis upon which that order was made is not apparent in the light of s 347 of the Act. I certify that the preceding seventy three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | award interpretation of award classification approach to interpretation patrol officer employed by local authority whether employed as community services officer (welfare and ancillary services) or as 'officer or employee' whether contract of employment providing for 40 hours breaches award or certified agreement specifying 38 ordinary hours per week contract incorporating payment of overtime no breach order for payment of disbursements whether authorised by workplace relations act 1996 (cth) workplace relations |
He first arrived in Australia in June 1996 to attend a Tae Kwon Do event and he returned to Nepal on 17 June 1996. He returned to Australia on 11 December 1998. Since then, he has resided in Australia except for periods in March, June and July 1999 when he returned to Nepal. The appellant, having previously applied for visas of various other kinds, applied for a protection visa on 11 September 2003. The appellant claimed to fear persecution from Maoist groups within Nepal. 2 A delegate of the first respondent refused the appellant's protection visa application on 11 November 2003. The appellant applied to the Refugee Review Tribunal (the "Tribunal") for a review of this decision. On 25 May 2004, the Tribunal wrote to the appellant advising him that his hearing was scheduled for 17 June 2004 and stating that it would not be able to make a decision in the appellant's favour based only on the material then before it. On 17 June 2004, the appellant's advisor sought an adjournment on the basis of the ill health of the appellant. The Tribunal notified the appellant that the hearing was adjourned to 21 June 2004. On 21 June 2004, the appellant did not attend the hearing. He contacted the Tribunal on that day and said that he wanted to postpone the hearing until later that day so that he could obtain the services of another advisor. The Tribunal informed the appellant that it had adjourned the hearing until 28 June 2004. My reason for this is that I found my previous migration agent, who was representing my case, to be unhelpful towards my case. Since then I have decided to change my representative and find a new lawyer. But unfortunately due to a lack of time needed for the new representative to update him/herself on my case, I haven't have had [sic] success in finding anyone willing to represent me at the present moment. Since I find myself unready for the hearing, due to lack of legal consultation, I have decided not to attend the hearing. I implore you to carry out the hearing in my absence and make whatever decision you feel right. The appellant did not attend the hearing on 28 June 2004 and the Tribunal proceeded in his absence. I note that the applicant has been assisted by an advisor right up to the first date on which a hearing had been appointed. The applicant has apparently not retained another advisor. Had he done so, and had the new advisor sought time in which to prepare submissions, a request for a further postponement for this purpose would have been considered on the merits as then apparent. In the absence of such communication, I have decided that it is appropriate to determine the matter on the basis requested by the applicant. The Tribunal said that without answers to these questions it was unable to be satisfied that there was a real chance that the appellant would be persecuted for a Convention reason. 5 The appellant filed an application for review in the Federal Magistrates Court on 13 August 2004. Amongst other things, the appellant claimed that the Tribunal had breached the principles of natural justice by not informing him that it would have granted him an adjournment had he appointed an advisor and requested an adjournment. The appellant did not appear at the hearing before the Federal Magistrate. 6 Pursuant to Rule 13.03A of the Federal Magistrates Court Rules 2001 (Cth), the learned Federal Magistrate proceeded with the hearing on 27 July 2005 in the appellant's absence. In reasons for judgment delivered that day, his Honour found that, as the appellant had been given adequate notice of the hearing before the Tribunal, and had clearly requested that it proceed in his absence, there was no breach of natural justice. The appellant appealed against his Honour's judgment to this Court. 7 In written contentions, the appellant repeated the argument he presented in the Federal Magistrates Court. 8 This matter was listed in this Court for hearing at 10:15 am on 16 June 2006. So, I will be enable to be fit to attend the hearing on 16 June 2006 at 10:15 am. 9 Although the appellant's facsimile did not request an adjournment of the hearing, I adjourned the hearing until 28 June 2006 to provide him with an opportunity to attend. However, I directed my associate to write to the appellant informing him that "[t]he Court will not grant any further adjournments of the hearing in this matter without sworn evidence from you (either in the form of a sworn affidavit or sworn oral testimony before the Court) as to why an adjournment should be granted. " The appellant's wife telephoned my chambers on 19 June 2006 and confirmed that the appellant had received this letter. 10 At 3.30 pm on 27 June 2006 the appellant sent another facsimile to my chambers. Unfortunately I won't be able to attend the hearing on 26th June 2006 at 9:00 am. I would except the outcome of the decision of the hearing in this matter without my presence infront of Chambers of Justice Kenny. Nor has the appellant sought an adjournment of the hearing and no satisfactory basis for one is shown. As he foreshadowed, the appellant did not appear at the hearing this morning. In all the circumstances, pursuant to O 52 r 38A (1)(d) of the Federal Court Rules , it is appropriate to continue the hearing in his absence. 11 The first respondent submitted that there was no breach of s 426A or of natural justice. The first respondent noted that s 426A of the Migration Act 1958 (Cth) provides that, if the applicant is invited to appear before the Tribunal and does not appear, then the Tribunal "may make a decision without taking any further action to allow or enable the applicant to appear before it". The first respondent claimed that the Tribunal invited the appellant to appear before it and that the record showed that the appellant had received this invitation and was aware of the date of the hearing. Further, the appellant had informed the Tribunal that he would not appear and had "implored" the Tribunal to continue in his absence. The first respondent argued that there is no breach of natural justice where the Tribunal proceeds in such circumstances. The first respondent also referred to Minister for Immigration and Multicultural Affairs v Lay Lat [2006] FCAFC 61 at [66] and SZCIJ v Minister for Immigration and Multicultural Affairs [2006] FCAFC 62 at [7] - [8] . 12 I accept the first respondent's submissions. In S58 of 2003 v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 283 (" S58 ") a Full Court of this Court considered a similar claim. In S58 , as in the present case, the Tribunal had informed the visa applicant that it could not make a favourable decision solely on the basis of material then before it. The visa applicant's representative had then informed the Tribunal that the applicant would not appear at the hearing and the Tribunal should proceed "on the papers". The Tribunal proceeded with the hearing in the applicant's absence. In its reasons, the Tribunal had noted that, had the applicant appeared, it would have questioned him in some detail regarding certain documents and their contents. The applicant claimed that the Tribunal had breached procedural fairness by not informing him of its concerns about these documents. The Full Court, constituted by Ryan, Merkel and Conti JJ, held that there was no breach of procedural fairness. He was given an invitation to attend a hearing before the Tribunal which, apparently on advice, he deliberately declined. Having done so, he is to be taken to have assumed the risk that inconsistencies, omissions or other unsatisfactory features of his documents would be noted by the Tribunal without his having an opportunity to explain or clarify them. 13 Much the same principles apply in this case. Rather than request an adjournment, the appellant advised the Tribunal that he was not going to appear at the hearing. He cannot now complain that he was denied an opportunity to appear. The appellant says that he would have requested an adjournment if the Tribunal had informed him that it would have granted one. Nevertheless, the fact remains that the appellant did not request an adjournment. Moreover, the appellant implored the Tribunal to continue in his absence. There is no breach of procedural fairness in these circumstances: see further SZEYH v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 93 per Jacobson J. 14 Further, I note that where the Tribunal decides to reschedule a contemplated hearing at the request of an applicant, s 425A does not apparently apply to the notice of the rescheduled hearing: see SZDQO v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1026 and SZBZO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 494. 15 For these reasons, I would dismiss the appeal with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | appellant failed to appear before tribunal tribunal held hearing in appellant's absence no breach of procedural fairness migration |
The notice of motion came on for hearing before me on Tuesday 10 November 2009. The parties in action NSD 408 of 2008 had been given notice of the application and were represented by counsel. The applicant indicated prior to the hearing of the notice of motion that it no longer sought consolidation of the relevant proceedings but sought the following orders: These proceedings be heard by the same judge as in action NSD 408/2008. These proceedings be heard immediately following action NSD 408/2008. The evidence in action NSD 408/2008 stand as evidence in these proceedings. Costs of the motion be in the cause. Counsel for the ACCC did not oppose the orders sought by the applicant. However, the respondent opposed the orders sought. The applicant commenced this proceeding by application filed 30 March 2009, together with a notice of motion seeking interim injunctions restraining the respondent (Allphones) from dealing with the applicant other than on the basis that he has validly exercised his right to renew the franchise agreement between the applicant and Allphones dated 1 April 2009 until further order; and other interlocutory relief. On 31 March 2009, an interim injunction in these terms was made until 6 April 2009. On 6 April 2009, consent orders were entered to the effect that Allphones gave an undertaking to the applicant in lieu of an injunction on terms akin to the interim injunction ordered on 31 March 2009, and an expedited trial was listed to take place on 22 July 2009. The consent orders made on 6 April 2009 also gave directions addressed to such matters as pleadings, discovery, the filing of witness statements and the preparation of a book of documents for trial, as well as the setting of the trial date, which was then provisionally listed on dates between 22 July and 31 July 2009. On 18 May 2009, the applicant filed a notice of motion seeking leave to file and serve an amended application to convert the proceeding into a representative proceeding. On 9 June 2009, the Court ordered that the trial listed to commence on 22 July 2009 be vacated. On 23 June 2009, the Court, amongst other things, granted leave to convert the proceeding into a representative proceeding (see Weimann v Allphones Retail Pty Ltd [2009] FCA 673). The Court then made further directions as to the conduct of the matter towards trial in the same areas as before and the proceeding was adjourned to a further directions hearing on 2 September 2009. The amended application and amended statement of claim was filed and served by the applicant on 25 June 2009. On 30 June 2009, Allphones filed a notice of motion seeking leave to appeal the representative proceeding judgment of 23 June 2009 converting the proceeding into a representative proceeding. Allphones filed and served its defence and cross-claim on 7 July 2009 in accordance with the orders previously made on 23 June 2009. On 8 July 2009, the applicant filed and served a notice of motion seeking interlocutory relief on behalf of ten franchisees who formed part of the group represented by the applicant. That notice of motion was heard on 22 July 2009. Following submissions of counsel for the parties, the Court tentatively listed the proceeding for trial from 3 to 11 December 2009. The Court on that occasion emphasised that it was appropriate to set the trial date and proceed on the basis that the proceeding would go to a hearing before the end of 2009. On 31 July 2009, the Court ordered by consent that Allphones have leave to join nine franchisees who were the beneficiaries of undertakings earlier given as cross-respondents and granted Allphones leave to file an amended counter claim which addressed amendments necessary to identify the cross-respondents. On 31 July 2009, the applicant and cross-respondents filed a reply and defence to cross-claim. By the orders made 23 June 2009, these pleadings were due to be filed some 10 days earlier on 21 July 2009. One of the cross-respondent group members subsequently indicated its desire not to be part of the representative proceeding and Allphones then indicated its intention formally to discontinue its cross-claim against that cross-respondent. By reference to the orders made 23 June 2009, Allphones has provided discovery as has the applicant and first cross-respondent. However, the second to tenth cross-respondents have not given discovery. While on 23 June 2009 the applicant was ordered to file and serve witness statements signed before 25 August 2009, that order has not been complied with. On 2 September 2009, at the directions hearing in relation to the proceeding, counsel for the applicant raised the issue of consolidation of these proceedings with the proceedings commenced against Allphones by the ACCC that were in the docket of Justice Foster in the New South Wales Registry of the Federal Court of Australia. Counsel also mentioned that private mediation was proposed to commence. It was submitted that discovery generally was premature. Counsel for Allphones expressed concern that the current trial dates should not be avoided. The Court then confirmed the view that the proceeding should stay "on track" for a trial in December 2009. Consequently orders were made extending the time for discovery to 31 August 2009, time for filing statements of witnesses to 28 September 2009 and adjourning the directions hearing to 5 October 2009 with a direction that parties file minutes of proposed orders leading to trial and the conduct of trial on 2 October 2009. The applicant was also ordered to disclose the identity of group members to the respondent by close of business 3 September 2009. Since that time, while identify of group members has been disclosed by the applicant and additional discovery made by the respondent and the time for filing witness statements further extended, such witness statements have not been filed by the applicant. They were due to be filed in the light of consent orders by 24 October 2009. On 22 October 2009, the matter came on again for a directions hearing. Counsel for the applicant foreshadowed that the applicant was considering making an application to consolidate the proceedings with the ACCC proceedings before Justice Foster. On 4 November 2009, the matter again came on for directions before me and the question of consolidation or alternative orders, which were then the subject of the recently filed notice of motion, was listed by me for hearing on 10 November 2009. If it be the case that there are significant common questions of law or fact between the two sets of proceedings --- those before Justice Foster and this proceeding --- then commonsense, confirmed by a long line of authority, would suggest that the two proceedings not be determined separately but that they either be consolidated or heard together in an appropriate fashion: see for example Cousins v Cousins (1948) 51 WALR 57 ; Pegasus Gold Inc v Bateman Project Engineering Pty Ltd [1999] FCA 490. Indeed, O 29, r 5 of the Federal Court Rules 1979 (Cth) permits the Court, in an appropriate case, to consolidate proceedings or order they be tried at the same time or one immediately after the other or may order them to be stayed until the determination of them. Plainly, in many circumstances it will be sensible to make an appropriate order under O 29, r 5 to avoid the possibility of disparate findings of law or fact being made in relation to common issues. Additionally, in some cases convenience and efficiency may also dictate the close association of concurrent proceedings so that they are not conducted separately of each other. Senior counsel for the applicant emphasises that in both proceedings the terms of the Old Agreement will be compared and contrasted with the New Agreement that Allphones has been requiring or desiring franchisees to execute on the exercise by franchisees of their right of renewal of the Old Agreement that currently controls the relationship between the parties. In general terms, however, the issues raised by the current proceeding before me involve the proper construction of the Old Agreement so far as the right of a franchisee to renew is concerned, as well as separate allegations concerning unconscionable conduct by Allphones towards franchisees. The details once again are set out in Weimann v Allphones Retail Pty Ltd [2009] FCA 673. In its written submissions, the applicant says the following common questions of law or fact arise: By contrast, Allphones contend there is minimal overlap on material issues. First, it contends that the applicant alleges that Allphones has impermissibly required franchisees under the Old Agreement to sign the New Agreement as a condition of renewing their franchise. Secondly, that the applicant's case is that Allphones has engaged in conduct designed to unreasonably or unfairly pressure the applicant and other franchisees to execute the New Agreement and thereby has engaged in unconscionable conduct contrary to s 51AC of the Trade Practices Act 1974 (Cth) (TPA). Allphones contends that to the extent that the current proceedings before me allege breaches of statutory obligations, those matters are wholly directed towards supporting the applicant's case in contract or unconscionability and are all directed towards the question of renewal of the Old Agreement. Allphones says that by contrast the ACCC proceeding before Justice Foster is brought by a regulatory body in relation to alleged breaches of trade practices law in which the following relief is sought: Allphones says that the declaratory and injunctive relief sought by the ACCC relates to alleged misleading and deceptive conduct or false or misleading conduct regarding the alleged representations to be found in brochures, handouts and documents prior to the entry into their respective franchise agreements. Additionally, the ACCC claims declarations and injunctions in respect of commission payment summaries and bonuses and rebates in respect of which the proceedings currently before me make no claims for relief. Consequently, in short, Allphones say the overlap in the proceedings relate only to the existence of the franchise agreement in one common form which provides the background (in different circumstance and context) to each action. In other words, the terms of the franchise agreement, other than the construction of the renewal clause merely provide a backdrop to the questions of fact and law in issue in the proceedings. Allphones also complain about delay and prejudice if the orders sought are made. The submissions made on behalf of Allphones are not without force. The validity and construction of the renewal clause of the Old Agreement is not a primary issue in the ACCC proceedings before Justice Foster. However, it is a primary issue in the proceeding before me. The additional unconscionability claims made in the proceedings before me are more difficult to assess. They go to restraining Allphones from maintaining that conduct in relation to the renewal by the franchisees of their Old Agreements. However, the conduct complained of appears, in many respects to provide a foundation for the ACCC's action before Justice Foster. In substance, the nature of the proceeding presently before me concerns the private contractual rights between Allphones and its franchisees. The ACCC proceedings before Justice Foster, again in broad terms, have to do with enforcement of the TPA designed to achieve fair trading at a broad policy level. That said, the ACCC action, if successful, may well have important ramifications for the conduct of the franchise relationship between Allphones and its franchisees, even though not primarily concerned with the proper interpretation or construction of the contractual relationship between the parties. While a close examination of the causes of action relied on in the separate proceedings may, as Allphones contends, suggest --- at least on fine analysis --- that there are real conceptual differences between the two proceedings, I remain concerned that, at a practical level, there is a risk that competing findings of fact and law to be made in relation to issues raised by these various causes of action could intrude upon the proper administration of justice in this case. However, there are also issues of delay and prejudice and the rights of Allphones to an early trial in an orderly fashion. When one takes into account the orders that have been made by me during the course of this year, in order to protect on an interim or interlocutory basis the interests of the applicant and subsequently other franchisees pending a trial of the primary issues raised in this proceeding and the constant attempts to focus the parties' attention on a trial to be held before the end of 2009, a case is built to suggest it is inappropriate at this point to, in substance, vacate the current trial dates in this proceeding and transfer this proceeding to the docket of Justice Foster so he can determine when the proceeding should go to a hearing subsequent to the trial of the ACCC proceeding. See generally Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 ; (2009) 258 ALR 14. To some extent the applicant in the proceeding before me discloses it is not ready for a trial in December because it is a small firm that has been engaged in the conduct of the appeal against the representative proceeding decision and in the mediation of the dispute between Allphones and the franchisees, which was the subject of further proceeding before McKerracher J recently: see Weimann v Allphones Retail Pty Ltd (No 2) [2009] FCA 1230. However, the parties to these proceedings have understood right through the year since the matter first came before me, that all parties are entitled to the earliest possible determination of the important commercial issues raised here. The matter is now clouded, however, by the ACCC proceedings against Allphones in Sydney. This is a new factor that must be considered. For me, the most important consideration is whether there truly is a significant overlap of issues, particularly the legal issues informed by the facts in dispute between the parties, such that it would, in the end, be more convenient and efficient, and ultimately just, to have one judge hear all proceedings. This calls for the exercise of judgment; there is no uniquely right answer. It is a discretionary consideration. While I do not consider that the conceptual or primary legal causes of action significantly overlap, a range of the issues which are likely to come before Justice Foster on the ACCC complaint will, I believe, require careful consideration of the Old Agreement, its terms and the conduct of Allphones towards franchisees. While I do not think that all of the issues that will be agitated in the ACCC proceedings before Justice Foster will be at all identical with those that need to be determined in the proceeding currently before me, I consider there is a real, not fanciful risk, that if two judges were separately to determine these two sets of proceedings they might possibly form differing views about some of the underlying facts in dispute as well about the contractual obligations and related rights of the parties under the Old Agreement and proposed New Agreement. Such an outcome, to say the least, would be unfortunate. It is, however, precisely the sort of consideration that, in my view, weighs the final determination that I need to make in favour of allowing the motion currently before me. It is, in the end, my view that it will be best if the one judge hears the two different sets of proceedings involving Allphones and its franchisees, and the ACCC, to avoid any risk of different findings of fact or different findings of law that will determine or influence the outcome of the different proceedings. However, it is not without some reluctance that I come to this decision, because I consider that the applicant has been well aware for some time that the Court has considered that this proceeding should proceed expeditiously to trial in the interests of all parties. I recognise that this decision undoubtedly will cause some prejudice to Allphones. It has prepared for a December trial of this issue. That trial will now be delayed. That produces commercial insecurity for it in its dealings with its franchisees --- although it may be said, also for the franchisees. It also adds to the costs of the proceedings no doubt. However, against that, by having the two proceedings before the one judge means they can be more conveniently and efficiently conducted and the risk of discordant findings avoided. This consideration is ultimately of fundamental importance to all parties an what guides my determination of the motion before me. No doubt, once these proceedings go into the docket of Justice Foster, he will ensure that the interests of all parties are adequately protected by bringing this matter to an early hearing and determination. The Court orders: These proceedings be heard by the same judge as hears Action NSD 408/2008. These proceedings be heard immediately following Action NSD 408/2008, or as that judge directs. The evidence in Action NSD 408/2008 or so much as that judge directs, stands as evidence in these proceedings. Costs of the motion be in the cause. These proceedings be listed before Justice Foster on a date to be fixed for a directions hearing. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | whether proceeding in western australian registry should be heard after proceeding in new south wales registry by the judge who hears the other proceeding orders to that effect made practice and procedure |
Two Notices of Motion were made returnable at the directions hearing. By the first Notice of Motion filed on 11 May 2009, the applicants sought leave to file and serve a Further Amended Statement of Claim in the proceeding. By the second Notice of Motion filed on 15 May 2009, the third respondent sought an order that the proceeding be dismissed; and that the applicants pay the third respondents' costs of and incidental to the proceeding on a solicitor and own client basis, or alternatively on a party and party basis. The first respondent was given leave to file a notice of motion returnable together with the other notices of motion, by which an order was sought that the proceeding be dismissed. Each application was heard together. On the hearing of each motion, the applicants, by counsel, sought an adjournment of each motion to enable the applicants to file a further amended statement of claim. It is true to say that the conduct of the matter by the applicants has, since its inception, reflected a systemic failure to prosecute the proceeding in a way which comes to grips with the obligation of the applicants to plead in a disciplined and clear way a statement of claim which formulates a recognisable cause of action or the various causes of action upon which the applicants seek to rely. When the matter came before the Court on the last occasion on 15 April 2009 an order was made unopposed that the Further Amended Statement of Claim delivered at that point of the proceeding be struck out. The Court further ordered, unopposed, that the applicants file and serve any notice of motion for leave to re-plead the causes of action, by 11 May 2009. A number of orders were also made in relation to the disposition of costs arising out of various earlier notices of motion filed and agitated by particular parties. I will not repeat the content of those orders in these reasons. The orders are set out together with the reasons in support of those orders in Van Der Velde v Ng [2009] FCA 529. That judgment was delivered ex tempore on 15 April 2009. In the course of those reasons I made these observations: In relation to the first matter concerning the general conduct of the proceedings, there is an area for some, I have to say, considerable degree of criticism. Without going to the total detailed chronology of the matter, it is fair to say that Dowsett J some considerable time ago, expressed very clear concerns about the formulation of the statement of claim as originally filed, in the sense that it contained very many allegations of mixed questions of fact and law and the pleading failed to set out in a coherent and clear sequence the precise formulation of the facts relied upon by the applicants, leading to the relief that ought to be ordered by the court arising out of those facts. That is to say, the causes of action, both statutory and otherwise, were not plainly and clearly formulated. It is not uncommon, of course, in litigation for pleadings to be amended and the court recognises that as instructions are more clearly formulated and fresh matters arise it may be necessary to make amendments to a pleading. However, in this particular case the difficulty seems to me to be that there was no real focus on the imperative of reducing the statement of claim to a concise and plainly coherent document in the way Dowsett J had described. I should add that orders were made on 19 December 2008 and on 16 February 2009 in relation to this very question of the need to amend the statement of claim and, of course, those orders provide for a timeframe within which those amendments were to be made. Those orders were made with the support of the applicants. Unfortunately, those orders were not satisfied and a document was ultimately filed which was an amended statement of claim followed by a further amended statement of claim. On one of the occasions when the matter was before the court previously, I think on 16 February 2009, I made some observations in reasonably precise terms, I thought, that the statement of claim lacked the rigour and discipline and coherence that is required of a pleading according to the rules of this Court and I suggested to the applicants' advisers that it would be useful to formulate the pleading in a way which addressed the chronology of events dispersed throughout the existing amended pleading and reduced the material facts to the truly material facts properly particularised in a sequence which makes it plain that those facts, if proved, would give rise to the relief sought. Against the background of the history of the failure to formulate a coherent pleading, the Court made the orders striking out the Further Amended Statement of Claim and imposing a discipline upon the applicants' legal adviser to file any notice of motion for leave to re-plead by 11 May 2009. The notice of motion for leave to re-plead was filed on 11 May 2009 but not served on the parties to the proceeding until 20 May 2009. The application for leave is not supported by any affidavit from the solicitor for the applicants annexing a proposed further amended statement of claim. I will not describe each new proposed pleading by iterations of the word "further" in each case. On the hearing of the motion, the applicants were represented by Mr Whitten of counsel. Mr Whitten sought and obtained leave to read and file an affidavit from the solicitor for the applicants, Mr Peter Vincent Mills, sworn 20 May 2009. In that affidavit, Mr Mills explains that he is a partner in the firm representing the applicants. He says that the reasons for the failure by the applicants to file and serve a proper application supported by an affidavit exhibiting a proposed draft further amended statement of claim is the burden of his work obligations rather than any default on the part of the applicant parties to the proceeding. He says that due to those obligations, he has not been able to attend to prosecuting the proceeding since 15 April 2009. That circumstance also explains the late service of the Notice of Motion by which leave is sought. Mr Mills says by his affidavit that he provides an undertaking to the Court and the parties that the proceeding will be prosecuted "as far as it is within my power to do so, with due diligence". Mr Mills says that he has engaged Mr Whitten and has briefed counsel with certain material. Counsel has been requested to draw an amended, that is, a new statement of claim as a matter of urgency. Mr Whitten advises the Court that he was retained yesterday and having regard to his Court commitments it will not be possible for him to turn his mind, consider the issues and formulate a proposed amended statement of claim, immediately. Not unreasonably in that sense, Mr Whitten seeks a period until 22 June 2009 as a date by which these things might be done. In real effect, the proceeding will start again from 22 June 2009. The application is resisted by the third respondent. The first respondent adopts the submissions of the third respondent. The third respondent says that the failures on the part of the applicants to prosecute the proceeding, call for, according to established principle, the exercise of the discretion in making an order that the proceeding be dismissed. The proceeding has, it is said, been characterised by a continuous and enduring failure to prosecute the proceeding. The pleading is criticised not simply on the footing that it fails to contain content a respondent would prefer to see pleaded. It is said to be embarrassing in the well understood sense of that term in that it simply cannot stand, metaphorically, on its own two feet in any of the various forms in which it has been presented. Mr Whitten will now reformulate the pleading. Nevertheless, the first and third respondents press examination of the chronology of events as revealing such a profound failure to address issues and comply with Court orders that the proper exercise of the discretion requires the dismissal of the proceeding. For example, the matter was reviewed before Dowsett J on 4 February 2008 with strong criticism of the pleading and a commitment was given by the applicants to re-plead the Statement of Claim. The applicants filed a Notice of Motion for summary determination of the proceeding on 28 November 2008. The application was served late. Orders were made on 19 December 2008 to progress the matter to trial within an urgent time frame. The applicants were required by those orders to file and serve a further amended statement of claim. They did not do so. The applicants did not provide discovery by 30 January 2009. Letters to the applicants' solicitor of 30 January 2009 and 10 February 2009 did not attract a response. The matter was listed before me on 16 February 2009. Delays in prosecution of the proceeding on the part of the applicants were apparent. The applicants were required to deliver an amended application and a further amended statement of claim by 25 February 2009. An amended application and a further amended statement of claim were filed on 10 March 2009. On 12 March 2009, the applicants were ordered to deliver a second further amended statement of claim by 26 March 2009. They did not do so. Calls made to the legal adviser to the applicants were apparently not returned. Other applications were made to secure compliance with orders on the part of the applicants and the matter came before the Court again on 15 April 2009 when the orders previously mentioned were made. Since 15 April 2009, the applicants have failed to advance the matter as described and explained by Mr Mills in his affidavit. It is also important to remember that in this chronology the Court was strongly encouraged by the applicants to isolate dates when the matter might be dealt with as soon as reasonably possible. The principles which govern the question of whether the Court ought to dismiss a proceeding under Order 35A, rule 3(1) are well understood ( Lenijamar Pty Ltd v AGC (Advances) Limited [1990] FCA 520 ; (1990) 27 FCR 388 at 394 to 397 per Wilcox and Gummow JJ, with Pincus J electing, in separate reasons at pp 402 and 403, to put the circumstances influencing the exercise of the discretion on a broader footing; Welsh v Digilin Pty Ltd (2008) FCAFC 149: (2008) 250 ALR 13 at [11] --- [14] per Tamberlin, Greenwood and Collier JJ). The history of non-compliance on the part of an applicant party in a way that indicates an inability or unwillingness to cooperate with the Court or discharge obligations to the Court, provides a basis for dismissing the proceeding. However, there are a number of factors which are influential in refusing the application to dismiss this proceeding and they are these. First, the conduct which has given rise to the difficulty the Court confronts and that of the parties of being presented, by the applicants, with statements of claim which truly obfuscate the claims made against the respondents, is conduct on the part of the legal adviser to the applicants. The applicants, of course, are bound by that conduct in an inter-parties sense and so far as that conduct reflects a failure to discharge obligations to the Court, it is a failure of the applicants. Nevertheless, the source of the difficulty lies with the legal adviser. Secondly, the fundament of the claim sought to be advanced in the proceeding is this. The first applicant is Mr Terry Van Der Velde and Mr David Stimpson. They are the liquidators of a company called Riby Pty Ltd ("Riby"). The winding-up order appointing them was made on 24 April 2006. The liquidators contend that the sole director of Riby, within the relation-back period as that term is understood for the purposes of the Corporations Act 2001 (Cth) ("the Corporations Act "), caused the company to transfer particular land at an undervalue to the director's former wife, the first respondent. The liquidators contend that the transaction falls within Division 2 of Pt 5.7B of the Corporations Act . The liquidator says that relief in respect of that transaction is available at the suit of the liquidator pursuant to s 588FF(1) of the Corporations Act . Other causes of action based upon breaches of duty under the Corporations Act on the part of the director and breaches of fiduciary duty by that director are captured within the pleading. However, the central matter is the challenge by the liquidator to what is contended to be a voidable transaction. It is common ground that by s 588FF(3) of the Corporations Act , the application the liquidator would seek to bring under s 588FF(1) would be unable to be brought if the proceeding is dismissed. In other words, the right to bring the proceeding would be statute barred. Thirdly, counsel for the third respondent, supported by the first respondent, accepts that he is not able to put a proposition to the Court that having regard to the versions of the statement of claim which he has seen, a reader is not able to discern within the matrix of fact and law assembled in the document, a real question to be tried. As to that consideration see Spotwire Pty Ltd v Visa International Service Association Inc. [2003] FCA 762 at [10] ; SmithKline Beecham (Australia) Pty Ltd v Chipman [2002] FCA 674 ; Douglas v Tickner (1994) 49 FCR 507 ; Orchard v Comrie (1998) 80 IR 76 and Global Brand Marketing Inc. v Cube Footwear Pty Ltd [2005] FCA 479). Fourthly, the failure on the part of the applicants to prosecute the proceeding might well be addressed by recognising that Mr Whitten will now draw a pleading; Mr Van Der Velde and Mr Stimpson might be called upon to swear and file an affidavit by which they undertake to prosecute the proceeding expeditiously subject to any advice they might obtain to discontinue the proceeding; and the costs incurred by the second and third respondents in dealing with these applications might be the subject of an order in their favour on a solicitor client basis. Fifthly, the interests of the creditors of the insolvent administration of Reby must be kept in mind. Since the pleading reflects a question to be determined of whether a voidable transaction, for the purposes of the Corporations Act occurred, which might properly give rise to an application for relevant relief and that application would be unable to be brought before the Court should the proceeding be dismissed, it seems to me that the discretion ought to be exercised so as to refuse the dismissal of the proceeding. Other orders which will do justice between the parties can be made and ought therefore to be made. It seems to me that the appropriate course is this. The Notices of Motion ought to be adjourned. The applicants ought to be ordered to pay the costs of the respondents of and incidental to the adjournment of the motions on a solicitor client basis. Those costs ought to be paid forthwith. An order ought to be made that those costs be re-paid by Mr Peter Vincent Mills, the solicitor for the applicants, in his capacity as a Partner of Mills Oakley, the solicitors on the record for the applicants. As to the time frame with which things must be done, the applicants shall be ordered to file in the Court and serve upon the respondents by 4.00pm, 22 June 2009 an affidavit sworn by Mr David Stimpson or alternatively Mr Terry Van Der Velde exhibiting an amended statement of claim in the proceeding described as a Second Further Amended Statement of Claim, settled by counsel. The application will then be listed for review at 9.30am on 29 June 2009. The first and third respondents have urged the Court to make orders which require an amended pleading to be filed by a certain date with the result that upon a failure to file the pleading, a self-executing order would take effect dismissing the proceeding. I am not persuaded that a so-called "guillotine order" is appropriate. If there is a further failure to comply with orders of the Court, the question of dismissal of the proceeding ought to be the subject of judicial discretion. I propose to further order that an affidavit be filed within 14 days sworn by either Mr Van Der Velde or Mr Stimpson by which the liquidator tells the Court that the liquidator will prosecute with all due diligence the proceeding commenced on behalf of the liquidator by Mills Oakley Lawyers, subject to any advice the liquidator may receive, to discontinue the proceeding. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application to strike out a proceeding on the ground of a failure to prosecute the proceeding in the context of a series of orders made by the court consideration of an application for leave to deliver a further amended statement of claim consideration of the limitation period for the purposes of s 588ff(3) of the corporations act 2001 (cth) consideration of an application to strike out a proceeding and an application for leave to deliver an further amended statement of claim corporations practice and procedure |
The Federal Magistrate dismissed an application for judicial review of a decision of the Refugee Review Tribunal of 18 March 2004. The Federal Magistrate did so on the basis that the application for judicial review was incompetent since the Tribunal's decision was a privative clause decision and the time had expired in which any application for judicial review could be made. In my opinion, the Federal Magistrate was correct in reaching that conclusion. It was reached against a background in which there had been earlier litigation, in the Federal Magistrates Court, the Federal Court and the High Court, concerning the Tribunal's decision. 2 In my view, the applicant has no prospects of succeeding in any appeal if time were to be extended and leave given. In those circumstances, the application is refused with costs. I certify that the preceding two (2) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | no point of principle migration |
The retainer was based on a conditional costs agreement ("no win, no fee"). She obtained a verdict of approximately $600,000 in damages, stayed pending any appeal. A condition of the stay was that Mrs McGuiness receive a part payment of $300,000. Keddies received $270,000 of that amount into their trust account, which they disbursed with the authority of Mrs McGuiness. The RTA later appealed to the Court of Appeal and was successful. Mrs McGuiness' estate (Mrs McGuiness having died) was ordered to repay the $300,000 but was unable to do so. These proceedings are brought by the trustee of her estate, Mr Woodgate, for moneys had and received. Mr Woodgate seeks an order that Keddies pay him $243,971.87, the moneys disbursed by Keddies in payment of their fees and third party expenses. 2 It is not in dispute that, at the time that the moneys were paid to Keddies after the verdict in the District Court and before the appeal was filed or determined, Mrs McGuiness was obliged to pay those costs and disbursements and Keddies were entitled to the money. Mrs McGuiness authorised the payment. There is no suggestion that the transaction pursuant to that authorisation is void at the suit of Mr Woodgate or of any creditor. Mr Woodgate submits, however, that Mrs McGuiness' obligation to pay costs and disbursements ended when the District Court judgment was set aside. On this basis, he submits that Keddies are now obliged to make repayment of the moneys disbursed. 3 The RTA is not a party and these proceedings do not concern any claim by it for restitution of moneys paid pursuant to a verdict later set aside. Mrs McGuiness also signed a "Disclosure Document" in respect of the legal services to be provided pursuant that agreement ('the disclosure'). • On 3 December 1999, Goldring DCJ gave judgment in favour of Mrs McGuiness in the sum of $599,752.07 ( McGuiness v Roads and Traffic Authority (Unreported, District Court of New South Wales, 3 December 1999)). His Honour granted a stay of execution of the judgment on the condition that the RTA pay Mrs McGuiness $300,000 in part payment of the verdict moneys. • On 24 December 1999, a cheque for $270,000 was given to Keddies by the RTA. That money was deposited in trust for the benefit of Mrs McGuiness. Thirty-thousand dollars was also paid directly to Medicare by the RTA. • On 6 January 2000, Keddies issued a memorandum of costs and disbursements to Mrs McGuiness. She signed an authority for Keddies to pay those costs and disbursements from the moneys held in trust ('the authority'). • On 7 January 2000, Mrs McGuiness signed a document titled "Acknowledgment" ('the acknowledgment'). Her signature was witnessed by her husband. On the same day, Keddies paid Mrs McGuiness $26,000 in verdict monies and transferred its profit costs ($145,455) to its office account. • Further funds were disbursed from Keddies' trust account over the next few days. On 10 January 2000, $29,194.17 was transferred to the Keddies office account in payment of disbursements it had previously paid and $62,337.78 was drawn to pay third parties, predominantly to counsel. A further payment was made on 11 January 2000 of $2,016.00 to Mr Kiernan for an engineers report. • On 17 January 2000, a notice of appeal was filed by the RTA. • On 31 January 2000, an appearance and notice of cross-appeal were filed. • On 14 June 2001, Mrs McGuiness passed away. • On or about 11 July 2001, a new conditional fee agreement was entered into by Mr McGuiness, as administrator of Mrs McGuiness' estate, and Keddies ('the second conditional costs agreement'). • On 4 November 2002, the appeal was allowed ( Roads and Traffic Authority v McGuiness (2003) Aust Torts Reports 81-688). • On 24 March 2005, Mr Woodgate was appointed trustee of Mrs McGuiness' estate. • On 2 June 2005, a letter of demand was sent from Mr Woodgate to Keddies seeking repayment in the amount of $242,198.79. Medical report and court filing fees are treated differently to profit costs and other disbursements and it is convenient for me to deal with them separately. (2) Are Keddies obliged to repay the medical report and court filing fees? The description is of work referable to first instance proceedings and not referable to an appeal (clause 1). • Clause 2 provided: ' For the purposes of clauses 3 and 4, the successful outcome of the Work undertaken is when we obtain an award or a verdict in your favour or a settlement in your favour '. Clause 3 provided '[w] e will charge you, subject to the successful outcome of the Work' , the professional fees set out in that clause. • A premium was to be charged upon the successful outcome of the work (clause 4). Section 187(3) of the Legal Profession Act 1987 (NSW) ('the Act'), then in force, permitted Keddies, by the costs agreement, to add 25% to their charges and expenses, conditional on the successful outcome of the work. • Expenses which Mrs McGuiness was obliged to pay and moneys paid on her behalf which she had agreed to pay were to be billed separately and as they were incurred. Otherwise, a bill was to be presented after completion of the work (clause 5). • Mrs McGuiness' costs liability under the costs agreement was independent of any order requiring the RTA to pay costs. Mrs McGuiness' liability to pay the RTA's costs was additional to her liability in respect of those costs payable under the costs agreement (clause 9). We will not charge you for the work that we have done on your behalf unless your matter has been successful. By this we mean that an award or a verdict is entered in your favour or we achieve a settlement in your favour. Because we will only charge you on the successful completion of the matter we will charge a premium of 25% of all of our costs and disbursements, the payment of which is conditional upon the successful completion of the work. We will however incur expenses on your behalf which we will ask you to pay for. The schedule described ' our charges ' for the work as including counsel's fees. It then added: ' if you do not have a successful outcome in your matter, we will not charge you ' (emphasis in original). The bill included profit costs and itemised disbursements to experts, counsel's fees, searches and service fees, filing fees, medical reports, photocopying and travelling expenses. At the end of the document there was a note that interest may be charged on unpaid costs after 30 days and an authority for her to sign. The authority read: '[p] lease sign in the space below, to authorise payment of our costs and disbursements from [moneys] held on [or to be received into] trust '. That endorsement was signed by Mrs McGuiness and dated 6 January 2000. The $270,000 received from the RTA was paid into Keddies' trust account and disbursed as directed from that account. Keddies' trust account ledger simply shows that its profit costs were transferred to the office account on 7 January 2000. The acknowledgment made no provision for any undertaking or commitment from Keddies to repay the amounts being disbursed from the interim payment from the RTA. The parties agree that the question for the Court is the proper construction of the costs agreement. A broad appreciation of the terms one might expect of a "no win, no fee" agreement is not relevant. Similarly, while the solicitor and client relationship between Keddies and Mrs McGuiness might be said to sit uneasily with certain aspects of this case, no impropriety is suggested. 14 There is also no dispute that a 25% uplift was charged by Keddies on their profit costs but not on any disbursements. Of those disbursements, one barrister had agreed to a fee conditional on the outcome. 15 The parties agree that a recipient of moneys under a judgment is entitled to receive moneys and retain them while the judgment is in force and not stayed. The successful appellant, here the RTA, is entitled in principle to recover from Mrs McGuiness all moneys paid under a judgment that has been set aside ( TCN Channel Nine Pty Ltd v Antoniadis (No 2) [1999] NSWCA 104 ; (1999) 48 NSWLR 381 at [4] ). 16 Payment was authorised by Mrs McGuiness in accordance with the costs agreement. Mr Woodgate accepts that, at the time of payment to Keddies, Mrs McGuiness was contractually bound to pay the costs and disbursements. Keddies were obliged to make the payments to the third parties. The RTA could not have obtained a refund from Keddies after it succeeded on appeal whether the costs agreement was conditional or unconditional. 17 Mr Woodgate contends, however, that Mrs McGuiness' obligations were avoided after the successful appeal by the RTA. He emphasises that, had there been a verdict for the RTA in the District Court, Mrs McGuiness would not have been liable to pay either the costs or disbursements and that Mrs McGuiness had no contractual relationship with third parties and no obligation to pay them. That obligation, it is said, was held by Keddies. A 25% premium was payable conditional upon the ' successful outcome of the Work ' (clause 4). The disclosure provided that there would be no charge unless the matter has been successful, that is, resulted in an award or verdict in Mrs McGuiness' favour. Mr Woodgate's position is straightforward. He submits that there has been no successful outcome; the proceedings have resulted in a verdict for the RTA and not for Mrs McGuiness; Keddies are not entitled to have been paid. Mr Woodgate further contends that, as all of the documents were drafted by Keddies, any ambiguity should be construed against them. 19 The entitlement of Keddies to their costs depends upon the meaning to be given to "successful outcome" and "verdict" as used in the costs agreement. Mr Woodgate says that there is no verdict where the appeal was successful and that a "verdict" in the costs agreement should be construed as a verdict that withstands appeal. Further, he submits, once the District Court verdict was set aside, there was no "successful outcome". 20 Mr Woodgate also relies on the fact that Keddies received the 25% uplift, which was payable under the Act only when fees are subject to a contingency (s 187). He submits that it would be improper now to construe the costs agreement as, in effect, an ordinary, unconditional costs agreement in circumstances where the contingency uplift was charged. 21 These submissions, however, mischaracterise what occurred. The costs agreement was conditional. It was conditional on the outcome in the District Court. The costs agreement was required by the Act to set out the circumstances which constituted a "successful outcome" (s 186(4)). It did so in clause 2, where it relevantly stated ' the successful outcome of the Work undertaken is when we obtain...a verdict in your favour '. There is no reference to "appeal" or "final" in clause 2. "The Work" by reference to which the "successful outcome" relates, is described in detail in clause 1. It is clear from that description that "the Work" covered by the costs agreement was trial work and not work for an appeal. In context, the "verdict" which constituted a "successful outcome" was a verdict in the proceedings to which "the Work" related: the District Court proceedings. 22 Keddies characterises Mr Woodgate's contentions as to the costs agreement as a submission that a term should be implied into the costs agreement that the moneys would be refunded if the verdict were set aside on appeal. Mr Woodgate rejected the assertion that his case relies on any implied term and the Court did not have the benefit of substantive submissions on this point. While an implied term requiring moneys to be repaid if a verdict were set aside is capable of clear expression and would arguably be reasonable and equitable in circumstances where a verdict in the District Court might later be overturned, it has not been established by Mr Woodgate that the remaining criteria for an implied term are satisfied ( Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24 ; (1982) 149 CLR 337 at 347). As a general rule, the subsequent conduct of parties to a contract is not relevant to the construction of its terms (Carter JW and Harland DJ, Contract Law in Australia (4 th ed, Butterworths, 2002) at [712]; Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 at 114---116; Cox v Goldcrest Developments (NSW) Pty Ltd [2000] NSWSC 763 ; (2000) 50 NSWLR 76 at [12] ). Evidence of such conduct may, however, establish that the parties varied the terms of the contract by reaching further agreement ( Winstonu Pty Ltd v Pitson [2001] FCA 541 at [24] per Stone J, with whom Beaumont and Gyles JJ agreed). It may also assist in identifying the subject matter with which the contract deals ( Sportsvision at 114; Independent Timber Importers (Aust) Pty Ltd v Mercantile Mutual Insurance (Australia) Ltd (2002) 12 ANZ Ins Cases 61-543 at [17]). They concede that, to effect a variation, there must have been a subsequent contract and accept that the acknowledgment is not itself a contract. Keddies submit, however, that a ' variation by conduct ' is established on the basis of the matters of fact recorded in the acknowledgement. 25 Keddies further point to s 61 of the Act and the obligation to pay trust moneys in accordance with their client's direction, as constituted by the authority. They also submit that the authority gave rise to an estoppel which would preclude the late Mrs McGuiness and her trustee in bankruptcy from seeking to recover the moneys paid. Mr Woodgate submits that a variation can only occur if the acknowledgment is itself a contract or agreement for which there is consideration; he says that here there is no promise and no consideration. Mr Woodgate stresses that the acknowledgment was not contractual in nature and was entirely for the benefit of Keddies. He points out that a variation to the costs agreement cannot be implied and must be in writing (s 184(4) of the Act). 26 Mr Woodgate submits that, if the acknowledgment were executed after payment or at least after payment was authorised by the authority, it cannot be relied on by Keddies and does not affect, in any way, what occurred the day before. He further submits that it was simply an acknowledgment that the costs agreement had been acted upon. 27 In my view, neither the acknowledgment nor the authority, taken alone or in conjunction with "the events of 6 and 7 January" constitute a variation of the costs agreement. Keddies has not established that there was a further contract between Mrs McGuiness and Keddies to vary the costs agreement. The acknowledgment and the authority are, however, each consistent with my finding that the subject matter of the costs agreement was the District Court proceedings. This was in the context that Mrs McGuiness had already authorised payment to Keddies. It was also the case that she had died. There was no evidence that the second costs agreement was executed because of Mrs McGuiness' death. She had acknowledged that Keddies had been paid pursuant to the costs agreement and that it was possible that the RTA would appeal, in which case Mrs McGuiness would have to repay the verdict moneys received, which would include the moneys paid to Keddies, and pay the costs of the appeal. If the "verdict" or "outcome" in clause 2 of the costs agreement did refer to a verdict that withstood an appeal, in my view that agreement was varied upon the execution of the further conditional costs agreement to apply only to the stage of the District Court verdict, whether set aside on appeal or not. No need arises to consider the subsequent conduct of the parties in reaching that conclusion. In any event, such conduct is consistent with the subject matter of the costs agreement, being the work done for the District Court proceedings, the outcome of those proceedings and the verdict in the District Court. It was avoided ab initio . Even if Keddies were entitled to payment after the verdict in the District Court, he maintains that they lost that entitlement after the appeal and must refund all of the money. The verdict was, he says, a condition precedent to Keddies' entitlement to payment which "disappeared" when the Court of Appeal handed down its decision. 31 Reversal on appeal generally annuls a judgment ab initio . However, a person may act under the authority of a judgment until reversed and such action is not avoided or invalid or unlawful ( Antoniadis ; Commissioner for Railways (NSW) v Cavanough [1935] HCA 45 ; (1935) 53 CLR 220 at 227; Wilde v Australian Trade Equipment Co Pty Ltd [1981] HCA 13 ; (1981) 145 CLR 590 at 603). Whether ' what has been done can be undone will depend upon the availability of appropriate remedies, to bring about the appropriate relief' ( Wilde at 603). A change of position, made in good faith, is available as a defence against a claim for restitution ( Lipkin Gorman v Karpnale Ltd [1988] UKHL 12 ; [1991] 2 AC 548). 32 If the moneys were paid out by Mrs McGuiness under the mistaken belief that she was under a legal obligation to pay them or that Keddies were legally entitled to payment, those moneys might be recoverable by her or her estate. However, there is no evidence of a mistake of fact or law on the part of Mrs McGuiness. There is evidence, in the acknowledgement, that Keddies were not paid out under a mistaken belief that there would be no appeal. 33 Even if there were a mistake, if Keddies had adversely changed their position in reliance on the payment and honestly believed that they were entitled to receive and retain the moneys, they submit they have a defence to the claim ( David Securities Pty Limited v Commonwealth Bank of Australia [1992] HCA 48 ; (1992) 175 CLR 353). In the present case, it is not suggested that Keddies had other than an honest belief in their entitlement to payment. Keddies submit that, following David Securities , restitution at the hands of Mrs McGuiness, or her trustee, is unavailable. (2) That change in position was in reliance on the authority. (3) They acted in reliance on the authority and acted to their detriment in satisfying third party expenses without a right of recovery. They also acted in reliance on the authority in disbursing their own profit costs. (4) It would be inequitable in all the circumstances to require restitution. Those circumstances include the absence of any demand or assertion of obligation to repay by Mrs McGuiness or the estate prior to the demand by the trustee and the absence of any allegation of want of good faith on the part of Keddies. The recipient has a defence if he or she can show that an order for restitution is unjust. One example is a change of position by acting to the recipient's detriment on the faith of the receipt of the moneys (at 385). 36 Mr Woodgate submits that this is not a "mistake of fact or law" case. He says it is a simple case of moneys had and received because the condition precedent under the contract did not exist once the verdict was set aside. This ignores the fact that a person may, as noted, act under the authority of a judgment until reversed. By the time the appeal was lodged, let alone determined, the moneys held in trust had been disbursed by Keddies pursuant to the authority (cf Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516). 37 In my view, Mrs McGuiness was not labouring under a mistake when she authorised the payment to Keddies. She acknowledged that there may be an appeal and that she may be unsuccessful and may be required to repay the moneys (cf Hookway v Racing Victoria Limited [2005] VSCA 310 at [45] ). Her payment was a voluntary payment. The consequence of that payment was that the costs agreement was brought to an end. The condition precedent under the contract did exist at that time. There is no direct evidence of her belief at the relevant time and the onus is on her trustee to establish the nature of her intent if he wishes to claim restitution. The mere fact that Keddies required payment to be made does not, of itself, warrant the drawing of the required inference ( David Securities at 368). Accordingly, category (1) does not apply. In light of the acknowledgment by Mrs McGuiness that an appeal was possible and that she might be ordered to repay the monies, absent further evidence, category (2) or (3) applies. For the reasons discussed in David Securities and as discussed by Mason and Carter at [415], the payment was voluntary and Mr Woodgate can not recover the moneys on behalf of the estate. ARE KEDDIES OBLIGED TO REPAY THE MEDICAL REPORT FEES AND FILING FEES? Those expenses were set out in clause 3(i) and (ii), the letter "(b)" having been omitted due to an apparent typographical error, and were medical report fees and court filing fees. • apart from the expenses in 3(b), ' all other charges and expenses which are payable only on the successful outcome of the Work will be given to you after completion of the Work '. It is fair to say, however, that this is not the mainstay of his submissions. 42 Clause 3 of the costs agreement distinguishes charges and expenses incurred ' which we will ask you to pay '. I am satisfied that the provision for expenses incurred on Mrs McGuiness' behalf was, in effect, a separate clause or sub-clause to the provision for costs in clause 3(a) and was not intended to be subject to a "successful outcome". The conditional aspects of the costs agreement did not apply to the disbursements referred to in clause 3 (i) and (ii), which included medical report fees and court filing fees. Mrs McGuiness was obliged by clause 5 to pay those in any event. 43 That result accords with the disclosure. The disclosure provided that Mrs McGuiness was obliged to make payment for incurred ' expenses on your behalf which we will ask you to pay for '. Those expenses were again listed as medical report fees and filing fees (clause 2(a) and (b)). That obligation was not subject to any contingency. There was an acknowledgment that Mrs McGuiness was obliged to pay them. 44 It follows that Keddies are not obliged to repay moneys disbursed by way of medical report and court filing fees. That "successful outcome" was a verdict in her favour in the District Court. It is true that the District Court verdict was later overturned. However, Mrs McGuiness discharged her liability under the contract voluntarily before any appeal had been filed. Once the moneys were paid voluntarily in circumstances where Keddies were entitled to receive them, the contract between Keddies and Mrs McGuiness was discharged and brought to an end. There was no express or implied term that Keddies were obliged to repay any moneys paid to them under the contract. There was no unjust enrichment where the work had been done and the costs incurred. In the absence of evidence of any mistaken belief on the part of Mrs McGuiness, no question of payment under a mistake of fact or law arises. To the contrary, the acknowledgment stated that Mrs McGuiness was aware of the appeal and the possible obligation to repay to the RTA the moneys received from it. 46 Keddies were entitled to receive the moneys at the time that they received and disbursed them. They acted on the faith of that payment to them and the authority and acknowledgment signed by Mrs McGuiness and distributed the moneys. The moneys were disbursed by Keddies pursuant to the authority before an appeal had been filed. 47 Even if that money was paid by Mrs McGuiness under a misapprehension as to her obligation to pay at that time or under the mistaken belief that the moneys would be returned if an appeal were successful and even though the verdict was set aside, Keddies are not obliged to refund the moneys to Mrs McGuiness' estate. They paid out the moneys in accordance with their client's direction and, accordingly, changed their position ( David Securities at 385). 48 Medical report and court filing fees were not subject to any contingency. Mrs McGuiness was liable to pay those costs in any event. 49 Mr Woodgate has not established any legal basis for the estate's entitlement to repayment. The application should be dismissed with costs. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | conditional fee agreement for legal services client's liability to pay costs and disbursements contingent on a "successful outcome" work referable to trial and not to appeal "successful outcome" in the contract was a verdict in district court proceedings client gave authority to pay costs and disbursements from damages awarded by district court client acknowledged that verdict could later be overturned and she might be liable to repay damages verdict overturned on appeal applicant seeks repayment of costs and disbursements from solicitors moneys had and received moneys disbursed pursuant to the authority prior to the appeal being filed contract brought to an end by payment of costs and disbursements relevance of subsequent conduct no restitution as no mistake of fact or law established payment voluntary defence to claim for restitution no unjust enrichment solicitors changed their position and gave consideration for payment application dismissed contract |
For that purpose the applicant filled out and signed a departmental form headed 'Application for business skills migration to Australia' denoted Form 47 BU, on the third page whereof she stated as her 'Address for correspondence' to be 'RM 703, No. 9, Nan-King E. RD., SEC. 3, Taipei City, Taiwan R.O.C'. 2 Commencing from September 1986, the applicant occupied the office of President of Wan Lun Construction Co Ltd, a Taiwan corporation said to be engaged in 'Domestic & Foreign Civil Engineering And Construction Projects'. By 2001, the applicant was married and she and her husband had two adult children aged approximately 27 years and 23 years respectively. 3 A departmental form which the applicant signed contemporaneously with and which apparently accompanied that application form was a Form 956, dated 15 October 2001, headed 'Authorisation of person to act and receive communication'. Under the heading 'Authorisation by applicant/sponsor', the applicant signified by that form that Fu-Hua (Flora) Tang would '... act on my behalf in relation to my application/sponsorship in dealings with the Department...'. This includes 'authorising DIMA to send that person any communication, documents or notifications relating to my application/sponsorship that would otherwise have been sent to me'. The so-called authorised address of Ms Tang was stated on that Form 956 to be 'RM 703, NO 9, Nan-King E. RD., SEC. 3, Taipei City, Taiwan R.O.C', as in the case of Form 47BU. Under the form sub-heading 'Consent by authorised person', Ms Tang answered in the negative the question '... do you agree to DIMA communicating with you by facsimile, e-mail or other electronic means? Further, for 3 years after my first entry into Australia, I will notify DIMA of any subsequent changes in my residential address, within 28 days after I change my address, including any residential address I may have outside Australia. Rd., Taiwan', that being Ms Tang's said 'authorised address', the applicant was informed of the approval of her application by Australian Visa Services. 5 Subsequently on 21 May 2002, the applicant departed from Australia for Taipei and remained out of Australia for approximately 22 months, and on 31 March 2004, the applicant returned to Australia. On 10 May 2004, she departed again from Australia for Taipei, and remained there on that occasion for about 12 months. On 3 July 2004, there was sent by the Department to the applicant a communication addressed to her at No. 9 Rodd Road Five Dock, enclosing a Departmental Form 1010 headed 'Survey of business migrants, migrant class and resident class 24 and 36 months'. The source of the Department's knowledge of that apparent address by that time is unclear from the Court Book, which was not wholly assembled in chronological sequence. There is later reference in some documentation in the Court Book to that address in Australia, but it is an address to which neither party appeared to assign any significance. That Form 1010, as apparently filled out and signed by the applicant on 7 July 2004 and subsequently forwarded by her to the Minister, disclosed her 'Residential address in Australia' as '3 Allenby Crescent Strathfield NSW 2135'. In filling out that latter form, the applicant indicated her agreement to the Department communicating with her by fax and email, and she disclosed thereby those respective particulars as well. Underneath her signature placed on her covering letter returning Form 1010 to the Minister, there appeared her full name and her office as 'President' of 'Saint Island (Australia) Pty Ltd', 9 Rodd Street Five Dock, which was of course different to her said residential address in Strathfield disclosed in the Form 1010 thereby enclosed. The applicant placed a signifying cross in the box located against the printed words of the form, 'All written communications about Business Skills monitoring should be sent to "Myself"'. In so far as that Form 1010 referred '... to the address for communications that you have provided in this form', the only address appearing therein, as so completed by the applicant, was the said residential address '3 Allenby Crescent Strathfield NSW 2135', though the applicant's letter returning Form 1010 to the Department, signed and completed as I have just indicated, bore a different address (inferentially a business address). There was left blank the space provided for nominating an 'Authorised recipient'. By that time more than two years had elapsed from the time of the approval of the applicant's original visa application. 6 By affidavit evidence of the applicant tendered to the Court (sworn 28 September 2006), the applicant asserted that 'I did not personally insert the details onto the said form', referring thereby to Form 1010, and that '[t]he details were typed and written on the form by Fu-ha-Tang... she asked me questions and used information provided by me to complete the form... she asked me to sign it. I then signed the form'. Counsel for the Minister objected to the admissibility of the evidence and I indicated that I would give my ruling in my reserved reasons for judgment. On further consideration, I think that the evidence is of no utility or relevance so far as it goes, and for what it may matter, ought to be rejected. 7 On 9 April 2005 the applicant returned to Australia. On 13 April 2005, the Department sent by post to the applicant a comprehensive communication addressed to her at 3 Allenby Crescent Strathfield NSW 2135, that being as I have above stated the residential address provided by the applicant in her Form 1010, subsequently of course to her having provided her original application Form 47BU in 2001. That communication contained notice of Departmental intention to cancel her business skills visa. That notice referred to the statutory requirement that as a business skills visa holder, she was obliged under s 134(1) of the Migration Act 1958 (Cth) ('the Act') to obtain a substantial ownership interest in an eligible business, and to become involved in the day-to-day management of that business at a senior level by way of active utilisation of her skills. The notice explained that whilst a business skills visa may be cancelled under s 134(1) by reason of non-fulfilment of those conditions, it must not be cancelled if in accordance with s 134(2) , the visa holder is considered in effect to have made genuine efforts to obtain ownership interest in an eligible business in Australia, made a genuine effort to engage in business, and to have observed and complied otherwise with the visa requirements. The notice further explained that the Department was not currently satisfied that the applicant was observing and complying with her visa requirements, and that in order to avoid cancellation, the applicant was required to satisfy the Department that she had made, or was likely to continue to make in the future, a genuine effort to utilise her skills in participating actively at a senior level in the day-to-day management of an eligible business in Australia, or that she intended to continue to hold a substantial interest in any eligible business and to utilise her skills in actively participating at a senior level in the day-to-day management of such business operations. 8 On 5 May 2005 the applicant completed Departmental Form 956 styled 'Appointment of a migration agent or exempted agent', being a form which presumably superseded in Departmental use that Form 956 which she had signed earlier on 15 October 2001. That form was received by the Department's Perth Office from the applicant on 20 May 2005. By that form the applicant appointed Mr William Luong of Sydney as her migration agent in Australia. Not insignificantly in my opinion, that form disclosed as her 'Current Residential address' No. 3 Allenby Crescent Strathfield NSW 2135, that being of course the address earlier disclosed as her residential address in Australia in her completed Departmental Form 1010 of 7 July 2004. It also disclosed the names of three other persons having the surname Lee, the implicit predication thereof being that their wife/mother's said address was also theirs. Why the same was sent to or in any event received in the Department's Perth Office, rather than its Sydney Office, does not seemingly appear in the evidence. By letter of 13 May 2005, Mr Pun, the Chairman of Chinese Australian Union Inc, made submissions on the applicant's behalf addressed to the Department's Sydney office, as did Mr Luong of Streamline Migration Services, by letter dated 17 May 2005, who is a migration agent. In at least the latter case, the letter was sent in purported response to the Department's said notice of intention to cancel of 13 April 2005. 9 Subsequently on 21 June 2005, being more than two months of course after the Departmental notification of intention of 13 April 2005, the Minister's delegate, by letter sent to the applicant's said migration agent Mr Luong at his address, Suite 1603, Level 16, 87-89 Liverpool Street Sydney, cancelled the applicant's subject business skills visa on the grounds that she had not obtained a substantial interest in an eligible business in Australia, and further that she was not utilising those skills by participating at a senior level in the day-to-day management of any such eligible business, and yet further that she did not intend to hold a substantial interest in a business in Australia. In that context, the delegate drew attention to the circumstances that the applicant had been in Australia for less than four months during the preceding years during which the visa had been in operation, but had not purchased any real estate or fixed assets in Australia at least during those years, nor had the applicant provided evidence to the Department that the turnover of her nominated corporate business vehicle (the abovementioned Saint Island (Australia) Pty Ltd) had met any of the guidelines for genuine effort in relation to establishment of any business in Australia, nor had she satisfied any of the guidelines otherwise for the demonstration of genuine effort in those respects. At the time of the cancellation of the applicant's visa, the Minister's delegate cancelled also the secondary visas of her husband Mr Lee, and those of their two adult children. While I am sympathetic to the circumstances of the visa holder, I note that these events occurred before the actual grant of the business skills visa. Therefore, I do not consider that she is committed to engaging in business activity in Australia or has a serious willingness to comply with the conditions attached to her business skills visa. The same would have been doubtless as distressing as they were dramatic to the applicant and her family, but are of course matters entirely for the Minister's discretion and not for this Court to address and take into consideration to address in these reasons. 11 The initial response of the applicant to the visa cancellation was the lodgment of an application, made on 15 July 2005, for review of that decision of the Minister's delegate by the Administrative Appeals Tribunal ('the Tribunal'). That application was lodged by the applicant's Sydney solicitors, Brett Slater Solicitors, who have since continued to represent the applicant in the context of her communications and disputes with the Minister, as well as the subject proceedings. At the time of lodging the application, the applicant's solicitors raised the issue on her behalf of whether the notice of intended cancellation had been effectively given to the applicant in accordance with the procedural requirements of ss 134 and 135 of the Act, and the Tribunal convened a preliminary hearing to address that issue. The relevant provisions of ss 134 and 135 are later reproduced in these reasons. That issue was resolved on 9 March 2006 in favour of the Minister by Professor G D Walker, Deputy President of the Tribunal, pursuant to reasons for decision which he provided. It was found by the Deputy President that the notice of intention to cancel the applicant's business skills visa was validly given in accordance with ss 134(9) and 135 of the Act, that notice having conformed in his view to the legislative requirements by '... forwarding it to her last known address as provided by [Ms Lo] on her 24 month business survey in compliance with s 494B of the Act', referring thereby to the abovementioned Form 1010 signed by the applicant on 7 July 2004, and which disclosed her residential address in Australia of No. 3 Allenby Crescent Strathfield NSW 2135 (s 494B is later reproduced in these reasons). 12 In his reasons for interlocutory decision, Professor Walker set out the history of communications to which I have referred, and addressed certain submissions made to the Tribunal on behalf of the applicant which were not at least precisely in line with the submissions made on her behalf to this Court in the present proceedings. More importantly, there is evidence pointing to the applicant's intention when she completed the Form 1010. On 5 May 2005, ten months after completing the Form 1010, the applicant signed a second Form 956, this time appointing Streamline Migration Services in Sydney as her migration agent. Question 3 on that form... invited the applicant to tick one of three boxes. She was asked to indicate whether she had "appointed a migration agent or exempted agent", or "changed your migration agent or exempted agent", or "ended the appointment of your migration agent or exempted agent". She ticked "appointed a migration agent", not "changed your migration agent", thereby indicating her belief that she did not at the time have a migration agent authorised to receive communications on her behalf. That rather undermines her contention at the hearing that, while she did not use Ms Tang's services in preparing the Form 1010, she still viewed her as her agent for other migration purposes. In my view the Form 1010, when construed as a whole and in light of the surrounding circumstances, indicated an intention to receive departmental communications personally and not through Ms Tang in Taipei. I therefore conclude that the notice of intention to cancel the visa dated 13 April 2005... is valid. 3 Allenby Crescent Strathfield NSW 2135. The address on the second of those two forms was also in line with her completed Form 1010 of 7 July 2004. Professor Walker's reasoning reflected in my opinion at least a formidable response to the applicant's purported reliance upon the nomination of the different address of Ms Tang appearing in the abovementioned Forms 47BU and 956, each bearing the earlier date of 15 October 2001. The issue arising is whether nevertheless, that address in Taiwan of Ms Tang so disclosed in those earlier Forms 47BU and 956 should relevantly prevail, as the applicant would submit. The [Tribunal] erred in finding that a jurisdictional fact exists. This was a jurisdictional fact. The [Tribunal] erred in taking into account irrelevant considerations. It also relied on the creation of a document which did not come into existence until after the purported "giving". Those methods consist of 'Giving by hand' , 'Handing to a person at last residential or business address', 'Dispatch by prepaid post or by other prepaid means' and 'Transmission by fax, email or other electronic means' . Section 494C stipulates as to 'When a person is taken to have received a document from the Minister' by any of the methods for which provision is made. No issue arises as to satisfaction of s 494B by reason of the dispatch by the Department on behalf of the Minster of the subject controversial notification by prepaid post. However, this does not prevent the Minister giving the first person a copy of the document. A declaration under s 16 of the Federal Magistrates Court [Act] that the Notice of Intention to Cancel the visa of the applicant was not validly served. An order of mandamus under s 476 of Migration Act to compel the second respondent to decide the matter on the basis that there was no valid Notice of Intention to Cancel. An injunction under s 476 of the Migration Act to prevent the second respondent further hearing the application pending the resolution of this appeal. An injunction under s 476 of the Migration Act to prevent the first respondent from treating the business visa of the applicant as if it were cancelled, pending the resolution of this appeal. The respondents pay the costs of the applicant. 20 On 27 September 2006, Scarlett FM ordered that the application filed by the applicant in the Federal Magistrates Court be transferred to the Federal Court, and that the costs of the hearing on 27 September 2006 before his Honour be costs in the proceedings. Prior to so doing, there had been filed in that Court by the applicant on 13 September 2006 a written outline of submissions, and on 15 September 2006, the respondent Minister had responded thereto by a written outline of submissions. Subsequently in this Court, each of the parties filed in Court three successive sets of written submissions. An initial issue immediately arising is that the subsection does not explicitly so provide, and that accordingly the applicant needs the support of implications arising from the operation of the Act according to its true construction. In any event, it was said by the applicant to follow from the said proposition that a finding of fact necessary to found jurisdiction by reason of the service of notice of intention to cancel may be reviewed by appropriate curial process. Used here, it identifies a criterion, satisfaction of which mandates a particular outcome... The determination of the question whether Collex proposed a "non-complying" development , which turned upon the application of the criterion of "special industry", was a condition upon the existence of which there operated the obligation that the Commission not grant consent... the answer depended, not upon the combined operation of fact and law, but upon the opinion on the matter of the Commission; an opinion based on the evidentiary material before the Commission. The sole issue arising on the present application is whether the requisite s 135 notice has been thus ' given' . Thus the question that arises is whether the statutory notion of ' given ' is satisfied in the present somewhat complex context in which the notice of intention was provided to the applicant by sending the same to her at the address specified in the applicant's Form 1010, namely '3 Allenby Crescent Strathfield NSW 2135', and repeatedly so specified in the applicant's Form 956, signed on the 5 May 2005, instead of to Ms Tang at her address 'RM 703, NO. 9, Nan-King E. Ed, RD., SEC. 3 , Tapei City, Taiwan R.O.C. ' as originally stated in the applicant's Form 47BU and the initial Form 956. 23 Moreover the applicant contributed further to the confusion, perhaps understandably as well as implicitly created within the Department, by the following virtually contemporaneous documentation provided by or on behalf of the applicant to the Department, being Agreement of Appointment bearing date 1 August 2004 made between Saint Island (Australia) Pty Ltd and Chuan Sheng Enterprise Ltd Co., the address of the former having been again disclosed as '9 Rodd Rd, [Fivedock] NSW 2046, Australia', as was the case of the departmental form 'Client Summary-Off Shore' apparently or perhaps furnished simultaneously if the structure of the Court Book be any guide. 9 Nan-King E. Rd., SEC. 3 , Taipei City, Taiwan, R.O.C. 'as the person authorised to receive any communications'; the notice of cancellation was therefore said not to have been validly given at all, s 494D being submitted to require that such notice be served upon the ' authorised recipient ', (that being the subsection 494D(1) expression), and thus not the person who had given to the Minister a 'written notice' within the purview of subsection (1) of s 494D ; no notice was said to have been therefore ' given ' to the applicant as the ' holder ' of the subject ' business visa ' for the purposes of ss 134(9) and 135 (1); in other words since the authority to Ms Tang to act as the applicant's authorised recipient had not been withdrawn by the applicant at the time when the notice was purportedly served, there could not have been any valid service of the notice. Reference was made for comparison to Saleem v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 234 (Allsop J), which involved the exercise of the power given by s 109 of the Act to cancel a visa by reason of ' non-compliance by the holder of [the] visa ' with the obligation pursuant to s 101 of the Act to '... fill in his or her application form in such a way that: (a) all answers on it are answered; and (b) no incorrect answers are given' , and where the Minister had decided that '... there was non-compliance by the visa holder in the way described in the notice' within s 108 of the Act. 26 Reference was thereupon made by the applicant to the provisions of s 494D ( infra ) relating to the appointment of an authorised recipient. By reason of the legislative scheme, the applicant submitted that it was Ms Tang who was the authorised recipient and who was the person to whom the notice of intention to cancel her visa was required to be given, and further that the notice was required to be given to her at 'RM 703, No. 9, Nan-King E. Rd. SEC. 3 Taipei City Taiwan R.O.C', being of course the original address appearing on the initial Form 956 dated 15 October 2001, but at no stage had appropriate notice of intention to cancel been given to her by the Minister at that address. It was further asserted by the applicant in that context that Ms Tang 'was authorised under the 2001 notice to receive on behalf of the applicant any documents or notifications relating to the business visa application made in October 2001'. It was emphasised in that regard that '[i]f a visa holder has notified the Minister that... all documents [are] to be given to an authorised recipient... then the authorised recipient is the person who must be given them', and that 'actual service on the visa holder, without service on the authorised recipient, is not effective service because of the operation of s 494D '. 27 The applicant contended that '... the critical question is whether as at 13 April 2005 (being the date of the Department's notice of intention to cancel her visa), [Ms Lo had] withdrawn the authority to Ms Tang', being withdrawn in the sense that Ms Tang was no longer the applicant's authorised recipient. The Tribunal was said to have relied upon what the applicant wrote on her Departmental Form 1010 sent to the Department in July 2004, which it will be recalled made reference to the address No. 3 Allenby Crescent Strathfield NSW 2135. The applicant pointed out, in any event, that what was written on the Form 1010 signed by her on 7 July 2004 was improperly obtained by the Minister's Department, and 'should not be relied upon as evidence of the applicant's intentions', because that Form 1010 was sent to her at Number 9 Rodd Road Five Dock NSW, yet at that time the applicant was in Taiwan, and that therefore the form should have been sent to Ms Tang as the applicant's authorised recipient. I should interpolate to further mention in that context that on 19 July 2004, what appears to have been the Australian company Saint Island (Australia) Pty Ltd was caused to be incorporated by the applicant and Hui-Sheng Lee, each having the address in the State of New South Wales of Australia of No. 3 Allenby Crescent Strathfield, NSW, as recorded by the Australian Securities and Investments Commission. It was thus the case of the applicant that the service of that Form 1010 'plainly did not comply with the requirements of s 494D(1) ', and that therefore the Minister 'should not be permitted to rely upon information it obtained from the applicant in a manner not permitted by the statute to support the legality of actions subsequently taken by it against the applicant'. Moreover the situation was said by the applicant to be 'analogous to the [Minister] being permitted to take advantage of material obtained by it in breach of the requirements of procedural fairness'. 28 The applicant's second argument was that the Tribunal reached the wrong conclusion when it found that by submitting Form 1010 to the Department, the applicant's intention was to advise the Minister that she wished to receive departmental communications personally and not through Ms Tang in Taipei. In that regard, relevance was attributed by counsel for the applicant to her affidavit evidence that ' I completed the Form 1010 in which I nominated my residential address as 3 Allenby Crescent Strathfield', but that 'I did not intend to make this my address for service of documents by the department [and] I did not intend to revoke the authority of Fu-Ha Tang, my migration agent in Taiwan, to receive documents on my behalf'. Evidence of her uncommunicated subjective intention in that regard, without more, would at least normally have no statutory significance, in the absence of formal communication to the Department of any such intention. What at least primarily fell for attention in the proceedings was the documentary evidence communicated objectively by or on behalf of the applicant to the Department. 29 The applicant next asserted that '[a]s the heading of Form 1010 suggests', that Departmental document is in the nature of 'a survey form', and further that '[t]he obvious focus of anyone filling out this form is to provide the survey information requested'. However, one component of the information sought by the Department from the applicant, as she acknowledged implicitly by her letter of 5 August 2004 duly signed by her as President of Saint Island (Australia) Pty Ltd of No. 9 Rodd Road Fivedock NSW 2046, was the question numbered 71 requesting information regarding the person to whom '[a]ll written communications about Business Skills monitoring should be sent...'. In that regard she marked with a cross, of course as signatory to that Form as so completed, the box denoted 'Myself'. No other address having been denoted on that Form 1010 other than '3 Allenby Crescent Strathfield 2135 NSW', and moreover there having been left blank by her the box denoted 'Authorised recipient', such Form 1010 as signed and returned by the applicant to the Department in my opinion could reasonably have been used by the Department as the applicant's address for further communications. At question three of Form 1010, which reads '[d]o you agree to DIMIA communicating with you by facsimile, e-mail, or other electronic means', the applicant marked with a cross the box denoted 'Yes', and provided thereby an email and facsimile number. The fact that neither number provided was connected to the residential address given in question four is not material, since communication by facsimile or email was not specified by Form 1010 to be the only means of further or future communication. 30 The applicant next sought to render as of no significance relevantly the content of the subsequent Form 956 signed by the applicant ( inter alia ) on 5 May 2005, by reasons of the same having been thus provided by the applicant to the Department after the Minister gave to the applicant notice of intention to cancel by its abovementioned letter of 13 April 2005 (see [7] above). The applicant described as 'misconceived' the Tribunal's supposed finding that the applicant's conduct of nominating a migration agent 10 months after filling out Form 1010 'as being probative of her intent at the time she filled out the Form 1010'. The applicant further asserted that the 'form was patently filled in by the new migration agent and simply signed by the applicant', and that it was 'unlikely that the applicant's mind was...focused on whether the appointment of the new agent was properly described ...in Form 956'. What I have already indicated in [28] above as to the applicant's uncommunicated state of mind bears repetition. 31 The applicant submitted next that what was asserted to be the Minister's failure to comply with the procedure stipulated by s 494D of the Act as to the so-called 'actual service' requirements relating to the relevant written communications cannot 'be displaced by proof of actual service on the applicant'. It may be thought to be somewhat of an enigmatic contention, given that bringing directly to the attention of the applicant herself notice of a critically material matter could hardly be described in any normal or usual context as less effective than bringing that same factor to the attention of a purported authorised recipient. In any event, in support of the contention that s 494D 'is not merely a deeming provision' but rather describes what 'actual service requires', the applicant pointed to the use of the word 'otherwise' appearing in the text below the title 'Authorisation by applicant/sponsor' in Form 956, which reads '[t]his includes authorising DIMIA to send that person any communication documents or notifications relating to my application/sponsorship that would otherwise have been sent to me'. The applicant also pointed to the use of that same word in part of the text appearing below the title 'Part H --- Options for receiving written communications' in Form 1010, which reads, '[a]uthorised recipient --- This is a person authorised to receive written communication other than a migration agent. All written communications that would otherwise have been sent to you in relation to this application will be sent to that person' (see again [29] above). 32 The applicant further submitted that the question of whether an authorisation has been withdrawn or varied must be considered subjectively and where there is no direct evidence of intention 'this is assessed having regard to the circumstances', reference being made to Song v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 685 at [35] and Qiu v Minister for Immigration and Multicultural and Indigenous Affairs (2006) FLR 120 at [24] in support of that proposition. The applicant observed in any event that even if the issue of withdrawal needs to be assessed objectively, and the contents of Form 1010 are available for such an inquiry, 'at its highest the...form does no more than vary the authorisation to Ms Tang by providing that "written communications about business skills monitoring" were to be sent to the applicant'. Aside from any debate as to the materiality of '[a]ll written communications about Business Skills monitoring...' the subject of par 71 of Form 1010, the fact is that some two and half years or so after the signing by the applicant on 15 October 2001 of the original or initial Form 956, the applicant left blank and hence inapplicable in the context of Form 1010 the fourth box in Part H bearing the description or subject 'Authorised recipient'. To the extent that the hypothetically reasonable person may be taken to have assigned significance to filling out and signing that Form 1010, the evident intention of that person objectively speaking would have been to provide updated information to the Department, upon which the Department would be objectively presumed to place reliance. Whilst therefore that form comprised an authority said to include '... authorising DIMA to send that person any communication documents or notifications relating to my application/sponsorship that would otherwise have been sent to me', the authority was said not to '... extend to every matter in which the Minister might have dealings with the applicant'. It was submitted by the Minister to follow therefore that '... there was no relevant authorised recipient appointed at the time that the delegate sent out the 24 month sponsorship form (referring thereby to Form 1010) headed 'Survey of business migrant class and resident class 24 and 36 months', or more here relevantly, the 'notice of intention to cancel' sent by the Department on 13 April 2005. By 'authorised recipient', the Minister used the description to that effect contained in s 494D(1). Accordingly it was contended by the Minister that s 494D had no application to the present case. 34 In support of that threshold submission of the Minister said to be premised upon a natural reading of the applicant's written authorisation (ie Form 956) signed on 15 October 2001, it was pointed out by the Minister that there was no reason to believe that a person who is applying for a visa to enter and remain in Australia would necessarily wish or intend to retain the person so authorised as a recipient in relation to correspondence concerning the visa application to remain a recipient for all subsequent dealings with the Minister, in the absence of a written indication to the contrary. That was said to be especially the case where, as here, it was the apparent intention of the applicant, at the time of grant of the controversial authority (ie the 'Authorisation of person to act and receive communication' signed by the applicant as early as 15 October 2001), to move forthwith to Australia, and thus materially distant from her Taipei resident recipient (ie Ms Tang). There is I think force in that submission. 35 It was submitted moreover by the Minister that '... if somehow, these authorisations should not be read according to their natural terms but in some more general fashion, this would not assist the applicant'. That was said by the Minister to be so because prior to the giving by the Department of the notice of intention to cancel the subject visa, the applicant Ms Lo had informed the Minister, in the context of her completion on 7 July 2004 of Form 1010, '... that she wished all correspondence in relation to the monitoring of her business skills ... to be sent to her personally, [the applicant] electing not to tick the box nominating an authorised recipient', but only the box nominating 'Myself'. Having regard to the time which had elapsed and the events which had happened since the signing of the initial Form 956 back on 15 October 2001, there is evident force to that submission. It was further said by the Minister, in my opinion rightly, that '[n]othing in the relevant provisions of the Migration Act indicate that a person can require the Minister to send correspondence both to an authorised recipient and the person[s] themselves', and further that '[y]ou either authorise a person to receive correspondence for you or you do not'. It was yet further said by the Minister that it was 'unambiguous that by July 2004' (ie the date of compilation by the applicant of Form 1010), the applicant did not seek to 'authorise any person to act on her behalf... in dealings with the Department...', to cite in that regard the text of Form 956. In that regard, reference may be made again to Part H of Form 956 headed 'Options for receiving written communications', in relation to which the applicant signified her wish to receive in person 'all written communications about Business Skills monitoring' from the Minister. That submission was said to be further sufficient per se to dispose of the applicant's case. 36 I have already observed incidentally that by question 3 of Part A of that Form 1010, as completed by the applicant, she indicated her agreement to the Department communicating to her by both facsimile and email, the relevant contact details being of course detailed thereby. I have also already observed that the applicant's residential address in that Form 1010 so completed by her on 7 July 2004 was 'No. 3 Allenby Crescent Strathfield NSW 2135' (see again par 5 of Form 1010), that being the address of 'Myself' (see again par 71 of Form 1010) and said by the Minister to be at least to cover '[a]ll written communications about Business Skills monitoring ...'. The Minister acknowledged in that context that the applicant sought nevertheless to avoid the consequences of the foregoing circumstances in two ways which I will address below. 37 The first way was to tender testimonial evidence as to the applicant's absence of any intention, by her completion of Form 1010 and the submission thereof to the Minister, to authorise the withdrawal of her nomination of Ms Tang as her 'authorised recipient'. As I have foreshadowed, the Minister objected to the admissibility of what was described as self-serving evidence of subjective intention to any such effect and submitted that it was incorrect to construe the operation of s 494D(3) as turning upon the subjective intention of the person completing the relevant form. The second way was to contend that 'even if the [Form 1010] she sent would have the effect of withdrawing the authorisation, this Court should determine that it does not have that effect because that form [being Form 1010] upon which the applicant made that nomination [of herself] had itself not been sent to her authorised recipient' being Ms Tang. It was of course on or about 7 July 2004 that the applicant furnished to the Department the Form 1010 which she had signed. The Minister observed that no authority was however identified in support of any such proposition. I do not think that proposition could conceivably be sustained. 38 The further issue next addressed by the Minister was whether in any event, a jurisdictional error would arise from a breach of s 494D(1) by not giving any requisite notice to Ms Tang in Taiwan. That section of the Act requires the Tribunal to 'give to the applicant in the way that the Tribunal considers appropriate in the circumstances, particulars of any information that [it] considers would be the reason, or part of the reason, for affirming the decision that is under review' . Makhu concerned an applicant who had nominated a migration agent, in accordance with s 379G(1) of the Act, as the authorised recipient of communications under the Act. The Tribunal subsequently sent the applicant a letter for the purposes of s 359A of the Act, thereby highlighting certain deficiencies in his application and inviting him to address them. However, the letter was not addressed to the authorised recipient (the migration agent) at the migration agent's address, but rather it was addressed to the applicant care of the migration agent at the migration agent's address and it was copied to the applicant at his residential address. The applicant deposed as to not having received that letter. I do not accept that by nomination of his migration agent as an authorised recipient, under s 379G of the Act, the notice under s 359A must only be given to the applicant by being addressed to and sent to the migration agent. However, this does not prevent the Tribunal giving the applicant a copy of the document. As noted, the letter of 6 February 2003 was addressed to the applicant care of the migration agent at the migration agent's address and to the applicant at his residential address. Section 379G(1) applies where the Tribunal has given to the authorised recipient, instead of the applicant, the document. Section 379G(2) provides, firstly, that giving the document to the authorised recipient means that the Tribunal is taken to have given the document to the applicant. However, it also expressly preserves the right of the Tribunal to give to the applicant a copy of the document. That it did. The applicant submitted, in the alternative, that if his Honour's decision is construed as standing for the 'broader proposition that deemed notification to a principal is effective even if an authorised recipient is not given a copy, then the decision is distinguishable because the service of the s 359A notice in that case was a procedural requirement in the course of the exercise of jurisdiction'. It was contended therefore that in the present situation, the service of the notice of intention to cancel is necessary relevantly to found jurisdiction. 42 The applicant further invoked Chen v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 1000 , where Raphael FM found that a decision of the Refugee Review Tribunal was invalid because of the absence of compliance by the Tribunal with the terms of the former s 379G(iv) of the Act. The fact that the Tribunal is entitled also to send a copy of the correspondence to the applicant, does not detract from the importance of the provision requiring it to send the document to the authorised representative for the reasons that Mr Dobbie posits. There is a similar provision in subsection 379G(iv) which I believe supports Mr Dobbie's view that the section itself is bent upon ensuing that at no stage shall the applicant's authorised representative be kept out of the loop. In making the point that I have above, I am sensible of the fact that I appear to be flying in the face of the decision of his Honour Mansfield J in Makhu (supra). With respect to his Honour, whilst it may well be that his decision was correct when handed down, the views of the High Court concerning the importance of mandatory provisions of the Migration Act and the fact that his Honour may not have had the advantage of Mr Dobbie's assistance and his association of subsection 379G(iv) with subsection 379G(ii) permits me, I believe, to respectfully differ from the views expressed by him in that case. His Honour takes a view different to mine as to the work that is required of the word "instead". It appears to me that he uses it to give the Tribunal the ability to choose between which parties the Tribunal may address, whereas I believe that the Tribunal has no such discretion and that, in fact, there are no circumstances in which the authorised recipient should not receive a document. Whilst the Minister submitted that the reasoning of the Full Court in Le is not consistent with the reasoning of Mansfield J in Makhu , he made the qualification that this is not to 'concede that Le is correctly decided or, to concede the issue'. The Minister contended that unlike the situation in Makhu , Le concerned a situation where there had been no grant of the visa and the correspondence in issue was held to be covered by an authorisation of a person under s 494D(1) in relation to the visa application that was still pending in that case. It is not for the Minister to ascertain whether or not an Authorised Recipient has died or is inactive. So long as the Minister is able to give documents to that Authorised Recipient by a method that the Minister considers appropriate, the applicant will be taken to have received the documents. Furthermore, the Minister must give a document to the Authorised Recipient. It was asserted that in the present case that 'the principal did receive actual notice and the Minister relies upon his submissions to the effect that there has been no jurisdictional error in those circumstances'. 45 In reply the applicant submitted that the Full Court in Le made it clear that s 494D authorisation operates until it is varied or withdrawn and that the Minister's contention that the authorisation in this case did not extend beyond the grant of the visa must be rejected. Another unequivocal effect of s 494D(2) is that, by giving a document to the Authorised Recipient, the Minister is taken to have given the document to the applicant. 46 In regards to the Minister's reliance on Le in support of the argument that where actual notice has been received no jurisdictional error arises, the applicant submitted in reply that 'the comment by the Court in Le at [31] that a question may arise as to whether there is jurisdictional error when actual service has been effected is clearly obiter dicta , and does no more than pose the question without suggesting an answer'. The notice of intention to cancel was said to found the jurisdiction to make the decision, and that a failure to strictly meet all the requirements of the Act concerning service of it will be fatal to the jurisdiction which depends upon it. 47 In my opinion, the Minister is entitled to succeed, in the context of the circumstances of this case, essentially in line with his submissions of his case which I have outlined or reproduced. Those submissions seem to me to reflect the correct operation of the legislation presently in force as well as to produce an outcome that gives expression to the prevailing procedural requirements for effective notice of cancellation of visas, and, in particular, business or business skills visas. The situation propounded by the applicant seems to me more strictly to be approached as that of fulfilment or otherwise of statutory requirements for cancellation of a business visa. The issue arising for determination is whether in the events which happened, being events not at least relevantly in dispute, the Minister was required to give the subject notice of intention to cancel the applicant's business skills visa to Ms Tang at the address appearing in the applicant's original Form 956 bearing date 15 October 2001 and headed 'Authorisation of person to act and receive communication', being RM 703, No. 9, Nan-King E. RD., SEC 3 , Taipei City, Taiwan R.O.C. Upon that footing the applicant postulated the conclusion that the Minister's sending by post on 13 April 2005 of that notice of intention to cancel addressed to the applicant (of course as the visa holder) at No. 3 Allenby Crescent Strathfield NSW 2135 was invalid and ineffective to cancel the applicant's visa. There was no suggestion raised by the applicant that she did not receive in due course that notice of cancellation bearing date 13 April 2005, her only case being that the notice was invalidated by not having been sent to Ms Tang at her Taiwan address, that address also having been of course that which was specified in the applicant's Form 47BU completed and sent to the Department earlier on 15 October 2001 in the context of the applicant's original visa application. 49 In my opinion, the Minister's response to the applicant's case, as framed in outline in [33] above, is soundly based on the operation of the Act, and in particular on the prescription concerning the giving of notice of a ' proposed cancellation ' of a visa in conformity with the stipulations relevantly of the Act, and ss 134 and 135 and also of ss 494A and 494D thereof in particular. I can see no substance in as well as no sensible basis for the applicant's case. The applicant's details regarding correspondence contained in the initial Form 956 bearing date 15 October 2001 was plainly and unequivocally overtaken and superseded by the applicant's subsequent Form 1010 and Form 956, bearing dates 7 July 2004 and 5 May 2005 respectively, and understandably so given the transpiration of events which had subsequently taken place, including the applicant's subsequent presence at least for some time in Australia. In expressing the foregoing reasons I have reached the same conclusion as that of Deputy President Professor Walker below. Whilst my reasoning is more expansive I think that is because of the additional arguments which counsel for the applicant placed before the Court. I would agree moreover with Professor Walker's approach to reasoning as well, geared as it was in substance as well as appropriately to the relevant events which happened. My approach to the material and circumstances otherwise placed before the Court, requires therefore that the applicant's present application transferred from the Federal Magistrates Court be dismissed. 50 It follows that the present application must be dismissed with the usual consequence as to the costs thereof, inclusive of the proceedings to the extent initially commenced in the Federal Magistrates Court. 51 I would presume to add the observation nevertheless that the events which the applicant related as having befallen to her are undoubtedly distressing and may conceivably have contributed to her apparent failure to fulfil her visa requirements. That is not of course a matter falling within the purview of circumstances appertaining to the present application. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | business skills visa address in country of origin disclosed by applicant in context of application for visa subsequent grant of visa different addresses disclosed in australia in departmental forms lodged by visa holder whether notice of cancellation of visa invalid because not sent to overseas address disclosed in original application but to address in australia disclosed subsequent to grant of visa notice validly given to later notified address migration |
A penalty of $1,750 be imposed on the seventh respondent for breach of s 187AA of the Workplace Relations Act 1996 (Cth). The penalty so imposed be paid to the Consolidated Revenue Fund within 21 days. It is declared that the seventh respondent committed a breach or non-observance of the Maxim Electrical Services Pty Ltd Enterprise Agreement 2000-2003 by failing to follow the steps detailed in cl 13 of the agreement. 3 The seventh respondent, Maxim Electrical Services (Vic) Pty Ltd admits to contravening s 187AA(1). Under that section it is unlawful for an employer, such as Maxim (Vic), to pay wages to an employee for a period during which the employee engages in industrial action. That is yet to be determined. Those payments totalled $2,056.83. 7 Maxim (Vic)'s usual policy concerning the payment of "strike pay" is that if employees withdraw their labour, and strike, they are not paid. However, on safety issues, it has abided by rulings of a Dispute Board, under the auspices of the certified agreement referred to at [9] below. 8 Mr Birkett, of Maxim (Vic), authorised the relevant payments because he did not then believe that the relevant employees had undertaken industrial action. 11 The facts and circumstances of this matter are not materially distinguishable from those referred to in the previous judgment in this proceeding, that is, Furlong v Maxim Electrical Services (Aust) Pty Ltd [2005] FCA 1518. As was the case with the contractor referred to in that judgment, the breaches of s 187AA and of the relevant agreement were inadvertent and unlikely to recur. No utility would ordinarily be served by imposing a penalty. However, the parties, operating at arms length and competently advised, consider that a penalty of $1,750 should be imposed. I see no good reason to depart from that agreement as the sum is not a significant one for the seventh respondent. I will impose the penalty for breach of the Act but not impose any additional penalty for breach of the certified agreement, in respect of which a declaration will be recorded. 12 For the sake of completeness, as I did in the previous judgment, I reiterate that in accepting that Maxim (Vic) breached the agreement I am not expressing any view about the conduct of the third respondent, the Union or any respondent other that Maxim (Vic). 13 At the directions hearing at which this aspect of the proceeding was programmed, counsel for the third to sixth respondents formally submitted that judgment against Maxim (Vic) should not be given at this stage. The submission was only formally advanced given my ruling at [10] to [13] in the previous judgment, in which I accepted the approach of Merkel J in Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428. I still adhere to that approach. Therefore there is no reason to withhold judgment concerning Maxim (Vic). I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | payments in relation to periods of industrial action breach admitted penalty imposed in accordance with the agreement of the parties operating at arms length industrial law |
He seeks an interlocutory injunction to restrain the respondent from using a mark which is alleged to be substantially identical with or deceptively similar to the applicant's mark. 2 For an interlocutory injunction there must be a serious question to be tried and the balance of convenience must also favour the grant. 3 Both the applicant and the respondent own driving schools catering to the Chinese community. The remaining six are identical with those in the applicant's mark. Thus the Chinese characters in the respondent's advertisement translate as "Melbourne Professional Driving School". There is no complaint regarding the English text "Greater Melbourne Professional Driving School". 5 Both marks have appeared in advertisements in Chinese newspapers circulating in Melbourne. The respondent first contended, correctly in my view, that there was no arguable case that he had used the Chinese characters in question as a trade mark. The vocabulary of the English language is common property: it belongs alike to all; and no one ought to be permitted to prevent the other members of the community from using for the purposes of description a word which has reference to the character or quality of goods. Moreover, used in the context of the advertisements, the descriptive nature of the Chinese characters is emphasised by their use in conjunction with the "L" device which forms the distinctive part of the respondent's mark. The respondent has used characters which appropriately describe his business and, in addition, he has used a device which is quite different from the steering wheel device in the applicant's mark. 10 The respondent's second argument, which I also accept, was that s 122(1)(b)(i) of the Act applies. Section 122(1)(b)(i) provides that a person does not infringe a registered trademark when the person uses a sign in good faith to indicate the kind, quality, quantity, intended purpose, value, geographical origin or some other characteristic of services. While there were some assertions from the bar table regarding the respondent's use of information about the applicant's business allegedly acquired by the respondent while he was an employee, there was no evidence to that effect. In any event, the important issue for this case is whether the respondent's use of the sign was in good faith. Given that the words complained of in the respondents' mark are purely descriptive, as already explained, there is no reasonable basis on which to attribute any lack of good faith to the respondent in relation to the use of his mark --- that being the only relevant question for present purposes. 11 Given my findings above, it is unnecessary to consider in any detail the further ground relied upon by the respondent, namely that the respondent's mark was not substantially identical with or deceptively similar to the applicant's mark. Counsel for the applicant referred to Melbourne Chinese Press Pty Ltd v Australian Chinese Newspaper Pty Ltd [2004] FCAFC 201 , a trade mark infringement case concerning the mastheads of competing Chinese language newspapers. At first instance, Conti J held that the respondent's masthead was deceptively similar to the applicant's mark and therefore constituted an infringement, a decision which was upheld by the Full Court. As was discussed in Melbourne Chinese Press at [41], the two marks are not to be compared side by side, and the marks must be considered in their entirety. Having regard to the distinctive devices used in the marks in conjunction with the purely descriptive Chinese characters, I am not satisfied there is an arguable case of deceptive similarity. Due to the infringement of my registered trademark by the respondent, I believe that I have lost income and I will continue to lose income if the respondent is not restrained from infringing my registered trade mark. I have learnt from many would be learner drivers that they thought that the respondent's business is also my business, or is associated with my business and hence they engaged him as their instructor. I did not uphold the objection, but because of its vagueness very little evidential weight can be attributed to it. Further, there is also some hardship that would occur to the respondent were the injunction to be granted as he would be required to register another business name. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | trade mark infringement claim against owner of rival driving school both advertisements contained six identical chinese characters interlocutory injunction application whether serious question to be tried practice & procedure |
The proposed amendments, including the joinder of Sound Advertising, are disclosed in a draft third further amended application and third further amended statement of claim, copies of which are annexed to the notice of motion which was filed in Court today. The notice of motion is supported by an affidavit from the solicitor on the record for the applicants, Nathan Mattock of Marque Lawyers, as well as a further affidavit which was read in support of the notice of motion by William Vickery, and the tender of various documents. From the point of view of the respondent, Optus Mobile Pty Limited ( Optus ), the evidence primarily comprised an affidavit of Lindsay Powers of Minter Ellison Lawyers, the solicitor for Optus in these proceedings. The applicants' case in support of the proposed amendments can be briefly summarised as follows. The applicants claim that up until the filing of Optus' further amended defence, in or about mid September 2009, both the applicants and Optus were operating on the basis of an error of fact, the error of fact being that Optus had forwarded a text message to various customers of the applicants on 24 December 2008, being a date before the applicants decided to block access to Optus' customers in terms of the use of the applicants' service. In its second further amended statement of claim, in para 10, the applicants pleaded the sending of the said text message on 24 December 2008. In the further amended defence to the second further amended statement of claim, Optus admitted that the text message had been sent on the date pleaded. However, in the further amended defence filed pursuant to leave which I granted on 18 September 2009, that admission was withdrawn and instead Optus admitted that it had sent the said text message on 25 December 2008. The applicants said that they then realised that the text message could not have caused the applicants to have blocked the access to the service because, in short, the timing sequence simply does not work. Consequently, the applicants took further instructions from various people, including one of the principals of the applicants, Michael Charlesworth, and thereafter obtained for the first time, according to Mr Mattock's evidence, precise details of the actual sequence of events that occurred between 22 and 25 December 2008. As a result of obtaining those precise details, the applicants say that they were instructed to seek leave to amend the claim so as to plead a series of representations that Optus is said to have made directly to the applicants, which representations are claimed to be misleading and deceptive. At the same time, the applicants were also dealing with the expert evidence of Goodwin Gower, filed on behalf of the respondent, who pointed out that the applicants appeared to be claiming damages on behalf of Sound Advertising in circumstances where the applicants had not joined Sound Advertising as a party to the proceedings. Between mid to late September 2009 and 29 October 2009 (being the date on which the applicants first notified Optus of its proposed amendments to the application, the statement of claim and the joinder of Sound Advertising) Mr Mattock was involved in meetings with his clients, the taking of instructions, the obtaining of additional evidence from Mr Charlesworth, in particular, and the redrafting of the proposed third further amended application and third further statement of claim. Vodafone Network Pty Limited ( Vodafone ) (which is a party to two related cross-claims in the proceedings) and Optus objected to the applicants being granted leave to amend the application as proposed, including the joinder of Sound Advertising. They also opposed the proposed amendments to the second further amended statement of claim. Optus made a series of submissions which I will summarise briefly. Optus submitted that the applicants have already had more than an adequate opportunity to make their case. As Mr Powers' affidavit showed, there have been a series of amendments to the pleadings already, including an application to substitute applicants, at which time, according to Optus, the position of Sound Advertising ought to have been considered. Optus emphasised that it was grossly unfair in the circumstances of this case for the applicants to be given the leave they seek a mere four weeks out from the hearing date because the applicants at all times have pressed for expedition of the proceedings. According to Optus, it was unfair for the applicants simply now to say they abandon expedition because, on Optus' version of events, the applicants have come up with a new case based on facts that the applicants knew all along. Optus said the proposed amendments plead a whole new case. Mr Powers described in his affidavit the further inquiries Optus will need to make and the further evidence that Optus will need to obtain in order to address the representations proposed to be pleaded by the applicants. In addition, and contrary to Mr Mattock's suggestions in his evidence that all discovery has been completed, Optus says it is clear that there will need to be additional discovery by the applicants. Mr Powers' affidavit notes that there has been an order for security for costs in Optus' favour in the amount of $300,000 in circumstances where already the costs substantially exceed that amount, apparently being in the amount to date of approximately $580,000. Mr McHugh SC, counsel for Optus, submitted that if the existing case that the applicants seek to run is hopeless because causation cannot be proved, then the applicants should start again and Optus should get all of the costs of the proceedings. If the case, as it currently stands, is not hopeless then the applicants should be held to their existing case. Optus emphasised not only the newness of the pleadings but the inadequacy of the explanation as to why the amended case was not pleaded originally. This is based on evidence, particularly emails that were tendered and which appear on their face at least to show that in January 2009 William Vickery, now one of the principals of the applicants, was aware that the blocking of access occurred before Optus sent the text message in question. This led Optus to submit that either a tactical decision had been made to run the case in a particular way, or the decision that was taken to focus on the text messages as causative of the blocking is completely inexplicable given the evidence of Mr Vickery and what must have been the knowledge of Mr Charlesworth. In addition, Optus said the prospects of the new case are not particularly strong. There is evidence where Mr Charlesworth describes the very matters which are now relied upon as causative of the applicants' decision to block access as mere weak assertions. According to Optus it is obvious that the real reason that the blocking occurred was because Optus had stopped paying the applicants; that, according to Optus, has nothing at all to do with the representations which are now alleged in the proposed third further amended statement of claim. Optus pointed out that Mr Charlesworth affirmed an affidavit before Optus filed its defence. In this affidavit, Mr Charlesworth asserted a reliance on the text message of 24 December 2008 as the reason for the decision to block access. Accordingly, and contrary to the applicants' suggestion, Optus said that it could not have been in any way caused by Optus' pleading. In addition, Optus said that the period of about six weeks between mid-September 2009 and 29 October 2009 (being the date on which the applicants first let Optus know about the proposed amendment) is simply too long, particularly in a case where an applicant has received, as these applicants have, an expedited hearing. Optus thus submitted that the case is analogous to the circumstances in Aon Risk Services Australia Limited v Australian National University (2009) 258 ALR 14 ; [2009] HCA 27 ( Aon ) leading to the conclusion that it would be well within a proper exercise of discretion to refuse the amendment. From its point of view, Vodafone also pointed to the prejudice to it if the hearing date is vacated (as the applicants accepted it must be) if leave to amend is granted. There has been a great deal of evidence traversed both in support and against the granting of leave to the applicants to amend their application and their statement of claim. There are certainly some inadequacies in the applicants' explanation for the circumstances which have led to the position today. Imperfection of explanation, however, is not the same as lack of explanation. Nor is imperfection of explanation the same as the making of a deliberate tactical decision to run a case in a particular way only to later alter a tactical decision when it is no longer seen to be beneficial. The evidence does not allow me to draw any inference against the applicants that they made a deliberate tactical decision to frame their case, initially on the basis of an allegation of reliance on the sending text messages as the reason for blocking access only to change that position when confronted with an obvious difficulty that the text messages appear to have been forwarded after the decision to block was already taken. At worst, the evidence seems to me to suggest that in an imperfect world imperfect decisions are sometimes taken with respect to the best way in which to frame pleadings. In this regard I particularly have in mind Mr Mattock's evidence. Despite his cross-examination, Mr Mattock did not waver from the fact that he was unaware of the relevant sequence of events until sometime in mid to late September 2009. While it might be possible, on the basis of the few emails and other pieces of information I have, to draw some inferences that there has been at least a significant and not particularly well-explained change of evidentiary position on behalf of Mr Charlesworth, I am mindful of the fact that while his affidavit and certain emails have been tendered there is, no doubt, a vast number of documents in this case. Presumably I have been taken to only a few of them. Ultimately, as Mr Kunç SC (counsel for the applicants) submitted, I do have an explanation for why things were run the way they were. This is not the time for me to consider or rule upon the plausibility or otherwise of Mr Charlesworth's attempted recollections of why he took certain actions as set out in his affidavits. By this, I understand Mr Kunç's submission to mean that what I know from Mr Mattock's evidence is why the litigation has been run as it has been to date. What I know from his evidence is that the applicants at least appeared to have been operating under some misapprehension as to the relevant sequence of events. Whether or not it was reasonable for them to be operating under such a misapprehension is a separate point. They clearly were operating under that misapprehension which has now been clarified by reason of the events of mid to late September 2009. It appears to me therefore that many of the circumstances on which Optus relies to oppose the grant of leave do not carry the weight that Optus would like me to place upon them. I accept that the applicants sought and obtained expedition. I accept that there has been a period of six weeks between when it appears that the applicants knew that they had a difficulty with their case as currently pleaded and the first intimation on 29 October 2009 to Optus of the need for the applicants to amend their application and their statement of claim. Insofar as it was suggested, I do not accept that the applicants simply sat on their hands and did nothing within that six week period. From Mr Mattock's evidence, it is apparent that considerable work was done by the applicants in that six week period to put them in a position to have the proposed third further amended application and third further amended statement of claim available for the purposes of the hearing of this notice of motion. I also do not accept that the amendments can be described as an entirely new case. I accept in part the amendments involve a new case, but it is not a wholly new case in the sense of being completely outside the scope of what was originally pleaded. As Mr Kunç said, the allegations that are now made are connected with the allegations of illegality that are already on foot. Moreover, they are also connected to the web of events that are already pleaded and are the subject of dispute in the proceedings. I accept that it cannot be thought with any degree of confidence that discovery by the applicants is complete. Mr Mattock's evidence made that clear. Undoubtedly, discovery remains incomplete and further work will have to be done. I accept also the fact that these proceedings appear to have involved numerous interlocutory appearances by the parties (apparently, more than sixteen occasions since 23 April 2009) and multiple applications by both the applicants and Optus, as set out in para 20 of Mr Powers' affidavit. While these matters might be regrettable, they do not undermine the fact that the essential issue on an application to amend such as this is the interests of justice, having regard, of course, to the position of both parties and the capacity for costs and delay to be incurred as a result of an application made four weeks before a hearing date and which, the applicants accept, will lead to the hearing's vacation. Nevertheless, I do not think that it would be just in the circumstances of this case to hold the applicants to their existing pleading. I am also not in a position to conclude with any degree of confidence that the case the applicants now wish to run is as weak as Optus would have me think. It seems to me, at least, prima facie on the material as pleaded, the case is an arguable one. Accordingly, the issue of the prospects of success does not weigh in the balance against the applicants. In terms of the issue of security for costs, essentially I am unable to deal with the issue now because, understandably, Optus has not yet been able to put forward its position on security. It is relevant that there is existing security in place and that the costs already exceed that security, but I do not think that fact can outweigh the fact that the applicants have identified at least a prima facie arguable case which they wish to put. Ultimately, I do not accept that this case is on all fours with the circumstances in Aon . In Aon , the circumstances were briefly explained by French CJ in [4] when his Honour described the unduly permissive approach at both trial and appellate level to allow an application for amendment which was made extremely late, was inadequately explained, necessitated the vacation or adjournment of the dates set down for trial and raised new claims not previously agitated apparently because of a deliberate tactical decision not to do so. His Honour said that in such circumstances the person making the application bears a heavy burden to show why, under a proper reading of the applicable court rules, leave should be granted. In this case, the application is not made as late as the application the subject of Aon . In Aon , the application was made on the third day of the period actually set down for a four-week hearing. In this case, the application is being made before the hearing but in circumstances where it is accepted that the consequence will be the vacation of the hearing date. Again in contrast to Aon , I do have an explanation of the reasons for the lateness of this application. I accept the distinction which Mr Kunç has drawn between an explanation for why the litigation has been run as it has been and an explanation about Mr Charlesworth's changes in his evidentiary position. I have the former explanation and, ultimately, although this shows imperfections in the way that the applicants have put together their case, an application to amend is not an opportunity to punish an applicant for not getting everything right the first time around. It is true that this will lead to the adjournment of the dates set down for trial and it is true that some new claims, at least, are raised. But, as I say, it is not the case here that the applicants made a deliberate tactical decision to plead their case in a particular way from the outset. For these reasons I propose to grant the leave to amend because, essentially, I accept the principal submissions made on behalf of the applicants that I have no real basis for finding any deliberate tactical decision by the applicants which have led to the current position. I also accept the nature and importance of the amendments to the case which the applicants wish to run and that if they are not granted leave to make the amendments then their claim for damages, at least for the period between 24 December 2008 (when the decision to block access was made) and the end of March 2009 (which is apparently when Optus, itself, blocked access) may not be available. This, I am prepared to infer, would be a significant part of the damages case that the applicants wish to make. Further, I accept that the applicants have acted reasonably expeditiously since they became aware of the true situation. In this regard, I take into account that Mr Charlesworth resides overseas and attended Australia, according to Mr Mattock, in or about the first week of October 2009, at which time Mr Mattock took the opportunity to take detailed face to face instructions from Mr Charlesworth. I also give weight to the factor that the applicants have pointed out to me in their written submissions in paras 22 and 23 --- that is that the hearing date in this matter was fixed before all of the evidence had been filed and before the respondent's evidence had been filed. The hearing was fixed because of the expedition that the applicants sought and obtained on the basis of their view that corrective advertising was an essential element of righting the wrong that they alleged had been done to them. However, some of the urgency of the case has been removed, at least from the applicants' perspective, because Optus, itself, is now blocking the access to the call system. For these reasons I cannot conclude that it would be in the interests of justice to give greater weight to the position of the respondent and its proper expectation that the matter would proceed as quickly and with the greatest degree of efficiency as possible than the interests of the applicants to ensure that the case that they wish to run is able to be run so that the real issues between the parties can be heard and determined. If I need to say so, I do not accept the applicants' submission that I have no discretion because Order 13, rule 22 of the Federal Court Rules is engaged, but this is a moot point, given that I have reached the view that leave should be granted in any event. I also note that I do not accept a submission that the principles established in Aon are inapplicable because of the absence of a rule in this Court equivalent to the rule under consideration in Aon . But, again, I do not need to determine that conclusively in this case. Nor do I need to determine the question whether Aon effectively overrules Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 ; [1997] HCA 1 ( J L Holdings ) or involves a different emphasis from J L Holdings . Even having regard to the principles as espoused in Aon , I am of the view that in this case the importance of the amendments to the applicants demands that leave be granted. Such leave, obviously, will be on the basis that the hearing date will need to be vacated. The applicants agree that they should pay the costs occasioned by the vacation of the hearing date and the granting of amendment. The applicants also agree that I should not make consequential orders at this stage, because all the parties need to consider their position. I accept this is the case. The one outstanding issue that I can resolve today is whether the applicant should also pay the costs of the notice of motion filed today in Court. Optus relied on what it says is standard principle as reflected in the commentary on the Federal Court rules at [40,455.5] in Butterworths. Practice & Procedure: High Court and Federal Court of Australia . Sydney (2000), loose-leaf service (last updated October 2009 Service 198), to the effect that the terms that are usually imposed on a party in amending a document are that he or she must pay the costs of the application for leave to amend and/or occasioned by and thrown away as a consequence of the amendment. However, if an opponent unreasonably opposes such an application, he or she may be ordered to pay the costs of the motion for leave to amend. It is my understanding that the basis of this general principle is that an applicant seeking leave to amend has an independent obligation to satisfy the Court that leave should be granted, irrespective of the position that the respondent takes. That is, even if the respondent does not oppose an application for leave to amend, such leave will not automatically be granted. The person seeking to amend must come to the Court with sufficient material and submissions to persuade the Court that leave should be granted. Accordingly, the parties would have to attend Court for that purpose anyway. Mr Kunç for the applicants said that Optus' opposition to leave was unreasonable. I do not accept that submission. Optus has been unsuccessful in relation to its opposition to the motion, but the matters it raised were relevant to the exercise of the discretion and it was entitled to raise them as matters I should consider. Mr Kunç said that the costs should be costs in the cause. However, the applicants have made a late application to amend which Optus was entitled to challenge. Its challenge was reasonable in all of the circumstances and it does seem to me that the costs of the amendment application are part of the price that the applicants have to pay for the position that they find themselves in. Accordingly, I order the applicants pay Optus' and Vodafone's costs of the notice of motion filed 5 November 2009 as agreed or taxed. | notice of motion applying to amend application and statement of claim practice and procedure |
The schemes related to an aged care/retirement village facility known as Claremont Terrace (formerly known as McKinnon Mews), situated at 231-253 McKinnon Road, McKinnon (the "Facility"). The schemes were constituted by the partnership formed pursuant to the partnership agreement dated 30 June 1999 between Kastabon Pty Ltd as manager for the investors in the Kastabon Syndicate and Novena Holdings Pty Ltd as manager for the investors in the Novena Syndicate, and by other contractual arrangements entered into between the investors and other parties. 2 It is helpful to set out the background to the establishment of the schemes and these proceedings. The parties came to a compromise in these proceedings and the following facts and matters were set out in the statement of facts, issues and contentions filed by the Australian Securities and Investments Commission ("ASIC"). They were not, I believe, contentious but it should be noted that they have not been tested in these proceedings. I set them out as background to the two principal issues which I now have to determine in relation to the winding up of the schemes. 3 In 1999 the first defendant, Primelife Corporation Limited ("PLC") encouraged investors to form syndicates or partnerships to purchase the property situated at 231-253 McKinnon Road, McKinnon (the "Property"). At that time, the Property was owned by PLC through its wholly-owned subsidiary, McKinnon Road Developments Pty Ltd, the third defendant ("McKinnon Road"). 4 A series of agreements and arrangements was entered into on 30 June 1999 to facilitate the purchase of the Property, the construction of the Facility on the Property, and the marketing, management and operation of the Facility. 5 Investors formed two syndicates with the objective of participating in a partnership to purchase and operate an aged care/retirement village facility on the Property. The Kastabon Syndicate was formed pursuant to the Kastabon Syndicate Agreement dated 30 June 1999 between Kastabon Pty Ltd ("Kastabon") as manager and the investors listed in the schedule to that agreement. The Novena Syndicate was formed pursuant to the Novena Syndicate Agreement dated 28 June 1999 between Novena Holdings Pty Ltd ("Novena") as manager and the investors listed in the schedule to that agreement. 6 Pursuant to a partnership agreement made on 30 June 1999, a partnership was formed between Kastabon as manager for the investors in the Kastabon Syndicate and Novena as manager for the investors in the Novena Syndicate (the "Partnership"). 7 On the same date, Kastabon and Novena entered into a contract of sale with McKinnon Road for the sale and purchase of the Property for $27.825 million and for the construction of a retirement village on the Property by McKinnon Road (the "sale contract"). The Facility was not constructed at this stage. A deposit of $5.5 million was due to be paid on 30 June 1999, with the residue to be paid in instalments. The purchase price was financed by capital contributions from the investors in the Kastabon and Novena Syndicates and finance was obtained by the investors in part through a mortgage over the Property in favour of McKinnon Road. The mortgage was executed by Kastabon and Novena to secure a loan of the settlement amount from McKinnon Road on the date of settlement. 8 A Marketing and Management Agreement was also entered into on 30 June 1999 between Kastabon, Novena and PLC (the "MMA") whereby a wholly-owned subsidiary of PLC, Prime Life Management Services Pty Ltd, the second defendant ("PLMS"), would provide marketing and management services in respect of the Facility for a term of 25 years. 9 Kastabon, Novena and McKinnon Road also entered into a profit share agreement on 30 June 1999 (the "PSA"). The PSA provided that in consideration of McKinnon Road entering into the sale contract and the PSA, and procuring PLMS to enter into the MMA, Kastabon and Novena agreed to pay McKinnon Road 50% of the Facility's profit for each financial year for 25 years, subject to certain conditions. 10 Certain other relevant arrangements and agreements were also entered into after 30 June 1999. On 4 June 2001, Kastabon replaced Novena as the trustee and manager of the Novena Syndicate. I was informed that Novena was in liquidation. ASIC also states that it was provided with an unexecuted deed which records that the fourth defendant in these proceedings, McKinnon Retirement Pty Ltd ("MRPL"), has now been appointed as trustee and manager of the Kastabon Syndicate and Novena Syndicate in place of Kastabon, and has agreed to assume all the obligations of Kastabon and Novena under the sale contract, the PSA and the MMA. 11 On 24 September 2004 ASIC filed an originating process in each proceeding seeking orders pursuant to ss 601EE and 1324 of the Act for the winding up of the unregistered managed investment schemes known as the Kastabon Syndicate and the Novena Syndicate. On 26 September 2005 I declared that each scheme was a managed investment scheme which was required to be registered under the Act but was not registered. I ordered that each scheme be wound up pursuant to s 601EE(1). 12 I also made a suite of orders establishing a process whereby an independent accountant would inquire into, and report to the Court as to, the nature and identity of the assets and liabilities of each scheme, the past and current members of each scheme and the solvency of the schemes. The independent accountant was then to file a report, which was to be circulated to the members of each scheme. There was a period of time in which any party or member of a scheme could file and serve a proposal in relation to the manner in which each scheme should be wound up. By that date, Clayton Utz had indicated that it no longer had instructions to act. Counsel instructed by Herbert Geer and Rundle appeared not only for the entities which represented the interests of the investors (that is, MRPL, Bizcorp and Kastabon) but also had specific instructions from certain investors. It is not necessary to recite the names of those investors. 15 Some of the proposals which were received did not contain adequate provisions for the winding up of the schemes. They also contained provisions which could not be carried into effect without the consent of the Primelife interests which consent was not forthcoming. Ultimately the parties accepted that it was appropriate to make a number of orders which had been proposed by MRPL, Bizcorp and Kastabon and certain investors. I was satisfied that those orders should be made. MRPL be removed as trustee and manager of the Kastabon Syndicate. 2. Colin McIntosh Nicol of McGrath Nicol + Partners of Level 8, IBM Centre, 60 City Road, Southbank be appointed as trustee and manager of the Kastabon Syndicate. 3. All the property held by MRPL upon trust for the members of the Kastabon Syndicate be vested in Colin McIntosh Nicol for the purposes of the winding up and otherwise for the purposes of or in connection with the scheme. 4. ASIC and the defendants deliver any books and records of the Kastabon Syndicate and the scheme in their possession or power to Colin McIntosh Nicol at McGrath Nicol + Partners of Level 8, IBM Centre, 60 City Road, Southbank by 4.00pm on Friday 28 July 2006. 7. Colin McIntosh Nicol shall be entitled to reasonable remuneration and reasonable costs and expenses properly incurred in the performance of his duties and the exercise of his powers as trustee and a manager of the Kastabon Syndicate and as liquidator of the scheme to be calculated on the basis of time reasonably spent by him and his staff, such remuneration, costs and expenses to be paid out of the assets of the scheme. Colin McIntosh Nicol is entitled to bring in the name 'Colin McIntosh Nicol as Liquidator of the Claremont Terrace Scheme' any proceeding (as he may be advised) on behalf of the scheme and/or Kastabon Pty Ltd and/or Novena Holdings Pty Ltd (notwithstanding that it has been deregistered) against any person including any other party or parties to the MMA and/or the PSA referred to in ASIC's Statement of Facts and Contentions herein. 2. Until 24 October 2006 or further order, McKinnon Road is restrained from taking any step to rescind or terminate the sale contract referred to in ASIC's Statement of Facts and Contentions herein, save with the leave of the Court or the consent in writing of Colin McIntosh Nicol. 18 The managers of the Syndicates have not completed the purchase of the Property on which the Facility has been constructed and the vendor, McKinnon Road, has not taken any steps to rescind the contract. The investors' concern is that when the liquidator is appointed he will find a rescission notice on his desk. The investors want the liquidator to have sufficient time to familiarise himself with the circumstances of the Syndicates, the matters covered in the independent accountant's reports and to consider whether he should apply to the Court for an injunction restraining rescission of the sale contract or whether he should attempt to complete the purchase. 19 It appears that the investors do not have the ability to arrange finance for the balance of the funds required to complete the settlement of the sale contract. Counsel for the investors contended that the security of the Property was not sufficient for financiers such as banks to provide the requisite funds because of the under-performance of PLMS as manager of the Facility. He said that units in the Facility had not been sold to the promised expectation level and the Facility had not been managed at the level of profitability that was expected or warranted. This inability to procure finance to enable settlement of the sale contract exposed a difficulty for the investors because there appeared to be no point in seeking to restrain McKinnon Road from rescinding the sale contract if the investors did not have the financial backing or strength to complete the sale contract. Even if the investors had some cause of action for damages against the persons involved in promoting the schemes for not carrying out their promotional and management obligations properly or for misrepresentation or breach of warranty (on which I express no view) it was difficult to see how such causes of action should create an inhibition on the opportunity for McKinnon Road to rescind the contract of sale. 20 The investors were not themselves currently proposing to institute any proceedings against any of the defendants or persons involved in the promotion and implementation of the schemes for not carrying out their obligations properly or for misrepresentation or breach of warranty but rather wished to preserve the position or opportunity for that to be done in the future either by the liquidator on their behalf or by themselves individually. In short, the investors are seeking a moratorium on rescission of the sale contract for three months to enable the liquidator to consider whether he might bring such a proceeding. 21 Although the investors were seeking an injunction restraining the vendor, McKinnon Road, from taking any steps to rescind the sale contract in order to preserve the status quo pending consideration by the liquidator, they were not seeking an interlocutory injunction in the usual sense to enable final determination of a substantive cause of action which had been commenced or was proposed to be commenced. Rather they were pressing for a final order, as an adjunct to the winding up order and in aid of it, in order to give the liquidator the opportunity to consider the position he wished to take in relation to the sale contract. In that sense the investors were seeking final relief, albeit not in the terms of a permanent injunction but rather in terms of a temporary injunction. They submitted that no tenable cause of action had been established or propounded which would sustain an interlocutory injunction and that, in any event, even if there were such a cause of action, damages would be an appropriate remedy. They also submitted that if any such interlocutory injunction was to be granted it must be predicated upon the giving of the usual undertaking as to damages and that it was not clear from whom such an undertaking would be forthcoming. The investors did not proffer any such undertaking. 24 It is fundamental to the grant of an interlocutory injunction that there be a cause of action relied upon in respect of which final relief is sought for which the interlocutory injunction is drawn in aid. An interlocutory injunction must be granted in aid of an ultimate cause of action and it is not a sufficient basis for the grant of an interlocutory injunction that it might be appropriate to preserve the status quo as a matter of convenience to enable parties to consider whether or not they should launch an action. However, the scope of s 601EE(2) of the Act requires separate consideration. 25 The High Court made it abundantly clear in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 208 CLR 199 that before an interlocutory injunction can be granted it is necessary to identify a substantive right which is to be determined at the trial and in respect of which final relief is sought. An interlocutory injunction, according to equitable principles, cannot be granted simply to preserve the status quo if no right is sought to be vindicated by final relief: see Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (supra) at 218 per Gleeson CJ. 26 However, two of the judges in the majority in Lenah Game Meats made it clear that they were not concerned with "some special statutory jurisdiction" (per Gleeson CJ at 217; see also Gaudron J at 232) to grant injunctive relief. 27 Although the investors may wish to preserve the status quo of the sale contract to see whether they may have some cause of action which might be brought by the liquidator in their name, it was not suggested that the sale contract is illegal as a result of having been entered into by participants in an unregistered managed investment scheme. There is clear authority to the contrary. The legislation does not expressly make an unregistered scheme unlawful. Rather it impugns the conduct of the entity responsible for registration by imposing a penal sanction for a contravention of the registration provisions. The members of an unregistered scheme are protected by the provisions whereby the scheme may be compulsorily wound up. There is nothing, therefore, in the scheme of the legislation whereby an implication of an illegality would arise, nor is there anything that points to a legislative intention that contracts entered into as part of an unregistered scheme are illegal. Although it is cast in general terms, s 601EE(2) must be read within the context of a provision for the winding up of a managed investment scheme. It follows that s 601EE(2) must be read as empowering a court to make such orders as it considers appropriate in order to apply such a procedure to an unregistered managed investment scheme. It may also be accepted that the terms of the section allow for further orders to be made as needed so long as they are required for the 'due conduct and completion of the winding up'. The necessary corollary is that an order that could not reasonably be seen as advancing this procedure would not be authorised by s 601EE(2). The concept of winding up, as it is applied by s 601EE to an unregistered managed investment scheme, is not the subject of any explanation or elaboration in the statute. It seems to me, as a matter of general principle, however, that what is contemplated is the realisation of assets of the scheme, discharge of liabilities and distribution of any surplus among beneficiaries or members in an appropriate way. So much is clearly implied by the expression 'winding up', the general meaning of which may be gathered from approaches taken to that general subject under statutes dealing not only with companies but also with partnerships. Those statutory approaches were built on foundations which pre-dated legislation in either area. In this respect, it is noteworthy that the statute itself does not attempt to lay down the basis for or method of winding up. That is, to my mind, an indicator of intention that the court should be able to act in the comprehensive way I have outlined. Expressed broadly, this proposition may well be correct insofar as the substantive rights of third parties are not rights connected with the business of the scheme or its assets or liabilities. But the substantive right which Primelife wishes to insulate from the scope of a power exercisable under s 601EE(2) is the right to rescind or terminate the sale contract which is an asset of the schemes. 30 The concept of a managed investment scheme is an amorphous and fluid concept. 32 The scope of the definition of a "managed investment scheme" has been considered in a number of cases. In Australian Securities and Investments Commission v Takaran Pty Ltd [2002] NSWSC 834 ; (2002) 43 ACSR 46, Barrett J approved and adopted the description and explanation of a "managed investment scheme and its components" in Australian Securities and Investments Commission v Knightsbridge Managed Funds Ltd [2001] WASC 339 at [45] - [49] and Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 at [26]-[32]. I agree with and adopt those descriptions and explanations. 33 Essentially a managed investment scheme that falls within this definition may be described as a network of contractual rights and contractual obligations. In the present case the network of rights and obligations within the scheme includes those under the sale contract which is presently executory and uncompleted. That sale contract and the rights and obligations under it comprise an integral and important asset of the schemes. Thus in considering whether the Court should exercise any power in relation to the sale contract pursuant to s 601EE(2) , it is a mis-characterisation of it to describe it only, or simply, as the subject matter of a substantive third party right. It comprises an asset of the schemes which has to be considered by the liquidator and resolved by him either by completion, termination or compromise. 34 An injunction of the type sought by the investors may be described as an order which preserves the assets of the schemes in the sense that it keeps the sale contract, on the investors' side, alive in order that the liquidator may form a view as to how he wishes to deal with it. The source of the power is found in s 601EE(2) of the Act. It is a statutory power which is not circumscribed by the principles and learning found in equitable doctrines relating to the grant of interlocutory injunctions such as the giving of an undertaking as to damages as a condition of the grant of an interlocutory injunction. Whether such an injunction should be granted will depend upon the reasons for which it is sought. 35 I am satisfied that the scope and content of the powers granted by s 601EE(2) are wide enough to include the granting of an injunction restraining a party with whom the participants or investors in a scheme have contractual or property relationships from affecting, terminating or dealing with subject matter which is an asset of the scheme pursuant to such contractual or property relationships. The purpose of such an injunction is to give a liquidator of the scheme appointed by the Court an opportunity, within a finite time period, to consider how best to deal with that subject matter of the scheme for the purpose of the winding up and in the interests of the creditors and investors or participants in the scheme which is being wound up. 36 The purpose of such an injunction should be to preserve the assets of the scheme only for so long as is needed for the liquidator of the scheme to be in a position to make an informed judgment how best to deal with the asset. 37 There is support in a number of cases for the proposition that the scope of s 601EE(2) extends to the grant of such an injunction on an order to wind up a managed investment scheme. 38 In Australian Securities and Investments Commission v ABC Fund Managers Ltd (No 3) [2001] VSC 397 , Warren J granted a permanent injunction restraining a party from dealing with the funds of schemes which were wound up pursuant to s 601EE of the Act and in respect of which a liquidator was appointed. There was no discussion by Warren J as to the basis for the grant of the injunction. The jurisdiction was assumed. 39 Primelife referred to Australian Securities and Investments Commission v Landy DFK Securities Ltd [2002] FCA 1056 ; (2002) 123 FCR 548 in which a managed investment scheme was ordered to be wound up pursuant to s 601EE of the Act and the Court appointed liquidators of the scheme. The liquidators filed a motion in the winding up proceeding seeking an order for possession of a property owned by the scheme and an injunction restraining the occupant of the property, who claimed to be a lessee under a lease and entitled to purchase the property under an option in the lease, from remaining in possession of the property. The lessee claimed that the Court had no jurisdiction to grant the relief sought in the proceeding and that the Court did not have jurisdiction or power to make a substantive order resolving a dispute between the liquidators and third parties on the liquidators' interlocutory motion in the winding up proceeding. 40 Merkel J held that the Court had jurisdiction to grant the relief sought by the liquidators but not in the winding up proceeding. The liquidators were entitled to commence a proceeding in the Court in relation to the subject matter of the motion. Merkel J said that what the liquidators were seeking to achieve was akin to the right of administrators to apply for directions pursuant to s 447D of the Act and the right of liquidators to apply for directions under s 479(3) of the Act. In my view the applicants' claims should be the subject of a separate originating process, rather than a notice of motion in ASIC's proceeding. However, Merkel J's reasoning does not cover the type of situation presently under consideration. 42 The injunction sought by the investors falls into a different category. The injunction sought, although final in form, is procedural rather than substantive and is not permanent in point of time. It is invoked, in substance, to preserve an asset of the schemes, as part of the liquidator's task in collecting and realising the assets of the schemes. I do not consider that the grant of an injunction for a limited time in the circumstances of this proceeding is inconsistent with the principles and authorities referred to by Merkel J. 43 In Re Stacks Managed Investments Ltd (2005) 54 ACSR 466, White J expressed some doubt about the range of orders which could be made under s 601EE(2) , but he did not express any conclusion on the scope of the Court's power under that section. Section 601EE(2) empowers the court to fashion the winding-up process. But in my view, and notwithstanding the authorities under s 601EE(2) , the subsection does not authorise the court to confer additional powers upon a responsible entity to which third parties would be made subject, or to interfere with the rights which third parties would otherwise enjoy. The fact that the power is to give directions indicates that it is one to direct the responsible entity in how to perform its functions and obligations, not that it be the source of new powers. In this respect it differs from s 601EE(2). Part of the relief sought was an injunction restraining the exercise of rights under a vendor mortgage until after inquiry by an Associate Justice. The vendor mortgage purportedly secured debts due by investors in the scheme in respect of their purchase of the subject property. 45 Issues had arisen as to the parties to the vendor mortgage and as to the amount due to the mortgagee under it. Young J decided to grant an injunction to preserve the status quo and to prevent the mortgagee from enforcing any rights it might have under the vendor mortgage. He did so for two reasons. First, because of the desirability of preserving rights pending determination of the issues as to the amount due to the mortgagee under the mortgage. Secondly, because there was a serious question as to breaches by the management company of its obligations to the investors which justified an enquiry. 46 Primelife sought to distinguish this case from the present circumstances under consideration on the basis that it involved an inter partes proceeding and a dispute about scheme property. Such a distinction is not warranted. The case involved issues as to the implementation of the winding up of the scheme and was not an inter partes proceeding in the sense that it involved a dispute outside the framework of the winding up of the scheme. Primelife contended that whereas Warne v GDK Financial Solutions Pty Ltd (supra) involved a dispute about scheme property, the issue here involved Primelife's right to rescind which could not be classified as scheme property. That distinction is not valid. Primelife's right to rescind is in respect of the sale contract, which is executory and is scheme property. 47 Although the investors in the present case contended that they had a cause of action available to them for misleading and deceptive conduct which would give rise to an injunction restraining enforcement of the sale contract, relying on s 87 of the Trade Practices Act 1974 (Cth), they were not seeking the injunction for the purposes of enabling them to proceed with such a cause of action. Nor were they seeking an injunction to enable them, or for that matter, the liquidator, to institute a proceeding against the Primelife interests for not carrying out their obligations in relation to the promotion, implementation and administration of the schemes. Rather they wished the liquidator to have time to consider whether he might consider such actions being brought by him on their behalf. However, I consider such a possibility as an insufficient basis for the grant of an injunction. 48 Even if such causes of action might be available to the investors or to the liquidator of the schemes on their behalf, such causes of action do not depend for their existence or prosecution on the fact that the sale contract is still alive, executory and capable of being completed by transfer if there were funds or finance available to enable the sale contract to be completed. If the sale contract were to be rescinded such causes of action would still be available to the investors. Of course, whether such causes of action might be successful depends on how the investors put their case and the strength of the evidence that is available to them. 49 Put another way, there is no practical reason for the injunction to be granted or for the status quo in respect of the sale contract to be preserved. The investors do not suggest that they wish to complete the sale contract and they cannot obtain the finance to do so. If the sale contract is rescinded by the vendor, such causes of action as they may have available to them will not, by virtue of that rescission alone, be lost to them. 50 Turning to the order sought that the liquidator be entitled to bring proceedings in his name as liquidator of the schemes on behalf of the schemes and/or Kastabon and/or Novena, there are conceptual difficulties in making such an order. Novena has gone into liquidation and has been de-registered. As counsel for Primelife pointed out, the liquidator is not the liquidator of Kastabon or Novena; rather he is liquidator of the scheme. But what is the scheme? It is not a legal entity as such. Each scheme was defined in the orders of 26 September 2005 winding up the schemes as the partnership formed pursuant to the partnership agreement dated 30 June 1999 between Kastabon as manager for the investors in the Kastabon Syndicate and Novena as manager for the investors in the Novena Syndicate. 51 One of the orders I made on 24 July 2006 was that Mr Nicol be appointed liquidator for the purpose of the winding up of each scheme with all powers necessary for that purpose including the powers that a liquidator of a company would have pursuant to s 477 of the Act as if the schemes were a company. The powers given to a liquidator under s 477(2) include bringing or defending any legal proceeding in the name and on behalf of the company. It follows, consistently with that order, that it is appropriate to order that the liquidator be able to bring proceedings as liquidator of the schemes on behalf of the schemes. However, as I have noted, the schemes are not legal entities. What was wound by the order of 26 September 2005 was the partnership formed pursuant to the partnership agreement between Kastabon and Novena. Each of those companies entered into the partnership agreement as manager for the investors listed in the respective syndicate agreement. It is therefore arguable that any proceeding brought by the liquidator of the schemes would need to have the proceeding brought on behalf of the constituent members of the partnership which constitutes the schemes. 52 Whether any such proceeding as may be brought by the liquidator is properly constituted will depend upon the nature of the causes of action relied upon and the relief which is sought. But, having regard to the fact that the schemes are constituted by a network of contractual relationships, I consider it desirable and appropriate that the liquidator be entitled to bring proceedings as liquidator of the schemes on behalf of the contracting parties who entered into the partnership agreement which forms the core of the schemes. 53 In Hamilton v Piggott Wood & Baker [2003] FCA 1055 , Heerey J made an order entitling a liquidator of an unregistered managed investment scheme to bring proceedings in his name as liquidator of the scheme. Heerey J was faced with the potential problem of two partners in a firm of solicitors who were administering the scheme being the plaintiffs as well as partners in the defendant firm. Heerey J observed at [8] that "the provision for the winding up of an investment scheme cannot always be neatly fitted into the analogy of the winding up of a company", an observation with which I agree. His Honour noted that the scheme itself was not a legal entity and could not be a plaintiff so he gave the liquidator leave to bring the proceeding in his name as liquidator of the scheme. His Honour did not consider the nature of the structure of the scheme. However, his Honour's conclusion is not inconsistent with the conclusion I have reached which is predicated on an understanding of the contractual foundation for the schemes. 54 What is sought is an enabling order. In my view it is desirable that there be no doubt as to the ability of the liquidator to bring proceedings on behalf of the investors who constituted the syndicates which were the subject of the partnership agreement between Kastabon and Novena. All the proposed order will do procedurally is ensure that no challenge can be made to any proceeding brought by the liquidator on the ground that the entities which were the constituent and contracting entities which brought the schemes into existence are not properly parties to any such proceeding. | winding up of unregistered managed investment schemes application for injunction to restrain rescission of sale contract where injunction not sought in aid of principal cause of action whether separate statutory basis for injunction whether s 601ee(2) empowered court to make orders which affected substantive rights of third parties whether order should be made to entitle liquidator to bring proceedings in name of liquidator on behalf of schemes nature of managed investment scheme corporations |
On 5 November 2009, the Court made an order on the application of the liquidator pursuant to s 596A of the Corporations Act 2001 (Cth) that Mr Johnston attend an examination at 10:15 am on 26 November 2009 before a Registrar of this Court. Mr Johnston was served with the order. However, Mr Johnston did not comply with the order and did not attend the Federal Court at Perth on that day. On the morning of 26 November 2009, and prior to the scheduled commencement time of the examination, the Court received an email letter purporting to be from Mr Johnston seeking to excuse his attendance from the Court hearing. There was annexed to that letter, among other items, a copy of a handwritten note signed by Dr Robert Hugo Mackay dated 23 November 2009. Re Tim Johnson [sic]...is being investigated for cardiac irregularity. He is advised not to fly for the next 2 weeks. The report stated that Dr Adsett had prescribed two medications, "Sotalol hydrochloride" and "Stilnox" tablets to Mr Johnston. The report did not refer to any restriction on Mr Johnston's ability to fly. On 26 November 2009, the Registrar of the Court in Perth adjourned the hearing of the examination to 27 November 2009. On 26 November 2009, the liquidator applied for the issue of a warrant. On 27 November 2009, I issued directions in relation to the liquidator's application for the issue of a warrant for the arrest of Mr Johnston and adjourned the hearing of the examination summons to 2 December 2009. In accordance with directions that I made, affidavits were filed and have been relied upon by Mr Johnston and the liquidator. The affidavits relied upon by Mr Johnston were affidavits from Dr Mackay, Mr Johnston and Dr Adsett. Dr Mackay and Mr Johnston were cross-examined. Dr Adsett was not present in Court but was available to be cross-examined by telephone. However, I excused Dr Adsett from cross-examination as his evidence was of a nature which did not, in my view, warrant the need for cross-examination. The evidence, relevantly, of Dr Mackay, who carries on a general practice in Chevron Island, Gold Coast, was that on 23 November 2009, Mr Johnston presented at his rooms. Mr Johnston explained that he was suffering discomfort in his chest area. I advised Mr Johnston against doing so, as it was my experience as a surgeon in the Royal Australian Air Force that flying causes variations to the normal and ordinary pressures that a patient presenting with a condition similar to that experienced by Mr Johnston may experience and was so contra-indicated. I made the assessment for any patient presenting with the symptoms experienced by Mr Johnston. That is the note referred to at [3] above. This is the note referred to at [4] above. He said that he handed this second "written report" to Mr Johnston who appeared at his surgery unexpectedly on 25 November 2009. Dr Mackay then said that after he had prepared the second "written report", he received from Dr Adsett the report which he had commissioned from Dr Adsett in relation to the cardiac condition of Mr Johnston. Dr Mackay then went on in his affidavit to make other statements about the views that he currently holds but, in my view, they are not relevant to the matters in issue in this case. Mr Johnston deposed that he started searching for documents and information in relation to Firepower matters during the weekend of Saturday, 19 November 2009. He attended the clinic of Dr Mackay to seek an assessment and treatment. Mr Johnston deposed that he explained the "features" that he was experiencing. Mr Johnston said that he did not explain to Dr Mackay at the time the circumstances concerning the various pieces of litigation in which he was involved. Dr Adsett advised him to make an appointment for the following week. The affidavit of Dr Adsett annexed the report of the examination which he had undertaken of Mr Johnston. The important aspect of that report for the resolution of this case is that Dr Adsett made no mention at all of any restriction on Mr Johnston's ability to fly. Mr Johnston advanced two grounds which constituted reasonable cause for him not to attend Court in answer to the examination summons. The first ground was that he had medical advice which precluded him from attending the examination. The second ground was that his personal safety was at risk if he complied with the order. In my view, for the following reasons, there was not a reasonable cause excusing Mr Johnston from attending Court in compliance with the demands of the examination summons. I deal first with the question of whether the medical notes that Mr Johnston received constituted a reasonable cause to fail to comply with the summons. I do not regard the documents signed by Dr Mackay as affording a reasonable cause excusing Mr Johnston from attending Court in compliance with the examination summons on any of the three days on which he has not attended. In my view, the visit by Mr Johnston to Dr Mackay was made for the purpose of procuring the issue of a doctor's note so as to avoid attendance at the examination, whether or not his health condition justified his non-attendance. I say that for the following reasons. First, neither Dr Mackay nor Mr Johnston explained how it came about that Dr Mackay issued a note containing a reference to the restriction on Mr Johnston flying at all. It would have been open to Dr Mackay, assuming that such advice was warranted on medical grounds, for him simply to have given Mr Johnston that advice orally. Secondly, Dr Mackay issued the notes notwithstanding that he had not yet received the report from Dr Adsett to whom he had referred Mr Johnston for an examination and assessment of his cardiac condition. Dr Mackay, therefore, lacked the informed basis as to Mr Johnston's actual cardiac condition, which he himself had commissioned. When the report from Dr Adsett did come in, it placed no restriction on Mr Johnston's ability to fly. There was no satisfactory explanation why it was necessary for Dr Mackay to issue the notes at the time that he issued them, rather than await the report from Dr Adsett. Thirdly, the language of the second note is also curious because it expresses the restriction on Mr Johnston's ability to fly in such blanket and emphatic terms, and also restricts Mr Johnston from flying to a specific period, rather than until such time as more information is available as to his cardiac condition. Fourthly, it was Mr Johnston's evidence that, when he received the note from Dr Mackay, he sent it off to his solicitors. As mentioned, it is to be observed that the report of Dr Adsett did not say anything at all about Mr Johnston's inability to fly. All that the report stated was that Mr Johnston should continue to take the medication which was identified in the report and make another appointment. However, before Dr Adsett's report was even received, Dr Mackay had issued two medical notes to Mr Johnston saying he was not to fly in any circumstances for, in one version, two weeks, and in the other version, three weeks. Dr Mackay did not seek to justify that opinion by reference to any circumstance other than that Mr Johnston was undergoing investigation for a cardiac condition and his experience as a surgeon in the Royal Australian Air Force for a long period of time. Further, Dr Mackay's evidence as to how and why it came to be that the second note was produced at all, and why in that note he altered the restriction on flying from two weeks to three weeks and added the reference to avoiding stressful circumstances, was entirely unconvincing. The same is true of his assertion during cross-examination as to the existence within that document of a treatment plan, or a potential treatment plan. Regrettably, I found the evidence of Dr Mackay to be less than satisfactory. I infer from the circumstances referred to above that Mr Johnston asked Dr Mackay to give him a note which said he was not able to fly for either two or three weeks and that Dr Mackay did so; notwithstanding that he was then awaiting a report as to Mr Johnston's actual cardiac condition, and that he, therefore, had no medically sound basis founded on Mr Johnston's actual condition, upon which to make any responsible assessment as to Mr Johnston's ability to fly or the duration of any such restriction. I entirely reject Dr Mackay's evidence that the content of the notes was medically justified by reason of his experience in the Royal Australian Air Force. It was, on the face of it, a non sequitur that because Mr Johnston was under investigation in respect of a cardiac condition, he would not be able to fly for either two or three weeks (depending on which of Dr Mackay's notes is examined) regardless of what may be revealed as to Mr Johnston's actual condition by Dr Adsett's examination. There are other facts which support the inference that Dr Mackay's notes were procured by Mr Johnston for the purpose of avoiding attendance at the examination, whether or not his actual health condition justified his non-attendance. First, Mr Johnston had not made any arrangements to travel to Perth for the Court examination, prior to the visit to Dr Mackay, on 23 November 2009. Secondly, Mr Johnston made no attempt to investigate alternative means of transport to Perth. There was no attempt made to investigate alternative travel by train or to rearrange the hearing date to accommodate such travel. Thirdly, Mr Johnston did not inform the liquidator immediately of the receipt of the medical note on 23 November, nor did Mr Johnston respond to an approach by the liquidator to consider alternative ways of giving evidence, other than by travelling to Perth, after he belatedly did advise the liquidator of the receipt of the notes. I reject Mr Johnston's evidence that he intended to attend the Court in Perth in answer to the examination summons. This is simply contradicted by the objective facts of not having made any plans to travel to Perth before 23 November, not seeking any alternative transport means and not responding to the liquidator's overtures in relation to alternative means of giving evidence, other than by travelling to Perth. In my view, the medical notes do not afford Mr Johnston the basis upon which reasonably to believe that they constituted a sufficient basis for him not to attend the Court examination in Perth in compliance with the examination summons. Further, it is, in my view, possible that the issuing of the medical notes by Dr Mackay in the circumstances outlined above may constitute unprofessional conduct by Dr Mackay. I will ask the Registrar of this Court to forward the papers and these reasons for decision to the body in Queensland responsible for investigating professional misconduct in the medical profession. As to the personal safety ground, Mr Johnston also referred in his affidavit to reports that his wife and daughter had been visited in their villa in Bali by heavily tattooed and threatening people. Further, Mr Johnston deposed that he had been subject in the past to intimidatory conduct by former business associates of his. The persons in respect of whom the allegations had been made are not before the Court and the allegations cannot be tested. However, it is unnecessary for me to make any findings in relation to any of these allegations because there is no causative link between the threats that Mr Johnston has deposed to and his inability to attend the Court in Perth. There is no evidence of any direct threat of harm to Mr Johnston should he attend the examination in Perth. Mr Johnston's evidence on these matters was vague and no weight can be placed on it. However, more importantly, there was no evidence that Mr Johnston would be denied the protection of the police, should it be required, during his stay in Perth, nor that he believed that he would be denied that protection, if he sought such protection. Accordingly, I find that Mr Johnston did not have reasonable cause for failing to attend Court to answer the summons on each of the three days in question. I note that Mr Johnston has said in his affidavit that if I was to come to the view to which I have come, that he would attend Court in answer to further summonses without the need for a warrant to be issued. I have discretion as to whether to issue a warrant. However, in light of the attempts by Mr Johnston to avoid answering the warrant without reasonable cause, I will not exercise my discretion in his favour. It follows that I will order a warrant be issued for the arrest of Mr Johnston. Further, I reject Mr Johnston's application that the whole of the examination proceeding be transferred from the Western Australian District Registry of this Court to the Queensland District Registry. In my view, the expense and inconvenience that would be visited upon the liquidator attendant upon such an order does not justify the making of the order when weighed against the expense and inconvenience to Mr Johnston. However, in my view, it is desirable that Mr Johnston's examination commence as soon as possible. Therefore, I will order that the examination be adjourned to 4 December 2009 and that a video-link be established to Brisbane so that Mr Johnston can be examined by video-link from Brisbane on 4 December. However, the examination will then be resumed on 8 and 9 December 2009 in Perth and I will require that Mr Johnston attend those two hearings in person. I will consider the question of costs after I have heard further submissions. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | application for warrant for the arrest of a person who failed to comply with order to attend an examination before the court r 11.10 of the federal court (corporations) rules 2000 examinee obtained notes from doctor whether examinee failed to attend examination without reasonable cause. transfer of examination to queensland district registry refused. corporations practice and procedure |
The Tribunal had affirmed a decision of a delegate of the Department of Immigration and Multicultural Affairs, as it was then known, to cancel the appellant's Subclass 573 Higher Education Sector visa. The Tribunal was not joined as a respondent but should have been. An order will be made adding the Tribunal as the Second Respondent. 2 The appellant was born in Hong Kong and is a citizen of the United Kingdom. On 29 September 2005 the Department of Immigration and Citizenship granted the appellant the visa. On 27 January 2006, the appellant's university advised the Department that the appellant had completed his course earlier than anticipated, and that he had not been enrolled in any course since December 2005. The appellant received a "Notice of intention to consider cancellation" and was advised an interview would be held on 6 September 2006. He was invited to attend and to provide comments. The appellant attended an interview conducted by a Departmental officer. The appellant acknowledged that he was not enrolled in a course but stated that he was required to appear in court in several court cases relating to an incident where he was robbed and assaulted and that he was required to undertake an anger management course by court order due to an incident of violence against his girlfriend. 3 The officer did not consider that these events constituted exceptional circumstances pursuant to Regulation 2.43(2)(b) of the Migration Regulations 1994 ("the Regulations ") and found that the appellant had breached condition 8202(2)(a). The officer decided on 6 September 2006 to cancel the visa. The appellant was notified of the decision and his review rights. On 22 September 2006, the appellant applied to the Tribunal for review of the decision. 5 The Tribunal was satisfied that the appellant had not complied with the conditions of the visa because he was not enrolled in a registered course. While the Tribunal accepted that the appellant was required to undertake an anger management course, and give evidence in various court cases, it found that these circumstances did not affect his enrolment as they did not prevent him from enrolling in a registered course. The Tribunal therefore found that these circumstances did not constitute "exceptional circumstances" that would explain his non-compliance, and it affirmed the decision to cancel the appellant's visa. 7 The Federal Magistrate found that the Tribunal applied the correct test under the relevant legislation. His Honour noted that the term "exceptional circumstances" is an ordinary term without specific definitions that the Tribunal could have misapplied. 8 After examining the contents of the psychological report, his Honour found that the Tribunal's failure to refer to the report in detail did not establish jurisdictional error. The Federal Magistrate noted that the report did not indicate that the appellant was suffering PTSD at the time of the report, and did not link the disorder with his failure to study. It was further noted that the appellant's case was not that the trauma was the reason for his failure to study. His Honour found that the Tribunal's findings regarding the absence of exceptional circumstances were open to it on the material before it. 9 His Honour also noted that there was no requirement on the Tribunal to make further enquiries in relation to the report to determine whether there was a link between the appellant's psychological state and his failure to study, particularly where this was not put to the Tribunal. 10 His Honour could find no jurisdictional error and dismissed the application. His Honour awarded costs of $5,000 to the respondent. It was noted that the appellant made no submission in relation to costs, and the amount was the scale fee. The notice of appeal was prepared by the appellant himself. Prior to the hearing of the trial Mr Hans Bokelund of counsel accepted a referral under Order 80 of the Federal Court Rules to represent the appellant on this appeal. The Court is most grateful to him for having accepted this referral. Counsel sought leave at the hearing to substitute an amended notice of appeal for the notice which had originally been filed. Counsel for the Minister did not oppose this course and leave was granted. 12 The amended notice of appeal raised two grounds. It was alleged that the Federal Magistrate had erred in law by making the erroneous finding or reaching the mistaken conclusion that the appellant "had made a conscious decision not to study" and that the learned Federal Magistrate had entered into the merits of the appellant's application by assessing or weighing the evidence contained in a psychological report. An alternative ground that the learned Magistrate had applied an incorrect principle of law in dealing with the question of "exceptional circumstances" under reg 2.43 of the Regulations was not pressed in argument beyond the contention that the Federal Magistrate should have found that the Tribunal had failed to have regard to all relevant circumstances and, in particular, those disclosed in the psychologist's report. 13 Both grounds arise out of the reasons given by the learned Federal Magistrate for rejecting the third ground which had been argued before him in support of the appellant's application for judicial review of the Tribunal's decision. This ground was that the Tribunal had failed properly to consider a psychological report on the appellant. The report was dated 25 August 2006 and had been provided to the Tribunal. The report had been prepared to provide supporting evidence for a claim by the appellant for an award, by the Victorian Crimes Compensation Tribunal, of damages for injuries sustained by the appellant in the course of an assault which had occurred in January 2005. The psychologist had reported that the appellant was "suffering from many symptoms of PTSD, and associated moderate depression and anxiety. " She noted that the appellant was, at the time of her report, "still trying to seek employment. " She hoped that he would be "able to obtain employment soon". She expressed the opinion that, although she had only seen the appellant for the first time on 6 May 2006, he had experienced symptoms of PTSD "for over a year. He also noted that the report, in terms, did not state that the appellant was suffering PTSD on 25 August 2006 when the report was written. The more significant reason for rejecting the claim was, however, that the report did not express any opinion on the impact of PTSD on the appellant's capacity to study. It would be different (sic) to conclude that the tribunal ought to have inferred that this meant that come January and February of the previous year he had necessarily been unable to study. In light of the fact that he had clearly completed his studies a significant period after he had suffered the assault. More significantly, the report does not address the question of the impact of the psychological distress and symptoms of post-traumatic stress disorder upon his capacity to study. In the circumstances, it does not appear to me to be established that the failure to refer to the psychological report in more detail shows a jurisdictional error on the part of the tribunal. Indeed, even if it were established that the applicant was suffering from post-traumatic stress disorder at the relevant time, the applicant still confronts a fundamental difficulty with his case in that he must show facts or circumstances before the tribunal, which would mean that the tribunal were not satisfied that his failure to enrol was not due to exceptional circumstances. The contrary was, it seems, his case before the tribunal; that he had made a decision not to study and pursued other activities in light of the knowledge that he would need to be studying (or at least intending to be studying) in order to have a student visa. This material was before the tribunal. It appears to me that it was open on this material for the tribunal to make the findings that they did relating to the exceptional circumstances point. " (Emphasis added). He had applied to enrol in the course and had been accepted. • He had, nonetheless decided not to accept the offer. This was because the course was due to commence in March 2006 and he wished to return home to Hong Kong for a period which included part of that month. • He had been supported by his parents whilst pursuing his undergraduate degree. His father had since died and his mother had retired. This meant that he could not look to them any longer for financial support. It would, therefore, be necessary for him to work to support himself during a Masters course. • He acknowledged that he needed another type of visa to allow him to work and to secure sponsorship. • He wanted to "half work and half study. 16 In my view this evidence amply supported the Federal Magistrate's observation. The appellant could have commenced a Masters course in March 2006 and chose not to do so. He had made a conscious choice not to study for the reasons which he explained to the Tribunal. The observation is accurate even though the appellant told the Tribunal that, at some unspecified time in the future, he wished to study half time and work half time. More importantly, however, is the fact that it was an observation by the Magistrate. It was not a reason for rejecting the appellant's complaint about the Tribunal's treatment of the psychological report. The critical point was that the report did not contain an opinion that the appellant was disabled, by PTSD, from pursuing his studies. Indeed, it would have been strange had such an opinion been expressed given that the appellant had studied for the whole of the 2005 academic year successfully and finished his course of study six months early despite having been seriously assaulted in January 2005. Whilst the Tribunal was bound to consider relevant material placed before it by the appellant, the psychological report did not provide evidence of his incapacity to pursue his academic studies. The report was prepared for a different purpose and dealt with his capacity to obtain employment rather than his capacity to study. Its contents could not, therefore, assist him in establishing "exceptional circumstances" for the purposes of reg 2.43. It is also notable that the appellant did not suggest to the Tribunal that his PTSD was the cause of his failure to enrol for tertiary studies. He relied rather on the facts that he was required to attend to give evidence at criminal proceedings brought against those who had assaulted him and that he was required to attend an anger management course as a result of his conduct towards his former girlfriend. 17 For the same reasons I do not consider that the Federal Magistrate engaged in any form of merits review when dealing with the psychological report. He did not assess or weigh the report. He merely subjected it to such examination as was necessary to establish that it did not contain any material evidence which had been overlooked or ignored by the Tribunal. 18 The appeal should be dismissed with costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | appeal from federal magistrates court where migration review tribunal ("the tribunal") affirmed the decision to cancel the appellant's higher education sector visa where appellant breached a condition of the visa whether non-compliance was due to "exceptional circumstances" whether the federal magistrate made an erroneous finding whether the federal magistrate entered into a merits review appeal dismissed migration |
Subsequent to that application being made, the steps contemplated by the Extradition Act 1988 (Cth) were undertaken. A variety of challenges have been pursued in this Court by the Applicant seeking to impugn one or other of those steps. 2 It is unnecessary for present purposes to detail the sequence of those various challenges. It is sufficient to note that on 20 December 2007 Gyles J ordered that the Applicant be released from custody: Tervonen v Finland [2007] FCA 2067. 3 On 21 December 2007 an Application was then made by the Republic of Finland to the Duty Judge of this Court for the arrest of the Applicant. That order was made pursuant to s 21(6)(e) of the 1988 Act and an Order For Arrest has since been executed. An Application for bail was refused by Rares J on 24 December 2007. The order then made by his Honour was that the Applicant was to be kept in custody up to and including 15 February 2007: Republic of Finland v Tervonen [2007] FCA 2107. 4 On 15 February 2008 the Full Court of the Federal Court heard an appeal from the decision of Gyles J and an appeal from a further decision concluding that notices issued under s 16 of the 1988 Act were invalid ( Tervonen v Minister for Justice and Customs (No 2) [2007] FCA 1684 , 98 ALD 589). On that date the Full Court extended the orders as previously made by Rares J for a period " up to and including the determination of the appeal from Gyles J . The Respondents to that Application are identified as " Finland " and two magistrates. 6 The Application, together with two further proceedings commenced by the Applicant, were first before the Court on 4 February 2008. On that occasion counsel for the Republic of Finland, Ms Morgan, sought an order that the Application be dismissed. That order was opposed by the Applicant and the proceedings were stood over to today. 7 Bearing in mind that the Applicant has been in custody since July 2006 it is of obvious importance that any application made by him for his release should be heard and determined as expeditiously as possible. 8 The writ of habeas corpus is an important safeguard of liberty: Re Officer in Charge of Cells, ACT Supreme Court; Ex parte Eastman [1994] HCA 36 ; (1994) 123 ALR 478. And, when an application is made, it is the detaining party who bears the onus of showing the lawfulness of the detention: R v Carter; Ex parte Kisch [1934] HCA 50 ; (1934) 52 CLR 221 at 227. Every person is presumed entitled to his freedom unless some reason is made to appear to the satisfaction of a court why he is lawfully deprived of that freedom: R v Governor of Metropolitan Gaol; Ex parte Di Nardo [1963] VR 61 at 62 per Sholl J, (1962) 3 FLR 271. See also Clark and McCoy, Habeas Corpus: Australia, New Zealand, the South Pacific (2000) 227---8. 9 There are at least two reasons, however, why the present Application should be dismissed. 10 First, the writ is to be directed to those who have custody or control of the person detained: Hicks v Ruddock [2007] FCA 299 at [36] ---[50], [2007] FCA 299 ; 156 FCR 574 at 588---91. Justice Tamberlin there held that " control or custody is an essential element to the issue of the writ ": at [36]. In the present proceedings, neither the Republic of Finland nor the magistrates are such persons. 11 This difficulty could be overcome by the Applicant seeking a writ or an order in the nature of a writ directed to the appropriate Respondent. And this may be the reason why counsel for the First Respondent did not today rely upon this difficulty as the basis upon which she sought an order for the dismissal of the Application. The Applicant has the benefit of a presumption in favour of liberty. Albeit not the person who has the custody or control of the Applicant, the Republic of Finland has tendered a copy of the O rder For Arrest as made on 21 December 2007; a copy of the order made by Rares J on 24 December 2007; and a copy of the order made by the Full Court on 15 February 2008. The lawfulness of the detention of the Applicant is thereby established. There is nothing at all in the material before me which provides an arguable basis for a finding that the order made by any of the learned magistrates was vitiated by absence or excess of jurisdiction or is otherwise void. 13 The Application for the writ therefore fails. The Application be dismissed. 2. The Applicant to pay the costs of the First Respondent. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | habeas corpus application not addressed to person with custody or control of applicant onus to establish lawfulness of detention extradition |
He arrived in Australia on 25 December 2002. On 14 January 2003 the applicant applied for a protection (class XA) visa. On 18 June 2003 a delegate of the Minister for Immigration and Multicultural Affairs (as he was then) refused to grant the applicant a protection (class XA) visa ("delegate's decision"). On 7 July 2003 the applicant applied to the Refugee Review Tribunal for review of the delegate's decision. On 5 May 2004 the applicant gave oral evidence at a Tribunal hearing. On 3 March 2005 the Tribunal made a decision affirming the delegate's decision. On 23 March 2006 Federal Magistrate Lloyd-Jones made orders by consent remitting the matter to the Tribunal. On 24 May 2006 the Tribunal, as reconstituted, sent a letter, by facsimile, inviting the applicant to attend a hearing. On 26 May 2006 the Tribunal received a "Response to Hearing Invitation" form indicating that the applicant would attend the hearing. On 8 June 2006 a differently constituted Tribunal held its hearing which the applicant attended and gave oral evidence. The account of the evidence given by the applicant at the 5 May 2004 hearing contained in the decision of the previous member was, without objection by the applicant, treated as accurate. On 26 July 2006 the Tribunal, as reconstituted, made its decision affirming the delegate's decision to refuse to grant the applicant a protection (class XA) visa. On 15 August 2006 the Tribunal handed down its decision. On 29 August 2006 the applicant filed an application for judicial review in the Federal Magistrates Court. On 27 October 2006 the matter was listed for a show cause hearing: rule 44.12(1) of the Federal Magistrates Court Rules . The Federal Magistrate dismissed the applicant's application as "it fails to disclose an arguable case of jurisdictional error". This was a dismissal under rule 44.12(1)(a) and by virtue of rule 44.12(2) was interlocutory. On 13 November 2006 the applicant filed an application for leave to appeal from Federal Magistrate Driver's judgment. The appellant claimed he was elected team leader of the Falun Gong tutorial centre and promoted Falun Gong in his spare time as well as participating in a "sit-in" in Beijing. The appellant claimed that police attended his work place asking him to provide a statement he would not practise Falun Gong. The appellant asserted that he refused and was dismissed from his employment. The appellant claims he continued to practise Falun Gong in secret and that police attended the house of a fellow Falun Gong practitioner while the appellant was there practising Falun Gong and arrested the appellant and his friend: both being subsequently sentenced to a labour camp for one year and two years respectively. After his release the appellant claims that his new employer was requested to "watch the appellant" to see if he continued to practise Falun Gong. The appellant claims he considered departing the PRC. The appellant claimed that he feared that he would be gaoled for his Falun Gong practice if he returned to the PRC. The appellant claimed that in Australia he had practised Falun Gong and written an article about how he joined Falun Gong for a newspaper called "The Truth", a Falun Gong journal. 3 In support of his claims the appellant included an article said to have been written by him in Chinese and published in "Truth", a Falun Gong journal in Australia, a letter from his local police station outlining the appellant's practise of Falun Gong, an article from a Falun Gong website outlining the arrest of the appellant's friend, a bank receipt showing the appellant had sent money to the wife of his friend who had been sentenced to two years imprisonment and photographs of him practising Falun Gong and distributing Falun Gong material in Australia. The Tribunal was left with a very strong impression that the appellant was not speaking from actual personal experience. There were many inconsistencies between the written claims before the Tribunal and his oral evidence which were unable to be explained at hearing. The Tribunal found that the evidence of the appellant with regard to the protest in 1999 was inconsistent with independent country information. The Tribunal concluded that the appellant was not a credible witness and accordingly did not give any weight to the appellant's supposed corroborative evidence. Moreover, the Tribunal was satisfied that the appellant's Falun Gong activities in Australia was conduct engaged in for the sole purpose of strengthening his refugee claims and disregarded it for that reason: see s 91R(3) of the Migration Act 1958 (Cth) ("the Act "). He did not take up that opportunity. 7 The Federal Magistrate found that the show cause application failed to disclose an arguable case of jurisdictional error and nor was any jurisdictional error apparent from the available material before him. It is convenient to set out the Federal Magistrate's reasons relevant to these grounds. I invited the applicant to explain those grounds in his oral submissions. He was not able to do so apart from making claims of interpretation problems at the hearing. There are several difficulties with that assertion. The first is that there is no mention of interpretation difficulties in the show cause application or its supporting affidavit. The second is that the applicant has not taken up the opportunity I gave him to produce a transcript which might, hypothetically, have supported the assertion. The third is that the record of the Tribunal decision does not provide any support to the allegation of interpretation difficulties. The record of the Tribunal decision does establish clearly that the applicant failed before the Tribunal because he was not believed. After listening to the applicant's evidence at the hearing, the presiding member was left in a state of complete disbelief. It is apparent that the presiding member considered that the well was poisoned and he would not continue to drink from it. The presiding member thus gave no weight to a letter which might have corroborated some of the applicant's claims, see court book page 126. Having regard to the force of the adverse credibility finding made by the Tribunal, I see no error in that approach. The show cause application asserts a breach of the rules of natural justice. To the extent that the particulars throw any light on that assertion, they appear to relate to a failure to consider the applicant's claims in their proper context. The applicant was not able to explain this assertion further. It appears to me from the record of the Tribunal decision that the presiding member both understood the applicant's claims and considered them. Secondly, the show cause application asserts a failure to observe procedures required by law. It appears to me from the record of the Tribunal decision that the Tribunal met its statutory obligations under the Migration Act 1958 (Cth) ("the Migration Act "). In my view, this ground is not arguable. Thirdly, the show cause application asserts that the making of the decision was an improper exercise of the power conferred by the Migration Act . The asserted particular appears to be an allegation that the Tribunal limited itself to a consideration of unfavourable evidence. In one sense, that is true. The decision turns entirely on the evidence given by the applicant at the hearing conducted by the Tribunal. The presiding member found that evidence to be wholly unfavourable. Where a decision-maker is left in a state of complete disbelief after hearing from an applicant, that is in my view a sufficient basis to dispose of an application. I conclude that the show cause application fails to disclose an arguable case of jurisdictional error. Neither is any arguable claim of jurisdictional error apparent to me from the available material. I will therefore order that the application be dismissed pursuant to rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). It is to be treated, in the circumstances as a draft notice of appeal. The first respondent was content for the Court to follow this course. The notice of appeal raises the following grounds which are, in effect, a repetition of the grounds before the Federal Magistrate. The Tribunal did not comply with s424A & s 441A of the Migration Act 1958 . The Tribunal breached the rules of natural justice in connection with the making of the decision. The respondents denied the applicant natural justice by not considering the context in which the applicant will face persecution and serious harm for being a Falun Gong practitioner in China. The making of the decision was an improper exercise of power conferred by the enactment in pursuance of which it was purported to be made. The respondents have no considered the amount of evidences which are in favour of the applicant. The respondents regards all the evidences as produced for the sole purpose of strengthening the applicant's refugee claim. They have only considered the evidence which is not in favour of the applicant. None of these grounds, in my opinion, discloses any jurisdictional error on the part of the learned Federal Magistrate. It was well open to his Honour to exercise his discretion pursuant to r 44.12(1)(a) and to dismiss the application without it going to a final hearing. My reasons, which follow, essentially reflect the submissions put by the first respondent. 11 The test for whether leave to appeal is granted or refused is well established: Décor Corp v Dart Industries Inc (1991) 3 FCR 397 at [9]. 12 The applicant's grounds contained in his notice of appeal do not identify any error in the Federal Magistrate's decision. Rather, the grounds are directed to the decision of the Tribunal. 13 The applicant alleges that the Tribunal failed to comply with sections 424A and 441A of the Act . This ground is unparticularised. The Tribunal as first constituted wrote to the applicant inviting his comment on two occasions. The Tribunal was not required to write to the applicant, as reconstituted, in respect of any information upon which it relied as its findings relied on the applicant's evidence given to the Tribunal, both as originally constituted and as reconstituted and the documents provided by the applicant to the Tribunal. Accordingly, there is no merit to this ground. 14 At the hearing before me the applicant emphasised that he had not had a fair hearing before the Tribunal because he was denied the opportunity of putting on important additional evidence. 15 When I asked him about the orders which the Federal Magistrate had made on 12 September 2006 for the filing by 17 October 2006 of additional material including further affidavit evidence including a transcript of the Tribunal hearing he said that he knew that he had to provide further evidence by 17 October but thought that the pro bono legal adviser would attend to this. 16 The applicant was present before the Federal Magistrate, assisted, he told me, by an interpreter. No such explanation was given to the Federal Magistrate. His Honour did state however that the applicant did not act on the opportunities provided by the orders of 12 September 2006. 17 The applicant's second ground relates to a purported breach of the rules of natural justice by the Tribunal in not considering the context in which the applicant would have faced persecution and serious harm by reason of being a Falun Gong practitioner in China. Section 422B of the Act excludes the common law rules of natural justice. Insofar as the applicant alleges that the Tribunal failed to consider the applicant's refugee claims, it is clear that this is not the case. The Tribunal considered and rejected the applicant's claims that he feared persecution in China by reason of his practice of Falun Gong. 18 The third ground alleges that the "making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made". This is a generic, unparticularised ground. It is without substance. 19 The fourth ground alleges that the Tribunal failed to consider evidence in favour of the applicant and that it only considered evidence which was not in favour of the applicant. To the extent that this is an allegation of bias the applicant has not met the requirement that such an allegation be firmly and distinctly made and clearly proved: Minister for Immigration & Multicultural Affairs v Jia Le Geng [2001] HCA 17 ; (2001) 205 CLR 507 at [530] . 20 To the extent that the Tribunal, upon considering the evidence as a whole (which it expressly stated it had done) gave no weight to evidence on its face favourable to the applicant it did so because it found the applicant not to be a credible witness. No error and in particular no jurisdictional error arises by reason of that approach which was clearly open to it. 21 Accordingly I am of the opinion that the Federal Magistrate's decision is not attended by sufficient doubt to warrant it being reconsidered by the Federal Court. Whilst the applicant disagrees with the decision below he has been unable to point to any relevant error. It is evident that no substantial injustice would result from my refusal of leave. 22 Accordingly, the application for leave to appeal ought be dismissed with costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | application for leave to appeal from 'show cause' dismissal by federal magistrate under r 44.12(1)(a) federal magistrates court rules whether failure to comply with the migration act 1958 (cth) ss 424a and 441a whether breach of natural justice whether improper exercise of power whether failure to consider evidence favourable to applicant whether bias. migration |
4 The background to the matter is this. The appellant is 34 years old, male and single. The appellant claimed before the Tribunal to be a Chinese born citizen born in Beijing on 3 August 1972. He gave his occupation as an aquatic farmer and travelled on a valid Chinese passport issued on 26 August 2004 in Beijing. He previously travelled using the same passport as a tourist to Hungary on 20 July 2005 and returned to China on 31 July 2005. He arrived in Australia travelling on the same passport. He was issued with an Australian visitor visa on 26 April 2006. The Tribunal noted that the departmental records before it noted that the tourist visa 'applicant' was married and employed as Vice-Director of the Beijing Intelligence Exchange Association . 5 The Departmental records noted that the photograph used for the visa application was not that of the person who appeared in the applicant's passport being the person making a claim for a protection visa. In relation to the claims, the applicant before the Tribunal claimed in his statement attached to his protection visa application that he is an aquatic farmer and made a stand against local government officials as a result of which he could not live in the People's Republic of China any longer with safety. The appellant had claimed that in 1989 he commenced fish farming with a contract from the Mentougou Town Council which gave him 20 years of guaranteed rights to fish particular ponds. 6 In February 1991, the appellant built his own business and began aquaculture to grow eels. He borrowed money for that purpose and ran a business. In January 2005, the appellant claimed he was informed that the land allocated to him for eel breeding was to be withdrawn and used to build a power station. Apparently, many other farmers faced the same situation. They sought compensation according to particular government rules about that matter and were willing to support the new power station project. However, apparently, it transpired that the local authorities were not prepared to offer compensation at the levels thought appropriate as a result of which the present appellant descended into controversy with authorities about that matter. 7 The appellant saw the proposed compensation offer as unfair and demanded that steps be taken to increase the compensation offer. Those matters degenerated further with the result that the matter could not be resolved. Two months after some of these events during July, approximately on 20 September 2005, the appellant, with others, was asked to attend a meeting about these compensation questions. That delegation was offered certain further moneys which proved to be unacceptable and then apparently, threats were made by authorities that the police would be called to deal with the matter. Some of these individuals were detained in the local police station for the day and later transferred to a detention camp on 22 September 2005. 8 Apparently later, on 29 September 2005, the appellant was sentenced to six months' labour reform without his case ever being heard before a Court. While in the detention camp, the appellant claimed that he was tortured. All of these matters that I have just recited are claims made by the applicant before the Tribunal, both in papers and in an appearance before the Tribunal. In the course of dealing with these matters, the Tribunal sought further information from the appellant and on 11 September 2006, the Tribunal sent such a letter for the purposes of s 424A of the Migration Act to the appellant. That letter sought information in relation to the appellant's claim to be a single aquatic farmer specialising in eel breeding from 1989 to 2005. The letter was the subject of a response from the appellant on 26 September 2006. 9 In the course of that response, the appellant said that he had lost trust in the Chinese government and gave further details about his concerns about returning to China. On 23 November 2006, the Tribunal sent a further letter for the purposes of s 424A of the Migration Act in similar terms to the previous letter. However, no response was received to that letter. The appellant gave evidence before the Tribunal. In the course of the Tribunal's reasons, in addressing its concerns and weighing the various claims against the evidence, the Tribunal had regard to the appellant's travel in Europe in July/August 2005; the various claims made in relation to eel farming over the period of time; the appellant's knowledge of the Mentougou District, its rivers, facilities, assets; aspects of the proposal in relation to the proposed power station; and evidence in relation to the detention claims. 10 Having considered each of those topics, the Tribunal then made findings and it would be appropriate to record some of these. Clearly, the applicant cannot be both a Vice-Director of the Beijing Intelligence Exchange and married as claimed when he applied for a tourist visa to visit Australia and an unmarried eel farmer as claimed in his protection visa application. The Tribunal gave the applicant every opportunity at his hearing and later through the s 424A process to explain his identity to the satisfaction of the Tribunal. However, his response to the Tribunal's s 424A letter provided no additional information on which it could rely in making its decision. He did not specifically wish to come to Australia. The Tribunal formed the impression that he did not appear to care whether or not the information in the visa application was accurate. Consequently, the Tribunal is not satisfied that the applicant is a credible witness. Nor does the Tribunal accept that upon his return to China the applicant will be at risk of being persecuted for his perceived political views or for wanting to seek compensation through the Chinese legal system, now, or in the foreseeable future. The appellant describes the basis for his challenge to the orders of Federal Magistrate Scarlett in these terms. The appellant says that he was not given a fair go. The appellant says that he has a civil case in China and that he wants protection in Australia because he does not know what will happen to him should he return to China. His concern in relation to the civil case is that he continues to challenge the acquisition of the land upon which the aquaculture venture was conducted; that he has invested $1 million in Australian dollars in that venture and has now lost the land and investment; and should he return to China and persist with that civil proceeding and press those entitlements, as he perceives them, he will be subjected to pressure and persecution. 15 On that footing, the appellant says he has a well-founded fear of persecution for a Convention reason. In addition, the appellant says that the decision of the Tribunal was reached before the hearing was conducted, which goes to the bias allegation. Further, the appellant says that there is an error of law. The appellant also makes a number of further observations in relation to some of these matters addressed by the Tribunal. As to the two letters sent pursuant to s 424A(1) , the appellant accepts that he received the first letter and responded to it through the mechanism of a friend who wrote a response. As to the second letter, the appellant did receive that letter but no longer had the support of his friend; didn't understand the letter; and was not able to write a response to it. As to the tourist visa application and the inconsistency with the protection visa application, the appellant says that an agent organised the tourist visa and, in effect says, that he ought not to be held accountable for that inconsistency. As to the hearing before the Tribunal, the appellant says that he was advised by the Tribunal member that the case in China had nothing to do with these proceedings. The appellant also says that the Tribunal member told him that the case, which I assume to mean again the civil case in China, did not constitute a basis for a well-founded fear of persecution for a Convention reason, before the Tribunal. 16 The appellant says that he cannot understand why he is not a 'refugee' as his land has been taken from him and, in effect, he is a displaced person. A lot of these matters, of course, go to the underlying factual questions and the issue for this Court is whether there is a demonstrated error on the part of the Federal Magistrate in dealing with the application before his Honour. In relation to the grounds of appeal which are said to demonstrate an error of law, the first is the contention that the Tribunal made a decision before conducting a hearing and was therefore biased. In relation to bias, French J in Jia v Minister for Immigration and Multicultural Affairs (1998) 84 FCR 87, observed that bias must be a pre-existing state of mind which disables the decision-maker from undertaking or renders him unwilling to undertake any or any proper evaluation of the materials before him or her which are relevant to the decision to be made. 17 That view of the threshold for establishing bias was adopted by the Full Court of this Court per Spender, Cooper and Nicholson JJ in Jia v Minister for Immigration and Multicultural Affairs [1999] FCA 951 ; (1999) 93 FCR 556, with all members adopting the view of French J and that view of the Full Court was regarded by the High Court in Minister for Immigration and Multicultural Affairs v Jia [2001] HCA 17 ; (2001) 205 CLR 507 as orthodoxy. At [72], their Honours Gleeson CJ and Gummow J observed that the views expressed by the Full Court and by French J accord with the decisions of the High Court in Laws v Australian Broadcasting Tribunal [1990] HCA 31 ; (1990) 170 CLR 70 at 91, and Johnson v Johnson [2000] HCA 48 ; (2000) 201 CLR 488. 18 Moreover, no inference of bias can simply be drawn from the fact that the Tribunal has reached conclusions which are adverse to the appellant, and as Lockhart J observed in Singh v Minister for Immigration and Ethnic Affairs (1996) FCA 902 at 9, any contention of bias must be assessed against all the facts and circumstances of the whole case. Examining the facts and circumstances of the whole case, it seems to me clear enough that there is no demonstrated actual or apprehended bias. In the course of submissions this afternoon, the appellant made observations which are very similar to those made at [16], [17] and [18] of the reasons of Federal Magistrate Scarlett. 19 Those observations of the appellant before his Honour were made as oral submissions and were not supported by any evidence. Before this Court, similar contentions are made in oral submissions but they too are not supported by evidence and certainly fall well short of any satisfactory material in support of a contention of bias. Accordingly, I am not satisfied that the first ground is made out. The second ground is that the decision of the Tribunal involved an error of law. The difficulty for the appellant, as it seems to me, in supporting that ground is that a large part of the submissions go to factual matters. The proper analysis of the Tribunal's process of reasoning; its analysis of the claims; the subject matter which attracted quite detailed analysis; and the findings, were all comprehensively addressed in the written reasons. 20 The particular concern in relation to the obvious difficulty for the Tribunal that an application for a tourist visa had been made on a fundamentally different footing from the application for a protection visa (that is, the identity issue) was addressed through the mechanism of the s 424A letters, of which there were two and an assessment of the evidence before the Tribunal. 21 It cannot be contended with any force that the Tribunal has not sought to get to the bottom of the claims; the strengths and weaknesses of the contentions surrounding those claims; and nor can it be contended that it was not open to the Tribunal to reach a conclusion that in the face of the matters identified by the Tribunal, there was a basis for reaching an adverse finding on credit. The Tribunal was entitled to act as it did and was entitled to accept or reject the claims. 22 That being so, the second ground of appeal fails. 23 The third ground of appeal is that the Tribunal ignored the truth of the matter, namely, the fact that the appellant would be in danger should he return to the People's Republic of China. Of course, that contention falls away once the Tribunal reaches the conclusion that it cannot accept the claims of the appellant as being truthful, frank and correct. The conclusion that the Tribunal cannot be satisfied that the appellant has a well-founded fear of persecution for a Convention reasons naturally flows from the conclusions reached on the primary factual matters as to credit. 24 One further matter requires to be addressed and it is this. The appellant appeared today on his own behalf and was assisted by an interpreter and helpfully, I might say, assisted by the interpreter. It became apparent during the course of some of the argument that the appellant was referring to the Court Book which was the Court Book from the proceedings before Federal Magistrate Scarlett, rather than the Appeal Book for these proceedings. Exhibit 1 is a letter written by the solicitors on behalf of the respondents by which a copy of the Appeal Book was sent to the appellant on 31 August 2007 to the address nominated by the appellant in the notice of appeal which is the same address to which other correspondence has been addressed by the respondents. 25 In fact, a letter dated 30 October 2007 was presented to me by the appellant which demonstrates that the appellant received the outline of submissions from the respondents at the same address. I raised the question of whether or not the appellant was disadvantaged by not having the Appeal Book before him today. However, it should be noted that the only difference between the Court Book and the Appeal Book is that the Appeal Book contains a copy of the reasons of Federal Magistrate Scarlett which were delivered ex tempore (and the appellant was present for the ex tempore reasons); and secondly, a copy of the notice of appeal which, of course, in any event, is the appellant's document. A copy of the Appeal Book was made available to the appellant in the course of argument. 26 It seems to me that because the Appeal Book and the Court Book are otherwise identical, the appellant is not disadvantaged by having reference to the Court Book in preparation. Notwithstanding that, it would seem that the appellant was provided with the Appeal Book in any event. It follows from what I have said therefore that there is no demonstrated error of law on the part of Federal Magistrate Scarlett. 27 What necessarily follows is that the appeal must be dismissed with costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of grounds of appeal from a decision of the federal magistrates court raising questions of contended bias; a contended failure on the part of the refugee review tribunal to have regard to s 424a(1) of the migration act 1958 (cth); and whether a factual foundation subsisted for findings of credit adverse to the appellant, by the tribunal migration |
The HofA related to the development and construction of what became known as Stages 3, 3A and 4 of the Erskine Resort development in Lorne, Victoria ("the Erskine on the Beach Project"). 2 Latitude was a property developer with particular expertise in the construction and development of tourist apartment blocks. It did not manage the properties it constructed. On the other hand, BreakFree specialized in management, not development, of resorts. It was to be the perfect match. However, on 31 August 2004, BreakFree ultimately sought to 'break free' from Latitude in relation to the development and construction of the Erskine on the Beach Project by purporting to terminate the HofA on the basis that a condition precedent in the HofA had not been satisfied. The condition precedent required BreakFree to procure the payment of 10% of the purchase price from at least 65% of the purchasers of off-the-plan apartments in Stages 3 and 3A: cl 2.1.5 read with cl 10.2 of the HofA. If the condition precedent in cl 2.1.5 was not satisfied or fulfilled by 30 August 2004 or such other date as the parties agreed in writing, either party was entitled to terminate the HofA by notice in writing to the other party, provided it had complied with its obligations under the HofA ("the Deposits Condition Precedent"). 3 The central issue arises out of the fact that, on 31 August 2004, BreakFree purported to terminate the HofA for want of compliance with the Deposits Condition Precedent and, on 22 September 2004, Latitude said that conduct was repudiatory and accepted that repudiation. Those events, about which there is no substantial dispute, were characterised in a variety of ways, not all of which were distinct and separate. 4 Latitude submitted that BreakFree's conduct was repudiatory because the negotiations between the parties had proceeded to the point where the terms and conditions of the HofA that then bound them did not include the Deposits Condition Precedent. This latter argument was characterised in the submissions as arising because of a variation to the HofA and was described by Latitude as the 'Waiver Issue'. As these reasons will later demonstrate, applying terms like "waiver", "variation" or "new contract" tends to mask the central question which falls for determination which is whether, at the time of purported termination, it was a stipulation of any agreement between the parties that either should be entitled to terminate the relationship between them if by 30 August 2004, and despite their best endeavours, the Deposits Condition Precedent had not been satisfied. 5 The 'Waiver Issue' was also characterised by Latitude as a representation giving rise to liability under the Trade Practices Act 1974 (Cth) ("the TPA") (described in Section C(5) below as the 'Waiver Representation'). In addition to characterising BreakFree's conduct relating to the Deposits Condition Precedent in this way, and asserting that BreakFree's purported termination of the HofA on that basis was wrongful, Latitude submitted that BreakFree's other conduct amounted to a repudiation of the HofA and that it had accepted that repudiatory conduct. I will address the substance of this complaint in further detail below. 6 This principal issue in this case concerns whether, consistent with the terms of the HofA, BreakFree was entitled to terminate the HofA and then seek to develop and construct the Erskine on the Beach Project. In my opinion, for the reasons that follow, BreakFree was not entitled to terminate the HofA as it did or at all. 7 It is as well to set out a detailed chronology of the communications between the parties as I find them to have occurred. Much of what is set out below was not in dispute to any significant extent. To the extent that the facts were in dispute, I have generally preferred the account which accords with the contemporaneous record revealed in the email, correspondence and other notes admitted in evidence. B. Erskine House Pty Ltd was independent of BreakFree and Latitude. The Crown Lease was for a term of 50 years. It commenced on 9 June 2000: cl 1.1 of the Crown Lease. With effect from 15 June 2004, the Crown Lease was assigned by Erskine House Pty Ltd to BreakFree. Under the Crown Lease, Erskine House Pty Ltd (and on assignment, BreakFree) was entitled to sub-let the whole or any part of the site: cl 13. It was also entitled, at its cost, to construct the 'Accommodation Facility' on the site. The 'Accommodation Facility' was in fact a series of accommodation buildings, conference facilities and associated developments. 9 The project to construct the 'Accommodation Facility' was named "Erskine on the Beach". The Erskine on the Beach Project was a staged development. Construction of Stage 1 was completed in 2001. Stage 2 was completed in 2002. Stages 3, 4 and 5 remained to be built. (These stages were subsequently renumbered 3, 3A and 4). By January 2003, the Stage 1 and Stage 2 apartments had been sold. From December 2003, what became known as Stage 3 and 3A apartments were being marketed "off the plan" and sold. These proceedings concern the development of Stages 3, 3A and 4 of the Erskine on the Beach Project. It did not manage the properties it developed. BreakFree was not a developer. It was a manager of resorts. 11 On 22 March 2004, Thompson met Anthony Kevin Smith, the Third Respondent and a director of BreakFree ("Smith"), at BreakFree's offices in Surfer's Paradise to discuss tourist apartment block projects in the Byron Bay region which Latitude had constructed and over which BreakFree either had management rights or was looking to acquire management rights. It was during the course of this meeting that Smith asked Thompson whether he was interested in looking at the Erskine on the Beach Project. Smith explained to Thompson that BreakFree had recently purchased the development and management rights to that project. Later in these reasons, it will be necessary to return to consider BreakFree's purchase of the development and management rights to the Erskine on the Beach Project. For present purposes, it is sufficient to note that as at 22 March 2004, the Share and Asset Sale Agreement ("the SAS Agreement") by which BreakFree ultimately effected the purchase of the development and management rights to the Erskine on the Beach Project had not been executed. 12 Smith told Thompson that the Erskine on the Beach Project was staged; that the first two stages consisted of 6 identical buildings which had already been built; that what would become Stages 3, 3A and 4 remained to be built and in respect of the apartments in Stages 3 and 3A, $30 million out of a total of $35.5 million had been sold off the plan with all purchasers having made a $5,000 deposit on the purchase price with the deposits to be topped up to 10% of the purchase price. (This was the subject matter of the Deposits Condition Precedent). 13 Smith invited Mark Patrick Frawley ("Frawley"), the Fourth Respondent and the Executive Director/Business Planning and Development of BreakFree, to join the meeting. Frawley provided Thompson with a spreadsheet setting out the basic financial details for Stages 3 and 3A of the Erskine on the Beach Project: 64 dual key apartments; total pre-sales of $29,800,000.00; an additional $4.7 million in uncontracted apartments still to be sold and a development profit estimated at $8,232,600.00. 14 Thompson was told that if Latitude was interested it could purchase the development rights to Stages 3 and 3A of the Erskine on the Beach Project and that there were two finance options available. BreakFree would offer Latitude vendor finance to purchase all 64 apartments or Latitude could finance the purchase of the apartments itself. Thompson told Smith and Frawley that as Latitude was considering a project in the south island of New Zealand, Latitude could only consider vendor finance. Latitude's ability to finance the purchase of the development rights and BreakFree's knowledge of that fact will become relevant later. 15 After the meeting, Frawley provided further information to Thompson about the Erskine on the Beach Project. The two areas on first glance of concern are, firstly the deposit position of the contracts. Does the top [up] have to occur after construction starts or when contracts are signed? Tony mentioned the funds for land wouldn't have to come in until settlements if that is correct, then that is [a] major issue out of the way. Basically we will move forward in our own right as discussed due to tight timeframe. If you come into the transaction well and good but it will need to be before we get finance approved for construction . I have spoke [sic] to the builder I mentioned from Ballarat. They were the under bidder on a $20m job at the Geelong AFL stadium in December so have the capacity to build. They suggest a 4 week tender period would be sufficient once they have working drawings. This offer is open until BreakFree has had finance approved then it will continue development in its own right. Thompson created his own cash flow analysis and arrived at a profit of only about $2.9 million. On 7 April 2004, he sent a copy of his analysis to Frawley. Thompson's covering email raised a number of issues he had with the project. Later, on 7 April 2004, Frawley responded by pointing out that there was no stamp duty on the sub-leases for the land and that he would go through the spreadsheet in more detail over the next couple of days and send Thompson his comments. Although the HofA were not yet executed, Frawley and Thompson spent time analysing the project and identifying costs savings. Under the SAS Agreement, BreakFree became entitled to be substituted as 'substitute vendor' under contracts of sale entered into by BRD as vendor in respect of the sales of apartments in Stages 3 and 3A 'off the plan'. 23 On 15 April 2004, Frawley sent to Thompson a document which he described as containing " the starting terms of our proposed heads of agreement ". The document was not dissimilar to that which Frawley had provided to Thompson on 25 March 2004 referred to in [18] above. This offer is open until BreakFree has finance approved at which time it will continue development in its own right. Thompson made two significant additions and two significant deletions to the document provided to him by Frawley. First, he added a requirement that BreakFree be responsible for the topping up of contract deposits to 10% and that BreakFree endeavour to extend the sunset dates on certain contracts to be nominated at a later date. Secondly, he deleted the condition allowing BreakFree to develop the project itself if the construction schedule could not be met and he deleted the proposed term limiting the period of the offer to develop the project up until the time that BreakFree was given finance approval. 25 Later that morning, after receiving Thompson's email, an amended document said to set out the basis of the agreement between Latitude and BreakFree was sent by Frawley to his solicitors and copied to Thompson. Both the significant amendments and deletions proposed by Thompson had been adopted. 26 Middletons (Latitude's solicitors) received the first draft of the HofA on 23 April 2004. 28 On 13 May 2004, Thompson, Frawley and Smith met at BreakFree's offices and discussed the "Surfer's Paradise" project and the Erskine on the Beach Project. The fact of the meeting was not in dispute. The dispute concerned what was said at the meeting. Thompson recalled Frawley and Smith confirming that BreakFree was not interested in undertaking development responsibility of either project on the basis that Frawley and Smith considered development to be disadvantageous because of its adverse impact on BreakFree's share price. Thompson recalled Smith specifically raising the concern about BreakFree not wanting to be seen as 'developers in the marketplace' . On the other hand, Smith and Frawley were adamant that the conversation was primarily concerned with the details of the proposed HofA which was executed the following day. What those details were was never made clear or explained. Frawley also said that he told Thompson that "Breakfree Ltd was still proceeding on the assumption that it would be completing the Erskine Resort development itself" and that he was " proceeding with the tender process for the Erskine Resort development and the finalisation of working drawings to get construction tender documents out as soon as possible" . 29 On 14 May 2004, the HofA were executed by BreakFree, Latitude and Thompson. Under the HofA, Latitude agreed to acquire the Developer's Assets being only part of the assets that BreakFree had recently agreed to acquire from BRD under the SAS Agreement. The purchase price payable by Latitude to BreakFree was $85,000 per apartment. There were 64 apartments in Stages 3 and 3A totalling $5,440,000. $3 million was payable by 30 June 2005 and $2,440,000 was payable by 30 June 2006. BreakFree retained the management rights at all times. 30 The recitals to the HofA recorded, separately, BreakFree's purchase of the three categories of assets under the SAS Agreement, that Latitude wished to purchase the 'Developer's Assets' (being the right to develop and construct and sell the Stages 3 and 3A Apartments) and that BreakFree had agreed to sell those assets to Latitude. Finally, the recitals to the HofA recorded, as was the fact, that the parties had entered the HofA to record the agreements that they had made to give effect to their common intentions. At that stage, the parties did have common intentions. Latitude was to construct and develop Stages 3 and 3A and BreakFree was to manage the apartments once they were constructed. BreakFree will use its best endeavours to procure payment of any differential sum outstanding from at least 65% (Target) of the purchasers of the Stages 3 and 3A Apartments by 31 July 2004 and will immediately report to Latitude the number of deposits that have been fully paid or otherwise under the Contracts of Sale on this date or upon receiving a written request from Latitude to provide this information. The first was due within 7 days of execution of the HofA ("the First Bank Guarantee"). The second and third were required by the later of 7 days after completion of the SAS Agreement (which occurred on 15 June 2004) and 30 August 2004. 34 After 14 May 2004, the terms of the HofA were varied a number of times. The first variation came just 4 days later on 18 May 2004 when Latitude requested an extension of time to deposit the First Bank Guarantee under cl 7.1 of the HofA. BreakFree agreed. The First Bank Guarantee was ultimately deposited by Latitude on 26 May 2004. Receipt was confirmed by Frawley on the following day. 36 On 28 June 2004, only 3 and a half weeks after granting BreakFree the extension of time to 15 July 2004 to collect the deposits for the apartments that had been sold, Thompson attended a lunch meeting with Smith, Frawley and Frawley's father in Byron Bay. A number of matters were discussed: the slow uptake in purchasers paying the balance of the deposit due on the apartments they had contracted to purchase; Latitude's target figure for the balance of the deposits due on the sale of apartments and the issue of Latitude's ability to raise finance. 37 The BreakFree representatives explained to Thompson the reason for the slow uptake in the payment of the deposits for the apartments was that BCR and BRD (the vendors under the SAS Agreement) had not permitted BreakFree to make contact with the purchasers until the SAS Agreement was completed. (Completion had occurred two weeks earlier on 15 June 2004). In relation to the issue of the target figure for the balance of the deposits due on the sale of apartments, Thompson was asked by Frawley for his " drop dead " figure. Thompson said it was a " moving target " which depended upon a number of factors including the level of deposits received in addition to the final building costs for the Erskine on the Beach Project. Those matters were expressed by Thompson to Smith as having a direct effect on whether Latitude would go unconditional under the HofA and waive the Deposits Condition Precedent. Another issue raised at this meeting was Latitude's finance for the project. Smith asked Thompson about mezzanine finance and told Thompson that BreakFree had a good working relationship with McLaughlin Financial Services ("MFS") and that MFS was prepared to finance Latitude's development of the Erskine on the Beach Project. My drop dead figure is a moving number. The greater the contract confirmations the lower margin I'm prepared to accept. When will you be starting on the uncontacted purchasers? Is there anything I can do to help with the builders? Quite straight forward and see no reason why can't get this done asp (sic). It's possible I might need a few days after the 31/7/04 due to the fact that tenders generally don't rock up until the last minute. Have a think and let me know. The level of deposits, together with the final building costs, had a direct effect on Latitude's source of funding and, in particular, whether Latitude would need to use more expensive mezzanine finance. During this period Thompson had worked with the architect, Mr Booth, to alter and improve the construction specifications for Stages 3 and 3A before they went out to the builders for tender. It forecasted an even lower development profit of approximately $1.725 million. Thompson's calculation was still dependent on the tenders from the builders and lower furniture costs from BreakFree. 43 On 19 July 2004, the third variation to the HofA was agreed. BreakFree requested Latitude's written consent to extend the time under cl 2.2.1 of the HofA from 31 July 2004 to 13 August 2004. Clause 2.2.1 covered all conditions precedent except the Deposits Condition Precedent. It permitted Latitude time to complete its due diligence and permitted time for the tenders to come in and be analysed. Latitude provided its written consent on the same day. 44 By 23 July 2004, Latitude had obtained a loan facility from the Commonwealth Bank for $21.76 million to proceed with the development of the Erskine on the Beach Project. 45 Some six days later, 29 July 2004, three builders provided their tenders. H. Troon Pty Ltd ("Troons") came in at $16,251,824; Chargold Constructions Pty Ltd ("Chargold") came in at $16,950,575; and SJ Higgins Pty Ltd ("Higgins") at $18,317,000. The work done by Booth and Thompson in the preceding 4 months had resulted in lower construction costs. Troons and Chargold were asked to do further work on their tenders and resubmitted them. Thompson did not recall Smith attending the meeting though Smith and Thompson gave evidence that Smith came in later and contributed to the discussion. In the end, the focus of the discussions at the meeting was not in dispute - the appointment of a builder, the unlikelihood that BreakFree would collect the balance of 65% of the deposits in the time available and Latitude's financing. During the course of the meeting, Smith asked Thompson if he was ready to commit Latitude to proceed with the Erskine on the Beach Project. As Smith stated in his witness statement " [i]t was irrelevant whether the 65% of deposits was collected as Breakfree ... would proceed with or without the 65% target" . In other words, BreakFree would have had to obtain finance for itself irrespective of whether the Deposits Condition Precedent was satisfied. According to Smith, the issue at the meeting was whether Latitude would proceed under the HofA. This will be based on two contracts. One for Stage 3 with completion aimed for July 31 and one for Stage 3A (Princess Louise) with completion October 31. It is critical to hit our completion dates that by August 13 if finance is in place we have a decision on whether or not you will proceed. Latitude has worked extremely hard to give you a better product in stage 3 & 3A. I've identified a lot of problems and hopefully if Richard [Booth] has done his job correctly rectified them. Giving ultimately BF and investors a better product. Stage 4 in my opinion is now a vastly superior product than what was originally contemplated. And providing BF with a better balance of rental product. And one I believe would sell very well. Latitude has worked very hard at all aspects of it's [sic] end to ensure it is able to meet it's deadlines. Major issue is the contracts, which I can understand why you have tried to go gently, gently with . We all felt more would come to the line easier than has happened. You are now going to have to get the hammer out and be real tough but Latitude is running out of time for you to get this done. Tony's offer of cost is very nice but the reality is I'm doing this for the end game not to have worked hard for 5 months to get the bills paid . After all at the end of this BF is the one making the most out of this thing and rightly so, when we consider the end goal of stage's 3, 3A and 4. Give this some thought. If you and Tony are agreeable then this could be nutted out very quickly and the thing gets done. Look forward to your comments. Also by the way Latitude has until 30/8/04 for the contracts not 15/8/04. I'll discuss why with you when you want. As Thompson's email records, the only 'live' issue between them was the Deposits Condition Precedent. The tenders from the builders were in and Latitude had secured finance for the Erskine on the Beach Project. We have the builder ready to go in September with a July to October finish next year but I'm concerned that the developer may not go unconditional (13 August is the deadline). If this is the case BreakFree would then complete the development. As Smith's email to MFS the previous day made clear, Smith had not sought financing for Latitude but for BreakFree. The first email attached two documents --- the term sheet for financing for Latitude by MFS of $22,500,000 and a deposit payment table as at 21 July 2004. The second email attached a document setting out the current position in relation to obtaining deposits from purchasers. The table revealed that as at 6 August 2004 only 45.49% of total deposits had been procured from all purchasers of apartments in Stages 3 and 3A. Finally, on 6 August 2004, Frawley provided Thompson with the amended contribution costs for the project. 53 On 9 August 2004, the solicitors for Latitude (Middletons) contacted BreakFree's solicitors (Maddocks) seeking answers to a number of issues raised as part of Latitude's due diligence enquiries. Maddocks responded to the matters raised by email letter on 10 August 2004 and enclosed numerous documents. 54 On 10 or 11 August 2004, Frawley sought Thompson's agreement to the fourth variation to the HofA. The change Frawley sought was to effect a sale of the development rights to Latitude by way of a sale of shares in Erskine House Developments Pty Ltd ("EHD") rather than a sale of assets. (On 21 May 2004, BreakFree had nominated EHD as the assignee of all of the estate and interest in BRD under the SAS Agreement On 15 June 2004, the 'Developer's Assets' were assigned to EHD. It is by no means clear when Thompson first became aware of the assignment or of BreakFree's intention to divest itself of the Developer's Assets using EHD. In cross examination he accepted that BreakFree had a deal with Latitude under the HofA, that he did not remember saying to Thompson that it was a new deal and did not remember saying to Thompson that it was a 'new contract'. I reject any suggestion that Frawley mentioned 'new contract' or 'new deal' during the course of this conversation. I consider that Frawley's witness statement was a post event reconstruction of what occurred. This is analysed in further detail in [110(2)] below. 56 In any event, on or about 10 or 11 August 2004, Thompson consulted his accountant, Mr McMurtrie, about the proposed sale of shares. Mr McMurtrie spoke to BreakFree's accountant and, after those discussions, reported to Thompson that " there was no real issues with [the change], no problem at all providing the company didn't have a history ..." . Thompson's advice was that he had " to form another company ... that would acquire the shares" and that " it was easy to do" . On or about 12 August 2004, Latitude's agreement to this variation was communicated to Frawley on the basis that EHD was a "clean skin". 57 On 11 August 2004, Middletons provided Latitude with its due diligence report. The report outlined a number of warranties that Middletons advised should be sought to give effect to the HofA. If Latitude is satisfied with its enquiries, or it does not take steps to notify BreakFree by this date that it is not satisfied with its enquiries and that it no longer wishes to proceed with the transaction, Latitude will be bound under the [HofA] to purchase the development rights for the apartments. The information provided in this letter is only a summary of the key legal risks and issues that we have identified as a result of our due diligence enquiries, and it should be considered in conjunction with the other commercial issues you have identified as part of your own enquiries. The contents of the covering email are also important. Their [sic] are a couple of issues that I will require indemities [sic] from you for. Don't believe they are major just equitable. Due to time constrants [sic] I felt it best to shoot you a copy and in [sic] less you have objections we sort them out next week. I'm on mobile for next two days. All is going well just wait for letter confirming finance. Verbal okay yesterday written due today. I'll be intouch [sic] asp [sic]. My understanding is I have to notify you only if I don't want to proceed. What was said during that conversation is disputed. The recollections of Frawley and Thompson differ. Thompson's sworn evidence was that during the telephone conversation he waived the Deposits Condition Precedent under the HofA and committed to proceed with Stages 3 and 3A of the Erskine on the Beach Project. Frawley disputed Thompson's version of the conversation. His sworn evidence was that the conversation was not concerned with a waiver of the Deposits Condition Precedent under the HofA but with what he called the 'new contract'. In my view, the only objective characterisation of what occurred on 12 August 2004 was a waiver of the Deposits Condition Precedent under the HofA. I consider this issue in further detail in [104] to [113] below. 61 At about 3.37 pm, Frawley spoke to his solicitor, Chong Ming Goh at Maddocks. No contemporaneous record of that conversation was tendered. 62 Following those telephone calls, at 4.29 pm Frawley sent an email to his solicitor at Maddocks (Chong Ming Goh), copying it to Thompson, entitled " Proceed with contract with Latitude" . Both the title to, and contents of, this email provide further contemporaneous objective evidence that Thompson and Frawley had agreed to waive the Deposits Condition Precedent. It will be a share sale agreement and we will warrant that [EHD] is a clean company. The sale will not be conditional on a % of deposits being reached by August 31. The development of the guest house will not be included in this contract. I will speak to Ros tomorrow. In my view, it did. I understand what you said but as I indicated I felt there is alot of value their. ...As I said I'm happy to look at this but the [HofA] called for 30/6/04 and Ros hadn't submitted by that time. Completion dates resolve that. " The same day, Thompson received an offer of finance from LM Investment Management Ltd. The facility was $22,785,000. 65 On 16 August 2004, Thompson met Frawley to discuss the appointment of the builder for Stages 3 and 3A. BreakFree wanted Troons. Latitude wanted Chargold. I will push Maddocks to get contract finalised. The more I think about it we need to appoint Troons by Tuesday before you go away. Give me a call when you have reviewed their adjustments etc and we can finalise. 66 On 18 August 2004, four events occurred. It's important we keep the pressure up: It is also possible it's time to bring the agents back in to the harder core ones to determine issues. I feel that the agents should speak to purchasers not girls in office. Although Troons were more expensive and Latitude preferred Chargold, Troons were the successful tenderer and received notice from BreakFree on 18 August 2004. BreakFree have purchased two Resort Management Rights from Latitude, over the past two years and have a high regard for Josh Thompson and Latitude developments. I am sure you will enjoy a mutually rewarding and successful relationship with him". 68 That afternoon, Frawley sent an email to its solicitor (Chong Ming Goh) which was copied to Thompson. Frawley's email referred to a conversation between Frawley and Chong Ming Goh and reminded him to " please copy Josh in on contract when you send to Middletons as he is away to Adelaide tomorrow. Josh it will be there by 7pm tonight" . 69 At 8.36 pm, Chong Ming Goh sent a covering email attaching a draft of the Sale of Shares Agreement and the Fixed and Floating Charge to James Edmonds at Middletons, Frawley and Thompson. The Sale of Shares Agreement incorporates the matters discussed by our client with your client. 70 Frawley's email to Stephen Healey of BDO Kendalls of 19 August 2004 also objectively supports that view. Frawley told his accountant that " Latitude have cleared that we can do the sale of the development rights by share sale agreement" . The sale of the ' development rights' was what BreakFree were already contracted to sell to Latitude under the HofA. 71 On about 20 August 2004, Thompson explained to Frawley that he could not see any point in Latitude issuing three bank guarantees to BreakFree when Latitude would be receiving back one of the three bank guarantees at the commencement of construction or shortly after the provision of the Second and Third Bank Guarantees. Frawley agreed that Latitude would only provide one more bank guarantee in addition to the first bank guarantee that had already been provided by Latitude under the HofA. Later that day, Thompson contacted his solicitor at Middletons and told him of the amendment. Similarly, Frawley spoke to his solicitor at Maddocks and confirmed, inter alia , that there would be no Third Bank Guarantee. 72 Between 20 and 23 August 2004, Thompson received three additional deposit tables from Frawley. The third table showed that 55.98% of the deposits had been collected. 73 On 24 August 2004, at 11.10 am, Frawley emailed Thompson a copy of a draft letter he proposed be sent to all purchasers of apartments. The covering email stated " Here is my draft owner letter. Please provide comments --- should I mention Latitude or not at this point? Probably best not to until all deposits etc are in. " Thompson replied a few minutes later by email stating " That is really good. I agree leave Latitude to the side until deposits are in. Cheers Josh. 75 During the afternoon of 25 August 2004, Thompson obtained approval for the Second Bank Guarantee from the Commonwealth Bank. Just after 5.00 pm, Frawley sent an email to Chong Ming Goh at Maddocks about the contribution costs to be attached to the Sale of Shares Agreement. The email was copied to Thompson and reads, in part, " Middletons reckon they will have contract to you by 10 am. Please call me urgently once you receive it. We want to sign and release by noon . " (Emphasis added). On any view, the Sale of Shares Agreement was not going to be signed and released by noon on 26 August 2004. The reason for the urgency was never explained. 76 At the same time, Maddocks sent a third draft of the Sale of Shares Agreement to Frawley. At this stage, Middletons had not reverted with their comments. 3 dated 25 August 2004) with the amendments highlighted for your comments. Please note that Middletons have not reverted with their comments at this stage. Recitals A, B and C have been deleted as requested. The Third Bank Guarantee has been deleted and manner of release revised in clause 6.3. A copy of an amended version was emailed to him by Middletons at 9.28 am. I have assumed that Latitude is purchasing all the shares in [EHD]. On that basis, I have simply included the development rights as part of the Business of EHD since Latitude will take over that Business at completion. You should be aware that the Business of EHD as defined in the Agreement is broader than the construction of the Stage 3 and 3A Apartments. My concern is that there may be carry-over obligations from Stages 1 and 2 for which Latitude may become liable. If this has not been agreed between the parties, I suggest that either the Business be limited to the Stage 3 and 3A Apartments or Latitude obtain warranties and indemnities with respect to the previous Stages. The dates for the construction milestones are different to those set out in the [HofA]. I have amended the Sale of Shares Agreement to comply with the milestone dates set out in the [HofA]. Please let me know if you have agreed different milestone dates with Break Free. I have included the warranties, undertakings and requirements recommended in our due diligence report . We will definitely need protection. Ideally if they can be removed from this agreement so I don't have to deal with any issues that come up from the past work. Is this possible? Please put back as they were. So don't come back to [Thompson]. Chong Ming Goh forwarded the email to Frawley at 1.40 pm. Latitude has requested a number of amendments be made to the Agreement and, accordingly, I enclose the Agreement marked up with these proposed amendments. Latitude ... will be the purchasing entity under the Agreement and, accordingly, Latitude has been added as a party to the Agreement and Jobern Pty Ltd has been removed. I also suggest that Lorne Resort Apartments should be made a party to the Agreement. The definition of "Business" has been amended to include the "Assets" acquired by Latitude under the [HofA] and to clarify that Latitude are acquiring only development rights to the Stage 3 and Stage 3A Apartments. In addition, clause 3.3 has been inserted to make it clear that BreakFree remains responsible for the development of the other Apartments and for any claims arising out of the development of those other Apartments. I am instructed that the amount to be repaid on 30 June 2005 pursuant to clause 4.1.1 will be $3,000,000 and there are no relevant intercompany loans to be repaid. Accordingly, clause 4.2 and the drafting note following clause 6.5 have been removed. Upon Latitude's instructions, clause 6 has been amended to refer to only two bank guarantees and clause 8 has been deleted in its entirety as the earlier stage bank guarantee is not required. Consequential amendments have been made to the dictionary contained in clause 1. The warranties contained in clauses 7.3 to 7.6 are requirements coming out of the due diligence conducted by Latitude, some of which arise from representations made by BreakFree during the course of this due diligence process and the ongoing negotiations between our clients . Clause 7.5.6 has been inserted to allow Latitude to make the following amendments to the Contracts of Sale without seeking the consent of BreakFree and EHD. Clause 7.11.2 has been inserted pursuant to negotiations between our clients. In relation to the deposits, our client requires the warranties contained in clause 7.6.1 and an undertaking (clause 7.6.2) from BreakFree that it will ensure that Maddocks and Minter Ellison transfer all deposits held by them to Middletons. In addition, clause 9.2.4 has been inserted to require BreakFree to use its best endeavours to cooperate with EHD and Latitude in relation to procuring payment of the outstanding Balance Deposits. To ensure that the requirements of the Corporations Act in relation to managed investment schemes and the provision of financial services have been and continue to be complied with and to ensure that no purchaser is able to rescind their Contract of Sale, Latitude requires that clauses 9.6 and 9.7 be inserted. Further, Latitude requires that the Manager and BreakFree fully indemnify it for any loss or damage resulting, whether directly or indirectly, from any rescission by a Purchaser as a result of non-compliance with clauses 9.7.2 and 9.7.3. A last right of refusal for the Stage 4 development has been inserted as clause 12.2, as was agreed in the [HofA]. The GST clause in clause 19 reproduces the GST clause contained in the HofA. I consider that it is necessary to include these additional provisions for supplies made to Latitude under the Agreement other than the supply of the Apartments. Under 2.2.2, if the condition precedent is not fulfilled by 30/8/04, either party may terminate the Agreement by notice in writing to the other party. 82 What Frawley then did is unclear. In any event, at 2.15 pm, he spoke again with his solicitor for about 1 hour and 15 minutes during which time they " discussed some of the provisions in the Share Sale Agreement. Noted on draft agreement. Frawley stated that Thompson replied stating that " This [was] our first go at it and we always put in as much as we can on the first go" . Thompson was shown telephone records which indicated that he did speak to Frawley on the afternoon of 26 August 2004 for about one minute. Thompson did not recall the conversation. However, his sworn evidence was that he would not have said " This [was] our first go at it and we always put in as much as we can on the first go" on the basis that he and Frawley had developed a very close relationship over the previous months, he had a lot of respect for Frawley and that was not the way that Thompson conducted business. I accept Frawley's sworn evidence on this aspect of the matter. Thompson's evidence is contrary to the written instructions he gave his solicitor on 26 August 2004 set out in [78] above. 84 That evening Frawley again considered terminating the HofA. The ultimate decision to terminate was not communicated to Thompson for some 5 days. The solicitor's file note records that they discussed a number of clauses of the Middletons' draft of the Sale of Shares Agreement and the instructions he received from Frawley. Some of the amendments to the Sale of Shares Agreement proposed by Middletons were acceptable to Frawley. Many were not. 86 Some time in the morning of 27 August 2004, Frawley telephoned Thompson. Frawley told Thompson that BreakFree were not happy with the amendments and the warranties that had been inserted into the draft Sale of Shares Agreement. Frawley said that the transaction " was all getting to[o] hard" and that " it [was] becoming very complicated ". Thompson gave sworn evidence that he told Frawley that the amendments and warranties were based on advice he had been given. 87 Frawley then consulted with Smith. Smith and Frawley discussed the additional warranties. Smith was concerned with what he described as a moving of the risk from Latitude to BreakFree and with the length of time that it was going to take to come to a concluded agreement. Smith's instructions to Frawley were that unless he could come up with a solution by Monday, BreakFree needed to terminate the HofA. 88 Subsequently, at 11.50 am, Frawley telephoned his solicitor again. He told his solicitor that the HofA would be terminated. Will wait till Mon & terminate. Too hard to have 3 rd party involved & 2 nd mortgages. During the course of the second conversation, Frawley asked Thompson to pay the purchase price of $5.44 million up front. Thompson refused. It is common ground that the request was not a demand. The request for the payment up front was important. First, Thompson refused the request stating " No, that's not the agreement [under the HofA]" . Secondly, Frawley made the request knowing that it would be unacceptable to Thompson. Thirdly, Frawley's evidence was that the final decision to terminate was made during the course of that conversation when Thompson said that he would not pay the purchase price up front. 90 Nothing occurred over the weekend. BreakFree sat quietly waiting for 5.00 pm on 30 August 2004 to arrive so that it could, literally, break free. At that time, the work done to enable the development of Stages 3 and 3A to commence in September 2004 was well advanced: the builder, Troons, had been engaged and had a commencement date of 15 September 2004; all the working drawings for Stages 3 and 3A had been sorted out and the consultants had been engaged, had already performed a large part of their work and been paid by BreakFree. Frawley was not at work and said that he would call back at about 10.00 am. Frawley called Thompson at about 10.00 am. Frawley told Thompson that he was not going to warrant or indemnify anything. Frawley asked Thompson again if Latitude would pay the price of $5.44 million up front. Thompson said no. Frawley and Thompson then discussed a number of the clauses inserted into the draft Sale of Shares Agreement by Thompson's lawyers. Frawley said he rejected the clauses discussed. Thompson's sworn evidence was that Frawley said the clauses discussed were the only issues he had with the Sale of Shares Agreement. I accept Frawley's evidence that he did not state that the clauses discussed were the only issues he had with the draft Sale of Shares Agreement. First, that part of the conversation was not included in a subsequent email prepared by Thompson and sent to his solicitor on 30 August 2004 recording the details of conversations with Frawley on 27 and 30 August 2004 or in his initial witness statement. Secondly, as Thompson said in oral evidence, although he might have said to his own solicitor that the clauses discussed were the only ones discussed, if Frawley had more, he did not raise them with Thompson and finally, it is, as conceded by Thompson, inconsistent with the fact that Frawley was not prepared to warrant anything. 92 On 30 August 2004, at 12.35 pm, Frawley spoke by telephone with Chong Ming Goh at Maddocks. Don't think [Thompson] will do that. So unlikely will be any development there. [Frawley] said that they had also met with the purchasers & he's happy that best endeavours have been carried out. Initially, Thompson gave sworn evidence that the call took place at 4.00 pm. However, on being shown Frawley's telephone records, Thompson conceded that the call took place at 5.05 pm. Frawley told Thompson that Latitude had added too much into the draft Sale of Shares Agreement and had taken too long to sort it out. Frawley said that if Latitude was not prepared to pay the money up front then BreakFree were walking and would do the project themselves or find someone else who would pay the money up front. Frawley offered to pay Latitude's legal costs and told him that he would be sent a letter the next day. Thompson replied "we'll see". 94 At 5.17 pm, Frawley telephoned Chong Ming Goh and reported his conversation with Thompson. Told him proposed to pay the legal costs. He said "we'll see" . [Frawley] asked if we should send letter today. Told him better tomorrow because cut-off is today. [Frawley] agreed. Let [Thompson] come back on that. Unfortunately, as at 30 August 2004, BreakFree has only managed to procure the balance deposits from 57.95% of the purchasers of the Stages 3 and 3A Apartments (as defined in the [HofA]). The attached email set out a description of the work undertaken by Thompson on the Erskine on the Beach Project before the HofA had been signed. The thrust of the draft email was not that the actions of BreakFree were wrong, just unfair. We are instructed that our respective clients waived the condition precedent in clause 2.1.5 of the [HofA] and that the waiver was communicated to you in an email from Mark Frawley dated 12 August 2004. We attach a copy of that email and refer you to point 2 in particular. Accordingly, we are of the view that your client's purported termination of the [HofA] is invalid. As the draft Sale of Shares Agreement was never finalised, the rights of the parties remain governed by the terms and conditions set out in the [HofA]. 98 On 6 September 2004, Latitude lodged a caveat dated 1 September 2004 against the Crown Lease claiming an interest under the HofA. On 16 September 2004, BreakFree' solicitors wrote to Latitude's solicitors seeking removal of the caveat. On 10 December 2004, the shares in EHD (and thus the right to develop stages 3 and 3A) were sold to MFS for $5.4 million. As I have said earlier, the central issue arises out of the fact that, on 31 August 2004, BreakFree purported to terminate the HofA for want of compliance with the Deposits Condition Precedent and, on 22 September 2004, Latitude said that conduct was repudiatory and accepted that repudiation. 102 Each party identifies repudiatory conduct by the other as justification for its abandonment of the HofA. This section will analyse the validity of the parties' various arguments and conclude that BreakFree's conduct in terminating the HofA by letter dated 31 August 2004 (see [95] above) was repudiatory conduct and that Latitude's response on 22 September 2004 (see [99] above) constituted lawful acceptance of that repudiation. As the following analysis demonstrates, nothing that Latitude did in the period leading up to 31 August 2004 or subsequently, validated BreakFree's purported termination of the HofA and Latitude is entitled to damages for BreakFree's wrongful repudiation of the HofA. 105 The terms of the HofA are critical. For present purposes, cll 2 and 3 of the HofA are important. 107 The binding nature and effect of the HofA was repeatedly reinforced by counsel for BreakFree. That is the second matter not in dispute. However, until execution of such a long form contract (if at all) and subject to any agreement to vary the terms of the HofA, the parties remained bound by the terms of the HofA to buy and sell the Developer's Assets. Given that is so, the only objective characterisation of the exchanges that are ultimately recorded in the emails sent on 12 August 2004 (see [62] and [63] above) is that they record the mutual giving up of the capacity to terminate for the failure to satisfy the Deposits Condition Precedent. Not only did the parties have the power to give up that capacity, there was no need for that agreement to be recorded in writing: cl 2.3. 110 There are other facts and matters which support that objective characterisation. Frawley could remember little of the conversation on 12 August 2004. He could not recall Thompson or him having used the expression 'new contract'. The post event reconstruction in his witness statement was said by Frawley to be substantially the work of his solicitors and counsel. In so far as the statement contained his own recollection, that recollection was refreshed from the documents to which I have just referred. If, as BreakFree's characterisation of the 'new contract' would have it, the parties had already agreed to replace the HofA, it cannot be said that the negotiations relating to the terms of that 'new contract' did not include the terms which had been the subject of formal discussion and agreement. Any 'new contract' was in terms substantially the same as the HofA and though negotiations continued until 30 August 2004, many of its terms had been agreed. The content of the written communications exchanged between Frawley and Thompson, and between Frawley and his solicitor, following their conversation on 12 August provide objective contemporaneous evidence that the discussions related to the terms of the long form version of the HofA. The parties were negotiating issues which were critical to them and arose out of the HofA. This was admitted by both Smith and Frawley. Frawley's assertion that he would not have waived the Deposits Condition Precedent as it was his only 'escape route' or the 'card up his sleeve' should be rejected. We don't waive it"? --- No, no issue. Especially is that so when on 3 August 2004, Frawley told Thompson that BreakFree was unlikely to get 65% of the deposits topped up by 30 August 2004. This requirement was described as a warranty and not a condition precedent and did not (in light of cl 9.2.3) constitute an undertaking by BreakFree that the contract was conditional on the collection of all deposits by it. Clause 9.2.3 provided that Latitude would be responsible after the Commencement Date for procuring payment of unpaid deposits and under cl 9.2.4 BreakFree undertook to 'continue to use its best endeavours. . .to cooperate with any reasonable request of [Latitude] in relation to procuring [such] payment' . During this period, Frawley's solicitors corresponded with Latitude's solicitors about the content of the draft Sale of Shares Agreement. As outlined in (8) above, the parties no longer proceeded at the time of the critical conversations of 27 August and 30 August, on the basis that collection by BreakFree would be possible by the Collection Date. Collection of outstanding deposits by that date was desirable, and was envisaged to be the subject of BreakFree's ongoing responsibilities, but the fact of any outstanding deposit was not intended to frustrate the completion of the Sale of Shares Agreement. This is reinforced by the content of Frawley's complaint to his solicitor on the morning of 27 August 2004 about it being " too hard to have a third party involved and a second mortgage . " The non-fulfilment of the Deposits Condition Precedent was significant as a potential exit-strategy but could not be said, on any construction, to be the breaking point for the negotiations. The solicitor's file note of this conversation indicated that " [Frawley] wants to use non-fulfilment of condition precedent re: non-payment of deposit" and is consistent with my view that commercial considerations and not non-satisfaction of the conditions precedent were critical to BreakFree's decision to terminate. The parties had given up the capacity to terminate the HofA for failing to satisfy the Deposits Condition Precedent on 12 August 2004. 112 As will be apparent, I have characterised the events of and from 12 August 2004 as the mutual giving up of the capacity to terminate for the failure to satisfy the Deposits Condition Precedent. The parties variously described the events as 'waiver', 'new contract' and variation. BreakFree submitted that there was no waiver in fact or at law. I have dealt with the facts. The legal submission does not assist BreakFree. It is true that in Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 at 423, Brennan J defined waiver as " a unilateral release or abandonment of a right" where the right is abandoned once and for all. However, his honour went on to note (at 425) that " it is a characteristic of a right susceptible of waiver that it is introduced solely for the benefit of one party" . In the present case and notwithstanding the fact that BreakFree was contractually bound to proceed with the development in the absence of the HofA, the express terms of cl 2.1.5 make it abundantly clear that it was not a right susceptible of waiver --- it was not introduced solely for the benefit of one party. To suggest otherwise is to ignore the express words not only of cl 2.1.5 but also cl 2.3 of the HofA. 113 There is also arguably a further difficulty with BreakFree's contention that it was entitled to rely upon the Deposits Condition Precedent. It is by no means clear that BreakFree would have been entitled to resile from any contract, whether it be a 'new contract', the HofA or the long form contract, for non-fulfilment by it of its contractual obligations in circumstances where the innocent party had no recourse against it. The termination letter on 31 August 2004 demonstrated an intention by BreakFree to use its own contractual breach to avoid completion of the HofA or any 'new' or long-form contract in existence at that time. (2) WAS BREAKFREE ENTITLED TO TERMINATE THE HOFA ON SOME OTHER BASIS? That conduct was variously described as a breach of duty by Latitude to negotiate in good faith to give full effect to the HofA, the alleged failure by Latitude to provide the Second Bank Guarantee, the Third Bank Guarantee and the Fixed and Floating Charge and the conduct of Latitude after 31 August 2004. I will deal with each purported basis in turn. The good faith requirement in cl 3.3 is reinforced by cl 13.3 of the HofA relating to Latitude's acquisition of rights to Stage 4 of the Erskine on the Beach Project. Clause 13.3 provided that the Latitude and BreakFree " use reasonable endeavours to negotiate in good faith and finalise the agreement for the Stage 4 development" . 116 The conduct alleged to give rise to this breach was said to comprise both subjective and objective elements and arose out of the request by Latitude for a series of amendments to the Sale of Shares Agreement in the form of additional undertakings, warranties and indemnities to be provided by BreakFree. It is necessary to analyse Latitude's conduct in light of the relevant principles and all of the circumstances. 119 However, since the early 1990's courts have, in certain circumstances, held that an explicit promise to negotiate in good faith is sufficiently certain to be contractually binding: eg Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1; Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104; Aiton Australia at [80]; and see Carter JW, Peden E, Tolhurst GJ, Contract Law in Australia (5 th ed, 2007) at 94-95. It appears to involve two concepts - " negotiations in good faith " - but directed at a particular end - "to ensure that the terms set out in these [HofA] are given full effect. " The phrase " negotiations in good faith " is not a defined term. That does not necessarily make the requirement uncertain. A term stipulating that parties " will conduct all such negotiations in good faith " is a contractual term. The question whether the court is capable of putting a definite meaning on cl 3.3 raises additional issues - when, how, why and by reference to what standard or principles is the clause to be given a definite meaning? How is one person's bargaining to be judged to be in breach of a promise or a duty to negotiate in good faith? Is a higher duty to be imposed in certain and, if so, what circumstances? Do the additional words " to ensure that the terms set out in these Heads of Agreement are given full effect" in cl 3.3 of the HofA assist in providing certainty or add to its uncertainty? What do these additional words mean? 126 An examination of just two cases illustrates the difficulties in identifying any standard or principle against which the certainty of such a clause is to be considered. In Coal Cliff , the Court found that an obligation to proceed " in good faith to consult together upon the formulation of a more comprehensive and detailed joint venture agreement " was uncertain: see Kirby P at 28 with whom Waddell A-JA agreed. There were many such differences at the time of the heads of agreement and a number remain even three years later when negotiations were finally broken off. A court would be extremely ill-equipped to fill the remaining blank spaces and to resolve questions which three years of painful negotiation between the solicitors for the parties had failed to remove. At stake are commercial decisions involving adjustments which would contemplate binding the parties for years and deciding issues that lie well beyond the expertise of a court. How mining executives, attending to the interests of their corporation and its shareholders might act in negotiating such a complex transaction is quite unknowable. The discussion by the members of the courts who decided Coal Cliff and Trawl Industries , as well as the discussion by Giles, J. of the problems he had to consider in Hooper Bailie and in Elizabeth Bay show that the question may be more complex than the simple statement of it may suggest and that the answer to the problem may vary according to the precise terms of the agreement. They suggest that it is only when all of the circumstances are known that it can be seen whether the obligations of the parties (described as "to negotiate") can be identified with certainty. Hayne J distinguished the agreement in Con Kallergis from that considered by the House of Lords in Walford. The latter was found to be uncertain because either party could break off negotiations at any time and for any reason. 130 I consider that cl 3.3 of the HofA is uncertain. Clause 3.3 of the HofA suffers from the same problems referred to by Kirby J in Coal Cliff . As I have said, what does the phrase " [e]ach party will conduct all such negotiations in good faith to ensure that the terms set out in these [HofA] are given full effect " mean? How and against what standard is the Court to fill in the gaps? I consider the issue of the content of any such duty in further detail in section (iii) below. For present purposes, it is sufficient to note that I do not consider that it was open to BreakFree to seek to terminate the HofA on the grounds that Latitude had breached cl 3.3 of the HofA. The term was uncertain. 131 Notwithstanding the view I have formed that cl 3.3 of the HofA was contractually uncertain, it is however desirable to examine the existence and content of the asserted duty. That examination will reveal that despite repeated dicta accepting the existence of the duty of good faith of the kind relied upon, Counsel took me to only one case in which it was held, at first instance, that there was a breach of such a duty and yet even then that holding was not determinative of the outcome of the litigation: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [60] and on appeal in Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395 at [119] and [235] to [238]. Secondly, as the subsequent discussion will reveal, I am not to be taken as accepting that such a duty, however defined, exists. There has been a recent willingness of Australia Courts to find that a duty of ' good faith ' in negotiations is an implied or incidental term of every commercial contract unless the duty is either excluded expressly or by necessary implication: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] ; Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 ; Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187 ; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) 21 ATPR 41-703; Alcatel Australia Pty Ltd v Scarcella (1998) 44 NSWLR 349; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 and Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 . At that time, the authorities relevant to the implied term of ' fair dealing' were collected and discussed by Finn J in Hughes Aircraft Systems at 188-198. It is unnecessary to traverse either those authorities or the more recent decisions that have considered the issue. 134 It is sufficient to note that intermediate courts have repeatedly been willing to hold that such a duty exists. However, as noted earlier I was referred to only one decision where the existence of such a duty (express or implied) was held to have been breached: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [66] , a decision which Gyles J subsequently described as ' adventurous ': Council of the City of Sydney v Goldspar Australia Pty Ltd (2006) 230 ALR 437 at [166]. Two things should be noted about the decision at first instance. First, the breach of such a duty was not determinative ( Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [60] ) and the decision was the subject of appeal. 135 There is another more difficult issue which may explain the fact that my attention was drawn to only one Australian decision in which the duty has been said to have been breached --- the lack of any precise and readily ascertainable standard against which the negotiations of the parties can be assessed to determine whether it amounted to 'good faith'. It is to that issue that I now turn. That is not surprising. The High Court declined to enter the debate in Royal Botanic Gardens and Canadian academic, Professor Michael Bridge, sceptically defined good faith as " a concept which means different things to different people in different moods at different times and in different places ": '"Does Anglo-Canadian Contract law need a Doctrine of Good Faith? '" (1984) 9 Can Bus LJ 385 at 407. Professor Bridge's description is concerning. If true, a requirement to negotiate in good faith provides little or no assistance to parties in seeking to ascertain or judge their conduct. 137 While the precise boundaries of the content of a requirement of good faith in negotiations remains unclear, some propositions have enjoyed varying degrees of judicial support. 138 First, what is 'good faith' or the content of a good faith obligation will inevitably turn on the facts of each case. It has been described as a contextual standard. In Australia, this has been the starting point for an assessment of good faith in a number of cases. The contextual standard has been variously described. As such, the standard must be fact-intensive and is best determined on a case-by-case basis using the broad discretion of the trial court. It has evaded the grasp of precise judicial statement. However, the factors put forward by various judges as indicative factors of good faith and, the converse, bad faith may be divided into three categories --- intention, conduct and the content of the particular contract in question. The difficulty in identifying the scope of ' honesty ' suffers the same problems as defining the expression ' in good faith '. It merely replaces one term with another. 143 As a result, some academics and judges have resorted to ascertaining the scope of ' good faith ' by focusing on the negative or the exclusions - what constitutes ' bad faith '. This has been described as the ' excluder ' definition on the basis that the good faith requirement cannot actually be satisfied in positive terms: See Summers RS, "'Good Faith' in General Contract Law and the Sales Provisions of the Uniform Commercial Code" (1968) 54 Va L Rev 195; Renard Constructions at 266; Burger King at [150]; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] - [65] . 144 Professor Summers suggested (in the context of US case law) that " [good faith] is a phrase which has no general meaning or meanings of its own, but ... serves to exclude many heterogeneous forms of bad faith ": at 196. One example was identified as acting " arbitrarily and capriciously exercising a power to terminate a contract" with the correlative duty to " act with some reason ": at 203. 145 On the other hand, some have suggested that the concept of ' good faith' " sets a standard which is sometimes positive in its orientation and sometimes negative, but just as any condition subsequent can be expressed as a condition precedent, so also can every negative orientation of good faith be expressed in positive terms ": Carter et al (2007) at 27. These attempts to define ' bad faith ' have tended to focus on the intention of the ' breaching ' party and have included acting for an ulterior purpose, acting for an improper purpose or acting with intention to cause harm: See Carter et al (2007) at 27. (4) failing to act 'reasonably' in general. I consider this requirement in further detail below. Following this decision, courts have favoured ' reasonableness ' as one of the requirements of good faith. Finkelstein J in Garry Rogers Motors stated that "provided the party exercising the power acts reasonably in all the circumstances, the duty to act fairly and in good faith will ordinarily be satisfied" : at [37]. However, several Australian academics have rejected the proposition that good faith includes a requirement of reasonable conduct: See Carter et al (2007) at 27 and Peden, E " When Common Law Trumps Equity: the Rise of Good Faith and Reasonableness and the Demise of Unconscionability " (2005) 21 JCL 226. It evades precise definition. The content of any such duty will vary from case to case. Further as the authorities have demonstrated, the conduct said to breach such a duty has inevitably given rise to relief under existing causes of action. Against that background it becomes necessary to consider the HofA and the conduct of Latitude. If there was a breach of a duty to negotiate in good faith, what is it about the circumstances of this case that is said to give rise to a breach? In the present case, I do not consider that there is anything about Latitude's conduct which could be said to be in breach of any such duty. 151 In my view, BreakFree's allegations are an after the event characterisation of the commercial consequences of its conduct in circumstances where the ground upon which it relied to terminate the HofA was not only in doubt but was not open to it. 152 The conduct relied upon by BreakFree as amounting to a beach of the duty to negotiate in good faith was said to be Latitude's insistence upon certain warranties and indemnities. At the time they were sought, they were described both by Latitude's solicitor and by Thompson. Thompson did not believe they were " major, just equitable " and told BreakFree in writing in those terms. Latitude's solicitor stated that "[t]he warranties contained in clauses 7.3 to 7.6 [were] requirements coming out of the due diligence conducted by Latitude, some of which arise from representations made by BreakFree during the course of this due diligence process and the ongoing negotiations between our clients . " That was consistent with the due diligence letter Middletons provided to Latitude which advised Latitude to seek various warranties and indemnities. On 12 August 2004, Frawley received an email from Thompson enclosing that due diligence letter. Both the email and the due diligence letter stated that Latitude was going to seek indemnities from BreakFree. On 26 August 2004, Frawley received the draft Sale of Shares Agreement amended by Latitude's solicitors including indemnities and warranties. The inclusion of the warranties and indemnities in the draft Sale of Shares Agreement could not have been a surprise. It had been foreshadowed some 2 weeks earlier. Moreover, Frawley knew from the SAS Agreement under which BreakFree had purchased the Developer's Assets that the nature of the assets and the structure of the Erskine on the Beach Project was anything but straightforward: see [22] above. 153 Latitude was not required to restrict its decisions and actions, reasonably taken, which were designed to promote its legitimate interests and which were not otherwise in breach of an express term of the HofA. Latitude's conduct was no more than an attempt, on legal advice, to protect its own interests. Applying any of the tests summarised above, it cannot be said that Latitude's conduct was in breach of any duty to negotiate in good faith. 154 BreakFree's assertion that " nothing in the HofA entitled Latitude [to] impose terms on BreakFree and BreakFree was not obliged to accept such terms...[Latitude] can propose them, and [BreakFree] can reject them " is not to the point. It ignores the binding nature of the HofA and, in particular, cl 3.1 of the HofA. In other words, the HofA bound the parties to sell and purchase the Developer's Assets subject to the conditions precedent which were satisfied. 155 Alternatively, BreakFree's counsel contended that Thompson did not undertake negotiations in good faith but acted unreasonably in circumstances where he sought a range of warranties and other amendments in the period leading up to 30 August 2004. His requests culminated in the email letter from Middletons to Maddocks on 26 August 2004 attaching a marked up draft Sale of Shares Agreement that identified Latitude's proposed amendments. It is extracted at [80] above. As the extract of the covering letter records, at least some of the proposed changes (the warranties and undertakings contained in cll 7.3 to 7.6 with respect to the crown lease; the deeds of agreement for the apartment subleases and the collection and transfer of purchasers' deposits; the undertakings relating to the provision of financial product advice in relation to the sale of apartments in cl 9.6 and the indemnity in the case of individual apartment subleases being rescinded by a purchaser in cl 9.7) were described as "requirements". BreakFree sought to place great weight on the word "requirements". There appeared to be two aspects to BreakFree's argument that these "requirements" indicated that Latitude did not undertake contractual negotiations in good faith --- one reflecting the alleged subjective views of Latitude and the other relating to the objective construction of the existing HofA. 156 In relation to the alleged subjective intentions of Latitude and the manner in which negotiations were approached by Thompson, BreakFree submitted that Middletons' covering letter evinced inflexibility and an unwillingness to compromise that would have facilitated completion of the Sale of Shares Agreement by 30 August 2004. Latitude's conduct was described by BreakFree's counsel as demonstrating " an absolute determination that unless certain terms were included in the [Sale of Shares Agreement] he would not go on " and that at no stage during the negotiations and the process between 12 and 26 August did Thompson make it clear to BreakFree that "he was not prepared to move away from certain core conditions which he regarded as non-negotiable" . 157 If there is a duty of good faith, then the authorities recognise that the conduct is to be measured against all of the circumstances of the case, which would include the timing of Latitude's request for amendments, the nature of the amendments and whether they were reasonable demands in light of the parties' respective positions and all other commercial considerations. Reasonableness appears to be the key to understanding how these contextual factors might assist in the characterisation of Latitude's request for further amendments and warranties. As I have set out above, Latitude's request for further warranties and indemnities was in my view a reasonable, though cautious, attempt to protect its commercial interests. Latitude was entitled to make requests for changes that it considered would protect its commercial interests. Whether or not it was unwilling to negotiate on an alternative basis is not relevant to the determination of whether its actions were consistent with any contractual requirement for it to negotiate in good faith. 158 Finally, BreakFree also asserted that the various amendments sought by Latitude were particularly onerous and had the consequence of shifting the risks of the development away from Latitude and imposing obligations upon BreakFree that were not capable of being performed by it as a manager of resorts. In other words, the proposed amendments were characterised as altering the fundamental character of the contract as a sale of the Developer's business because some of the developer's responsibilities were to remain a residual responsibility, after 30 August 2004, of the Manager. It was also said that these amendments did not arise out of the HofA. It is unnecessary to traverse the terms of each amendment. The relevant question is whether it was unreasonable for Latitude to propose amendments which were summarised on 12 August 2004 and made certain on 26 August 2004. Taken as a whole, the further warranties and amendments proposed on 12 August 2004 and again on 26 August 2006 reflected Latitude's efforts to protect its commercial interests. There was no commercial incentive for it to seek to negotiate on terms that were less advantageous to it. Even if new obligations were sought to be imposed on BreakFree, the contract remained one under which the principal responsibilities and advantages of the development remained with Latitude. Relevant to that conclusion (although not determinative) is the fact that Middletons' covering letter specifically asked for a response as to whether the amendments were acceptable and included an invitation to contact the solicitor for further information. The letter and the attached draft Sale of Shares Agreement did not contain an ultimatum. BreakFree's answer, at least from its solicitor, was silence. 161 First, it ignores the principles concerning repudiation. The principles governing repudiation of a contract are, as we understand it, not in issue and for present purposes can be stated shortly. That party may still be willing to perform the contract according to its tenor: DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12 ; (1978) 138 CLR 423 at 431-432; Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] UKHL 11 ; [1980] 1 WLR 277. But persistence in an untenable construction will ordinarily be regarded as repudiatory: Summers v Commonwealth [1918] HCA 33 ; (1918) 25 CLR 144 at 152; and see Chitty on Contracts [25-018]. We would note, additionally, that in the case of contracts of significant duration in which interaction and some level of cooperation is required, it is common for parties without formally varying their contract to conduct their dealings inter se in ways that they find acceptable and convenient, fair and reasonable, or commercially necessary "rather than by reference to a priori rights and duties": cf Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117. 163 Latitude's failure to provide, request or even secure the Third Bank Guarantee was entirely referable to the fact that, on 20 August 2004, Frawley agreed that Latitude would only provide one more bank guarantee, a fact he confirmed to his solicitor: see [71] above. This was the type of conduct that Finn and Sundberg JJ considered in [103] of Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395. 164 Further, a request to extend the deadline for the satisfaction of cl 7 of the HofA was not, as submitted by counsel for BreakFree, identical to the procedure for extension of deadlines for the satisfaction of conditions precedent under cl 2.2 of the HofA. Clause 21.1 of the HofA applied to all other contractual variations and required the formal execution of a new deed. Its terms are mandatory --- " [t]hese [HofA] may only be varied or replaced by a document duly executed by the parties ". Time was of the essence (cl 21.5) and would, in relation to the provision of guarantees, have required formal amendment of the HofA. The efficacy of engaging in the procedure for formal amendment is questionable given that the parties' attention, in the week prior to 30 August 2004, was directed to a range of additional matters, including the warranties and other amendments sought by Latitude and communicated by its solicitors to BreakFree on 26 August 2004 [see [77ff] above]. In the circumstances, it was reasonable for Latitude to continue its negotiations on these matters without piecemeal amendment under cl 21.1 in respect of individual clauses such as the provision of guarantees under cl 7. The draft Sale of Shares Agreement forwarded by Middletons on 26 August 2004 was consistent with an intention that there be global amendments to the HofA in the form of a " document duly executed by the parties" pursuant to cl 21.1. 165 BreakFree's reference to the failure of Latitude to provide the Second Bank Guarantee under the HofA by 30 August 2004 erroneously focuses on only part of the circumstances which are to be judged objectively. Considered objectively, in light of all the circumstances, including the fact that Thompson had requested and received the bank guarantee from the Bank as early as 24 August 2004 and that all remained was for he and his wife to sign and fax the document, it cannot be said that the failure of Latitude to provide the Second Bank Guarantee to BreakFree, whether taken singularly or with any other fact or facts, evinced an intention on the part of Latitude no longer to be bound by the HofA. 166 The third event relied upon by BreakFree was the failure of Latitude to provide additional security (in the form of a fixed and floating charge or mortgage over the assets). BreakFree submitted this was further evidence of Latitude's repudiation of a critical term of the HofA. Clause 7.4.1 of the HofA was said to provide the contractual basis for this contention. 167 There is no dispute that Latitude did not provide this "additional security" or that its provision was somehow linked to the obligation to provide a number of bank guarantees to BreakFree under cll 7.1 and 7.2 of the HofA. The question is whether the " additional security" could properly be construed as a term, let alone a critical term, of the HofA in circumstances where it was identified as security for performance of a Long Form Contract that was never negotiated in final form or executed. 168 BreakFree submitted that it did and that the obligation was a necessary implication of cl 7.4.1 of the HofA and that performance of it by 30 August 2004 was made critical under cl 21.5. Cl 22.5 of the HofA, headed ' Severance ' and identified as a clause of general application, was said to require this construction. It provided for the severance of clauses held to be " invalid ... or unenforceable" unless it was possible to 'read down [the clause] to the extent necessary to ensure that it is not ... invalid ... or ... unenforceable'. This construction was said to be supported by considerations of business efficacy. Priority should be given, it was submitted, to preserving the parties' intention to be immediately bound even if the form of the arrangement was imperfect: Masters v Cameron at 360-361. 170 There are at least three reasons why these submissions should be rejected. Both relate to the terms of cl 7.4.1 of the HofA. First, cl 7.4.1 required that Latitude provide the charge or mortgage on the ' Possession Date' . This date was not defined by the HofA and must refer to the date on which Latitude took possession of the assets which it sought to acquire from BreakFree. Contrary to BreakFree's submission, the obligation to provide the charge was contingent on performance by BreakFree of its obligation to deliver these assets, defined in cl 1 as the assets of the Developer's Business. Latitude never took possession of these assets and could not be understood as undertaking, by cl 7.4.1, to confer on BreakFree a benefit unsupported by prior consideration. The second basis relates to the identification of the relevant consideration - the assets of the Developer's Business. Latitude could not provide security in respect of assets it did not possess. 171 Thirdly, the contention ignores the express terms of the HofA and the effect of it. The HofA was, as BreakFree submitted (see [105] above), a contract which, subject to the conditions precedent being satisfied, bound Latitude to purchase the Developer's Assets for $5.4 million. For the reasons set out above, the conditions precedent were satisfied. Latitude was bound to purchase those assets. The failure of Latitude to provide additional security pursuant to cl 7.4.1 of the HofA in relation to the long form contract did not constitute a breach of the HofA and, further, did not evince an intention on the part of Latitude no longer to be bound by the HofA. 172 During submissions, BreakFree argued that the position adopted by Latitude on this issue was inconsistent with its pleadings. In particular, BreakFree referred to the fact that the Reply filed by Latitude sought to explain its failure to provide the second and third guarantees under cl 7.2 of the HofA and the additional security referred to in cl 7.4.1 of the HofA as resulting " solely by reason of the notification by [BreakFree] of their purported termination of the [HofA] ". In my view, the content of the Reply does not assist BreakFree. It does not and cannot alter the substance of Latitude's contention (which I accept) that Latitude was, or would have been able, to perform its obligations: eg see Section (4) below. The alleged failure to take the steps relied upon by BreakFree does not constitute repudiatory conduct on the part of Latitude. 173 For the reasons outlined above, Latitude's conduct was not otherwise repudiatory. There was no basis on which BreakFree was entitled to terminate the HofA. Was BreakFree's conduct repudiatory and if so, was Latitude entitled to accept that repudiation. The short answer to both questions is yes. 175 Judged objectively by reference to the effect it would be reasonably calculated to have upon a reasonable person, BreakFree's conduct evinced an intention no longer to be bound. No other objective characterisation of its conduct on and from 26 August 2004 summarised at [77] to [96] above (including but not limited to its demand for payment of the purchase price up front when it knew that would be unacceptable to Latitude and its purported termination of the HofA on 30 August 2004 when it had, in fact, decided to terminate the HofA days earlier but not decided to tell Latitude and its letter of termination of 31 August 2004) is open. 176 The question which arises is whether Latitude was entitled to accept that repudiation. BreakFree submitted that Latitude was not entitled to do so because it was not ready and willing to carry out the HofA. The matter relied upon by BreakFree included Latitude's failure to tender the bank guarantees and the fixed and floating charge. 177 A party, which has properly brought a contract to an end by accepting a wrongful repudiation by the other party to an executory contract, must establish that it was ready and willing to carry out the contract at the time of acceptance of the repudiation and such readiness and willingness includes capacity: Goldspar at [200]---[202] and the authorities cited. As those authorities make clear the question is whether Latitude demonstrated that it was not then " disabled or incapacitated from ... performance ": Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 408-409 (per Mason CJ). That issue raises two questions - what was to be performed and was the relevant party to the contract disabled or incapacitated from performing those matters? 178 I am satisfied that Latitude was ready, willing and able to carry out the HofA. It demonstrated that it was not disabled or incapacitated as at 22 September 2004. It had the necessary skills to construct and develop Stages 3 and 3A of the Erskine on the Beach Project, the tender process was complete, Troons had been appointed the builder to construct the apartments, and had satisfied itself that the plans and building specifications were sufficiently advanced so that construction could commence on time. Latitude had completed its due diligence enquiries required by the HofA. Finally, adequate financing options were available to it to ensure that development would not be delayed. 179 BreakFree's assertion that even if it had repudiated the HofA (as it did), Latitude did not accept the repudiation but elected to affirm it should be rejected. The conduct said by BreakFree to constitute the election affirmation was the fact that Latitude lodged a caveat upon the Crown Lease on 1 September 2004 claiming an interest as sub-lessee. Latitude contended that the lodgement of the caveat was consistent with its right to terminate for the repudiatory breach by BreakFree that the lodgement of the caveat could not be characterised as an election by Latitude to affirm the HofA. An inference of affirmation will not be drawn from conduct just because it is consistent with the existence or the continuation of the relevant contract: Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [1993] HCA 27 ; (1993) 182 CLR 26. Where a contract can be terminated at the option of a promisee, the right to terminate is not necessarily lost by the promisee doing any act consistent with the continuance of the contract. If the act is also consistent with the reservation of a right to terminate in certain events, the right to terminate is not lost by the doing of the act. 180 Judged in that light, it cannot be said that the lodging of the caveat was unequivocal or not consistent with the reservation of a right to terminate. So much was made clear by the letter from Middletons to Maddocks of 31 August 2004 (see [96] above)). An election to terminate is a restricted right which may be effected after some delay by communicating that the contract is at end: see Cheshire and Fifoot's The Law of Contract (2002, 8 th ed) at [21.21] and [21.29]. There was no such delay in the present case. Contrary to BreakFree's submissions, the losses suffered by Latitude were not attributable to its own conduct but the wrongful conduct of BreakFree, repudiatory conduct which Latitude accepted. BreakFree's counterclaim is dismissed. 183 In light of the conclusions earlier set out, it is also unnecessary to consider and resolve Latitude's complaint that BreakFree breached its duty to negotiate in good faith. However, for the sake of completeness, I made the following observations. The legal analysis of the express and implied duty to negotiate in good faith set out above is relevant. It must be recalled that the context in which impugned conduct is said to arise is relevant. Here, BreakFree and Latitude were negotiating in the commercial context of vendor and purchaser. "Bad faith" or conduct imputing an absence of "good faith" takes on particular meaning where a vendor, in the position of BreakFree, seeks to use a power of rescission to resile late in the course of negotiations. Much less can he act in bad faith. He may not use the power of rescission to get out of a sale "brevi manu," since by doing so he makes a nullity of the whole elaborate and protracted transaction. Above all...he must not be guilty of "recklessness" in entering into his contract, a term [connoting] an unacceptable indifference to the situation of a purchaser who is allowed to enter into a contract with the expectation of obtaining a title which the vendor has no reasonable anticipation of being able to deliver. A vendor who has so acted is not allowed to call of the whole transaction by resorting to the contractual right of rescission.. . In light of these matters and of the foregoing analysis, the issue is whether the conduct of BreakFree, in the course of negotiations and ultimately relying on its power to terminate the HofA under cl 2.2.2, judged objectively, demonstrated a lack of good faith. 185 BreakFree's conduct was hard nosed. Two examples are sufficient. First, Frawley told Thompson on the morning of 30 August 2004 that BreakFree would not warrant or indemnify anything (see [91] above). Other conduct by BreakFree similarly demonstrated commercial shrewdness. For example, its request on 27 August 2004 that Latitude pay the purchase price upfront, a request that was repeated on Monday 30 August 2004 (see [89] and [91] above) and in circumstances where Frawley made the request knowing that it would be unacceptable to Thompson. I do not consider that BreakFree's conduct, viewed objectively, was in breach of any duty to negotiate in good faith. BreakFree's actions demonstrated commercial sharpness but it was not, in the context of negotiations between vendor and purchaser, unfair or unreasonable. BreakFree did not terminate in the offhanded manner described by Viscount Radcliffe but made a commercial decision in circumstances where protracted negotiations had become stuck and agreed deadlines had been reached without resolution of critical issues. Though I am unprepared, in the absence of binding authority, to find that this conduct constituted bad faith by BreakFree it did give rise to other remedies in the manner outlined above. In light of the conclusions I have reached in relation to Latitude's contractual claims, it is unnecessary to consider these issues. However, I do so for the sake of completeness. 187 It was common ground that s 52 of the TPA prohibited BreakFree or any person acting on behalf of BreakFree from engaging in conduct ' in trade or commerce' that was misleading or deceptive or likely to mislead or deceive and that the phrase, ' in trade or commerce ' was sufficiently broad to apply to the private contractual negotiations between Latitude and BreakFree: Poseidon Ltd v Adelaide Petroleum NL (1992) ATPR 41-164 (see also definition of "conduct" in s 4(2)(b) of the TPA). Factual findings already made in relation to the common law claims are pertinent to the resolution of the TPA claims. 190 On 15 April 2004, some 3 weeks after the initial meeting on 22 March 2004, Frawley sent Thompson an email attaching the "starting terms of our proposed heads of agreement" . Any development costs incurred by BreakFree in relation to Stage 3 & 3A up to this point will be added to the total purchase price and payable in final payment due 30, 2006. This would need to be tailored to an agreed construction schedule. If this schedule is not met then BreakFree could step in and complete the development. Thompson responded to Frawley's proposition that BreakFree reserved its rights in relation to the development assets under the HofA by email on 16 April 2004. The email attached a marked up version of the memorandum sent by Frawley deleting the references to BreakFree undertaking the development in certain circumstances (see [23]-[25] above). These changes are reflected by the underlined sections of the above extract. BreakFree accepted the amendments proposed by Latitude, affirming (on Latitude's submission) the parties' intention that Latitude's rights to develop the resort be independent of the manager's interests. 191 Latitude's contentions were said to be reinforced by the disputed conversation between Frawley, Smith and Thompson on 13 May 2004, the day prior to the execution of the HofA on 14 May 2004. The critical difference between the recollections of the three attendees at this meeting related to BreakFree's representations about its intention and interests in undertaking development in addition to resort management, as a general proposition, and in particular the desirability of it assuming a development role in relation to the Erskine on the Beach Project. Thompson's evidence forms the basis of Latitude's pleading about Representations relating to BreakFree's Status as Manager. For Thompson, the effect of comments made by BreakFree during the meeting was to reassure him that BreakFree did not wish to undertake development and that it was not in BreakFree's commercial interests to do so. Frawley and Smith disputed that anything was said about BreakFree excluding itself from undertaking development. When cross-examined on this issue, Thompson clarified that BreakFree's preference was to undertake resort management not development, that this was related to market perception, but not that it would never in any circumstances undertake resort development. Relevant matters included the requirement that BreakFree approve the appointment of the builder and the content of building contracts for the construction of Stages 3 and 3A; that consultants appointed by Latitude for the purpose be approved by BreakFree (cl 8.12); the requirement that BreakFree consent to any change in the specifications or quality of building materials for the apartments (cl 8.5); that BreakFree have " sole discretion" to proceed (unilaterally) with tasks necessary to progress the development (the preparation of working drawings, the tender process and the appointment of consultants) pending the satisfaction of the conditions precedent contained in cl 2.1 (cl 10.2); that BreakFree had responsibility for commencing improvements to the Guest House prior to 30 August 2004 (cl 10.4) and a common intention to co-operate to " expedite the completion of construction ... of the Stages 3 and 3A Apartments " pursuant to the agreed timeframes and scope set out in the Design and Construction Programme (cl 11). Though private contractual negotiations involving a corporation in trade or commerce may support a claim for a breach of s 52 of the TPA, it is important to distinguish infringing conduct from representations that are apposite to "sharp commercial practice" or made in the course of parties bargaining at arm's length: Rhone --- Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 at 490; Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 475; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 (per Black CJ); at 40-41 (per Gummow J); Poseidon Ltd v Adelaide Petroleum NL Ltd (1992) 105 ALR 25 at 26 and Australian Competition and Consumer Commission v Oceania Commercial Pty Ltd [2003] FCA 1516 at [196] - [201] . The relationship between Latitude and BreakFree was that of vendor and purchaser, bargaining at arm's length. In these circumstances, there cannot be said to have been any expectation on either side that BreakFree would not reserve its rights to undertake development, either in relation to the Erskine on the Beach Project or other projects. This is reinforced by the evidence outlined above. Similarly, any non-disclosure by BreakFree about its commercial intentions should a long form contract not be struck with Latitude cannot be construed as misleading or to have misled Latitude. 196 Representations about the existence or scope of contractual terms may constitute " conduct " for the purposes of s 52 of the TPA. Having concluded that the parties agreed to a mutual giving up of the Deposits Condition Precedent, Frawley's ' conduct ' in seeking to rely on the Deposits Condition Precedent comprised a " refusal to ... give effect to a provision of the HofA " for the purposes of s 4(2)(a). Accordingly, I would have been satisfied that Latitude was entitled to recover damages from BreakFree and Frawley in relation to this issue. However, given the conclusions I have reached in relation to Latitude's contractual claims, it is unnecessary to address this issue further. (It was not suggested that any larger relief would be awarded under the TPA from the relief available at common law). 198 Clause 13 was specific to Stage 4 whereby it was agreed that Latitude would acquire the "development rights for the refurbishment of the Guest House. . .to be known as the Stage 4 development" . The Stage 4 Assets were not included in the definition of Development Assets relating to Stages 3 and 3A under the HofA. Significantly, the transfer of the Stage 4 Assets was not (specifically or practically) contingent on satisfaction of the condition precedents contained in cl 2. 199 Negotiations for the terms and conditions relevant to stage 4 were less advanced than those relating to Stages 3 and 3A with only the price being agreed under the HofA. The parties will use reasonable endeavours to negotiate in good faith and finalise the agreement for the Stage 4 development to be incorporated in the Long Form Contract or in a separate agreement. At the time of the negotiations of the terms of the HofA, negotiations for Stages 3 and 3A were sufficiently advanced to support the assertion in cl 3.1 that " [BreakFree and Latitude] have reached finality in agreeing to the terms set out in the HofA ". The same cannot be said about the terms and conditions relating to the Stage 4 Assets. Unlike the Development Assets for Stages 3 and 3A, BreakFree and Latitude had not identified any term, other than the purchase price, which could then be stated let alone restated in a long form contract. The conditions precedent did not constrain the parties' negotiations in relation to Stage 4 Assets other than the expectation that the Sale of Share and Assets agreement be completed, in the circumstances, by 13 August 2004 (see cll 2.1.1 and 2.2.1 of the HofA and [43] above). 201 Nothing the parties did or omitted to do in relation to the Stage 4 Assets supported a claim for damages unless it concerned an argument of lack of good faith in negotiations, which had not and were not required to have progressed substantially by the end of August 2004. Even if there had been a lack of good faith, it was not pleaded. Damages were agreed. Accordingly, there will be judgment for Latitude (the Applicant) against BreakFree (the First and Second Respondents) in the sum of $4,800,000 together with interest calculated from 30 June 2006 at the rate applicable under Order 35 Rule 8 of the Federal Court Rules . 203 In relation to the question of costs, BreakFree should pay Latitude's costs of the proceeding. The Third and Fourth Respondents were not separately represented. There should be no order dealing separately with their costs. I certify that the preceding two hundred and three (203) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon . | whether validly terminated if not, whether repudiation if so, whether other party ready, willing and able to carry out contract express term required parties' negotiations to be undertaken in good faith whether term certain duty of good faith misleading or deceptive conduct whether representations made by respondents were misleading or deceptive contract contract trade practices |
Ultradrilling issued seven invoices to West for that work totalling $345,983.00. On 13 March 2008, Ultradrilling issued an amended statement of account for $333,036.00. West paid $102,507.00. The balance, $230,529.00, was the amount sought by Ultradrilling in a statutory demand dated 9 May 2008 with an accompanying affidavit dated 9 May 2008 ("the Statutory Demand"). 2 On receipt of the Statutory Demand, West paid $75,132.00 and applied to set aside the balance of the Statutory Demand ($155,397.00) on two grounds in s 459H(1) of the Corporations Act 2001 (Cth) ("the Act"): (1) there was a genuine dispute about the existence or amount of the debt (as to $47,916.00); and (2) West had an "offsetting claim" (in the sum of $120,420.00). 3 On 18 July 2008, pursuant to s 459H(4) Registrar Hetyey varied the Statutory Demand to $57,339.00, having accepted that there was a genuine dispute as to $47,916.00 and offsetting claims to the value of $50,142.00. West now applies to the Court to review that decision pursuant to s 35A(5) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act "), contending that the Registrar erred in rejecting the balance of its offsetting claim, the acceptance of which would require setting aside of the Statutory Demand in its entirety. 4 As these reasons for decision will demonstrate, the Statutory Demand must be set aside in its entirety under s 459H(3) of the Act on the grounds that there is a genuine dispute about the existence or amount of part of the debt and in relation to the balance of the debt, West has offsetting claims which exceed the amount of that debt. 6 The function of the Court, on review of a Registrar's decision under s 35A(5) of the Federal Court Act , is to rehear the case and decide the facts for itself. It is a hearing de novo. That is to say, it is a complete rehearing at which the parties may adduce further evidence. It is for the Court to be satisfied of the matters prescribed by the Act and to exercise the discretion unfettered by the decision of the Registrar. The cases that make good those propositions include: Mazukov v University of Tasmania [2004] FCAFC 159 at [22] - [27] ; and Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 at [6] and [12] and Callegher v Australian Securities and Investments Commission (2007) 239 ALR 749 at [46]. 7 The principles to be applied by the Court in determining an application to set aside a statutory demand are also not in dispute. The Court must be satisfied that there is a genuine dispute between Ultradrilling and West about the existence or amount of the debt to which the demand relates: s 459H(1)(a) of the Act . That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . For a genuine dispute to exist, the dispute must "be bona fide and truly exist in fact". The grounds for alleging the existence of a dispute must be "real and not spurious, hypothetical, illusory or misconceived": Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452 at 464; see also John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253 and TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70 ; (2008) 66 ACSR 67 at 79. 8 The manner in which the Court approaches the task is also not in dispute. The Court does not resolve contested questions of fact or determine where the merits lie in any contest: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556 at [40] . The Court determines only whether the supporting affidavits filed and served by West depose to facts from which the Court is able to conclude that a genuine dispute exists. As Young J said in John Holland Construction 14 ACSR at 253, something between mere assertion and the proof of the existence of the disputed debt is required: see also Micha International Pty Limited v Jong Seol Lee [2008] NSWSC 921 at [5] and Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 at [23] . 9 The test to be applied in determining whether an offsetting claim exists is the same as that applied in ascertaining the existence of a genuine dispute: TR Administration Pty Ltd 66 ACSR at 79. West in turn had been hired by head contractor Macmahon Contractors Pty Ltd ("Macmahon"). The Statutory Demand issued by Ultradrilling claims an amount that is said to represent the balance due to it from West for the drilling work done pursuant to the contract. The genuine dispute alleged by West is whether certain amounts are in fact payable and owing under the contract; the offsetting claim is for losses said to arise out of Ultradrilling's breach of the contract due to its delay in completing the work. $18,634, being Ultradrilling's claim for "other standby" charges. I propose to deal with each amount separately. 6 Hours/Day) (Emphasis added. At that time, there was no dispute that Ultradrilling was obliged to supply the run casing and gravel packs. However, West did dispute that Ultradrilling was entitled to claim the additional cost for transporting the run casing and gravel packs from the storage areas to the drilling holes. In its letter of 15 February 2008, West described it as one of the "non-approved charges" by Ultradrilling. 15 As West's letter of 15 February pointed out, Ultradrilling was engaged to drill bore holes. West contended that to do that involved bringing the necessary equipment from the storage area to the hole sites and laying the equipment. That is, West disputed that the carting of goods from a storage location to a site was an additional cost entitled to be claimed by Ultradrilling. The italicised terms of the Purchase Order (see [13] above) provide objective evidence that there is a genuine dispute, for the whole of the amount of $21,659, about whether Ultradrilling was entitled to charge separately for transporting the run casing and gravel packs from the storage areas to the drilling holes. 16 Before leaving this item, it is important to recall that Ultradrilling accepted there was a genuine dispute in relation to this item but limited to $8,712. Consistent with the authorities (see [8] above) and the view I have expressed in paras [14] and [15] above, it is neither necessary nor appropriate to seek to reconcile the invoices issued by Ultradrilling to resolve the quantum of the amount in fact in dispute. It is the entitlement of Ultradrilling to in fact charge separately for the whole of the run casing and gravel pack "additional cost" of $21,659 which is the genuine dispute. The amount was calculated on the basis that the time taken by the workers to sign in and out each day was half an hour. Ultradrilling conceded that the Statutory Demand should be reduced by this amount. West disputed Ultradrilling's entitlement to claim this amount on the grounds that the standby arose because of problems caused by Ultradrilling "that required the new or further instructions". 19 One of the variation items identified on the Purchase Order (see [13]) above) was "Standby rate awaiting per instructions: AUD $220/Hour". In other words, West accepted that if a contractor specifically requested the subcontractor to standby pending further instructions, the subcontractor was entitled to charge an hourly rate but argued that the rate was not able to be claimed where the subcontractor had itself caused the problem which necessitated the need for further instructions. 20 Mr Stephen Mark West, a director of West, identified four incidents --- Ultradrilling's alleged failure to perform work to correct specifications, the incident of spoil entering the lake and two purported breaches of safety requirements --- which he alleged gave rise to the need to place Ultradrilling on standby pending further instructions and that each incident was caused by Ultradrilling. 21 Counsel for Ultradrilling submitted that when the invoices identifying claims for "other standby" were analysed, it was apparent that many of the 31 claims over a period of three to four months could not have been caused by the actions of Ultradrilling and that, at best, only a few hours could said to result from the actions of Ultradrilling. That is to say, Ultradrilling's counsel conceded for the purposes of argument in this case as to whether the Statutory Demand should be set aside (but not for the purposes of any substantive claim or counterclaim in a future proceeding for breach of contract) that "under the contract if the standby is caused by the actions of [Ultradrilling], then it is not chargeable" and thus the assertion about Ultradrilling being the cause of the need to standby was sufficient to give rise to a genuine dispute as to whether some part of the "other standby" amount was in fact chargeable and owing. In other words, Ultradrilling accepted that the assertions and evidence supplied by Mr West in his affidavit might be sufficient to establish a genuine dispute, but argued that the amount of the genuine dispute was not the full $18,634 but instead some lesser sum of money which West had failed to particularise. 22 I reject Ultradrilling's "failure to particularise" contention on a number of bases. First, it cannot be said that when Mr West identified incidents allegedly caused by Ultradrilling and giving rise to the need to place Ultradrilling on standby pending further instructions, he was purporting to give a complete list. So much is made clear by the language of para [12] of his affidavit of 29 May 2008. Secondly, it is apparent from the contemporaneous correspondence before the Court that Macmahon itself attributed delays on the Project to what it described as "lack of production" by Ultradrilling. In those circumstances and having regard to the nature of the incidents identified, it is neither possible nor appropriate for a Court in a proceeding of this nature to seek an exhaustive list of each incident, determine its cause, and then ascertain the time and cost of any such delay. There is objective evidence that there is a genuine dispute about whether Ultradrilling was entitled to charge separately for "other standby" for the whole of the amount of $18,634. Put another way, contrary to the submissions of Ultradrilling, it cannot be said that the dispute as to the whole of the amount is a "patently feeble legal argument or an assertion of facts unsupported by evidence": Rhagodia Pty Ltd v National Australia Bank Ltd (2008) 67 ACSR 367 at [93] (internal citation and quotation marks omitted). There is "sufficient prima facie plausibility to merit further investigation" as to the truth of the assertion: Rhagodia at [93] (internal citation and quotation marks omitted). $70,278 for other delay costs incurred by West. 24 Before turning to consider these amounts, it is necessary to say something about the general nature and alleged cause of the offsetting claims. There is no dispute that the Project was delayed. As noted earlier, what is in dispute is the cause of the delays and, having determined the cause, the precise costs resulting from those delays and their recoverability under the contract (i.e. whether the delays constitute breaches of one or more terms of the contract). Some of the costs said to arise from the delays I have already considered (see [18] to [22] above). 25 West argues that Ultradrilling was the cause of Project delays and that the amounts specified by West are the costs attributable to those delays. There is, on any view, sufficient objective evidence to establish a prima facie allegation of delay on the part of Ultradrilling. That evidence includes, but is not limited to, a letter from Macmahon to West dated 7 February 2008 which not only referred to the fact that delays had been incurred on the Project as a result of the lack of production by Ultradrilling but attached what was described as a "delay schedule". The schedule set out a series of dates and the time lost and the "[r]eason for the [d]elay" in relation to those specific dates. The delays listed on the schedule totalled 256 hours; Mr West in his 29 May affidavit alleged that the Ultradrilling delays effectively amounted to 27 working days. The schedule's "reason for the delay" column included items such as "Driller left at midday due to sickness --- smelt of alcohol", "Finished at 2:00pm", "Not on site", "[D]idn't arrive until 11", and "Driller left early". 26 This objective evidence raises a number of issues, including: (1) whether the cause of each delay recorded on each date was as described; (2) whether the delays were a result of Ultradrilling's conduct; (3) if so, the precise number of hours of and costs attributable to each delay; and finally, (4) the basis on which West is entitled to recover all or part of those costs from Ultradrilling. 27 In oral submissions, counsel for Ultradrilling appeared to accept the existence of a genuine dispute as to the first three issues - that is, whether there were delays, who caused them, and the amount of the costs resulting. Counsel nevertheless submitted that these offsetting claims based on delay should be rejected because the contract between Ultradrilling and West contained no express stipulations about time for completion of the contract and that any legal argument in favour of there being an implied term or terms in the contract covering all of the delays set out in the schedule to the letter dated 7 February 2008 (see [25] above) was "patently feeble". I reject Ultradrilling's contentions. 28 There is sufficient objective evidence to establish a prima facie allegation of delay on the part of Ultradrilling caused by its own conduct. It is important to note that Ultradrilling's contentions proceeded not on the basis that there could be no implied term relating to time but that the legal argument there existed one or more implied terms covering all of the instances set out in the schedule to the letter dated 7 February 2008 was "patently feeble". That contention is understandable. However, the evidence before the Court on these issues (including the terms of the contract) is not exhaustive: cf TR Administration 66 ACSR at 81-82. Indeed, what evidence was before the Court suggested that there was in fact no formal, integrated written contract, but instead a series of emails, purchase orders, and invoices, including the Purchase Order partially set out above. 29 Particularly in those circumstances, the nature and extent of any implied term is not necessarily a straightforward issue. It would first require consideration of the express terms of the contract, which in the absence of an integrated written contract would themselves have to be discerned from the various correspondence, documents, and possibly oral evidence. The exercise would also no doubt require consideration of the relevance and application of the principle of construction that in particular types of commercial contracts, punctual performance and reasonable diligence may be implied conditions of the contract: see e.g. I Bailey, "Construction Law in Australia" (2 nd ed 1998) at 122-25; 5 Bruner & O'Connor on Construction Law (2008) s 15:17. In short, while some or maybe even all of West's delay claims may ultimately fail, they present issues which cannot be and should not be resolved in this application by what would amount to a mini-trial on the underlying contract claim. Such issues must instead await any substantive breach of contract proceeding. 30 For present purposes, I am satisfied that an offsetting claim with sufficient prima facie plausibility to merit further investigation does exist. It now remains only to consider the amount of that claim, and whether it is such as to justify the setting aside of the Statutory Demand. For that, I turn to examine the three components said by West to constitute the offsetting claim. Mr West alleged that, as a result of the delays, West needed to employ four staff, including himself, for five weeks longer than required, with associated accommodation costs for those staff who were not located in the Australian Capital Territory. The names of the staff, together with their hourly rate, the hours worked and the total claim amount, were set out in Mr West's 29 May 2008 affidavit. A claim of this nature was first raised by Mr West with Ultradrilling in his letter of 15 February 2008, to which I have already referred (see [14]-[15]). Having regard to the matters referred to in [25] and [26] above and the contents of Mr West's affidavit, there is a genuine offsetting claim of sufficient factual particularity in relation to this amount. It is not an additional cost incurred by West but a claim made by West against Ultradrilling. Counsel for Ultradrilling submitted that the objective evidence discloses that there was in fact no short payment but a delay in the payment, for an unspecified period of time, from Macmahon to West. It is therefore necessary to consider that objective evidence to determine whether or not it establishes a prima facie offsetting claim of the nature and size described. 33 The starting point again is the letter of 15 February 2008 from West to Ultradrilling (referred to at [14] and [15] above). It listed one of West's claims against Ultradrilling as a "short payment from Macmahon as a result of delays" of $31,990. The objective evidence establishes that West settled its own contract dispute with Macmahon on terms that required it to forgo claims totalling $100,000. It is by no means clear whether: (1) the $31,990 allegedly withheld is, in fact, part of the $100,000 that West had to forgo as part of its settlement with Macmahon; and (2) if so, the amount is recoverable under the West-Ultradrilling contract as consequential damages. In the end, however, the issues raised in paras [28]-[30] above are again directly relevant to the Court's consideration of this aspect of the claim. There is a genuine offsetting claim in relation to this amount. The merits of that claim are to be determined in another forum. 35 This component was rejected by the Deputy Registrar on the grounds that there "[was] simply no evidence (credible or otherwise) before the [C]ourt to explain how this offsetting claim [was] said to arise". As a result, on review West filed additional affidavit material (as it was entitled to do) from Mr West seeking to rectify that problem. That evidence was described as disclosing "the actual costs associated with the delay caused by [Ultradrilling] and not otherwise covered by the claims permitted by the Deputy District Registrar". The period also required the retention of a compressor. In that period the engineers and the pumps could have been employed on other projects. If so employed [West] would have recovered approximately a further 30% on the costs as a profit. During the delay some 29 pumps were idle. If the pumps were used elsewhere they would usually be rented out at $110 per day (each day not just working days). If rented out, [West] would incur costs of about 50% of the rent recovered. In any event, Ultradrilling contends that the evidence now provided does not rise above mere assertion and should be rejected on that basis alone: see Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560 at [18] - [19] and TR Administration 66 ACSR at 79-80. Ultradrilling focused, in particular, on the charges for "lost mark up" and the "lost profit" on the pumps (see [35] above). Ultradrilling contended that if, as was required, a line was drawn to distinguish between evidence that was merely spurious, bluster or assertion and evidence which provided sufficient factual particularity to exclude the merely fanciful or futile, the offsetting claim would be dismissed: TR Administration at 79-80. 38 I reject this submission. What this application has demonstrated is that the terms on which West engaged Ultradrilling to drill bore holes and the manner in which Ultradrilling completed that work is the subject of dispute. Those issues cannot be resolved and should not be resolved in the present application. Moreover, it must be recalled that West is not required to establish the precise dollars and cents or provide a fully evidenced claim: Elm Financial Services at [19]. 39 Secondly, the bases on which Ultradrilling contends that charges for "lost mark up" and the "lost profit" on the pumps are spurious cannot be accepted. "Lost mark up" was criticised by Ultradrilling on the grounds that "[t]he sense in which this amount was 'lost' [was] unexplained. " However, that loss was explained. In Mr West's additional affidavit and accompanying spreadsheet (see [35]-[36] above), it was described as the margin which West would have received on the engineer's labour - that is, the difference between the rate charged to the client and the rate actually paid to the engineer. Whether such loss is recoverable from Ultradrilling and if so, whether 30% is the correct rate to apply in calculating the loss, are issues to be determined in other forums. The other loss, the "lost profit" component, was challenged by Ultradrilling on the basis that because the pumps were said to be custom-built for the Project, there could be no "usual practice" for renting the pumps and it was not plausible to assume that each of the pumps, if not required on the Project, would have been immediately rented out for the whole period to a third party at $110 per day. Again, those are issues that will need to be resolved in another forum. 40 In the present case, it cannot be said that the evidence was merely spurious, bluster or assertion. The evidence ultimately provided by West provided sufficient factual particularity to exclude the merely fanciful or futile. Whether West will succeed at any trial of the issue is irrelevant. In the circumstances, the appropriate orders are that the Statutory Demand be set aside under s 459H(3) of the Act and that Ultradrilling pay West's costs of and incidental to the application, both before the Registrar and this Court, such costs to be taxed in default of agreement. 42 In view of those orders, it is unnecessary to separately consider setting aside the Statutory Demand on one or more of the grounds set out in s 459J of the Act . I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | statutory demand application under s 459h of the corporations act 2001 (cth) to set aside whether genuine dispute as to existence or amount of debt or off-setting claim. review of a registrar's decision applicable principles whether further evidence may be adduced whether grounds of review limited weight of registrar's decision. "genuine dispute", "offsetting claim". corporations practice and procedure words and phrases |
Unlike s 596B of the Corporations Act , the Court does not have a discretion as to whether to order that an examination summons should issue. The distinction is of some importance because the range of persons who are eligible to be examined pursuant to an application made under s 596B is considerably wider than those who may be examined pursuant to an application made under s 596A. In support of the application made under s 596A , the applicant relies upon an affidavit of Ms Kazi Mai Lyn Klopper which annexes a company search of Firepower Operations Pty Ltd. The liquidator of a company in liquidation is an "eligible applicant" for the purposes of s 596A. The company search discloses that Mr Bryan Kevin Hughes was appointed the Liquidator of Firepower Operations Pty Ltd on 4 August 2008, and continues to act in that capacity. I am satisfied that he is an eligible applicant under s 596A. I am also satisfied on the basis of the information in the company search that Mr Johnston was a director, and therefore, an officer, of the company at the time its winding up began. He is, therefore, a person to whom s 596A(b)(iii) applies. In those circumstances, I am prepared to make the orders for the issue of an examination summons to Mr Johnston. In my view, however, the examination summons should be returnable as soon as practicable. On that basis, I will order that the examination summons be returnable before a Registrar of this Court at 10:15 am on 26 November 2009. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | application for issue of examination summons under s 596a of the corporations act 2001 (cth) corporations |
For an order nisi to issue it is necessary for the applicant to demonstrate that he has an arguable case for the final relief sought by him. This matter has been referred to this Court by order of the High Court of Australia. The Court has decided to proceed ex parte on the basis that O 51A r 5(1) of the Federal Court Rules does not apply (see O 51A r 5(2)). 2 The applicant's claim to be entitled to a protection visa was rejected by the Tribunal for reasons which overwhelmingly related to his credibility. 3 The Tribunal accepted that the applicant is an Ahmadi from Bangladesh notwithstanding that he had travelled to Australia on an Indian passport. It accepted independent evidence, which it set out in its written reasons for decision, that although there were isolated instances in the early 1990s when Ahmadi institutions in Bangladesh were attacked by fundamentalists, attacks have ceased as the Government had made clear that it would not accept them. The Tribunal found that Ahmadis are free to practice their religion openly and find it no bar to achieving high status in life. The Tribunal rejected the applicant's claim that he was subject to persecution in Bangladesh for being an Ahmadi or for having married into an Ahmadi family. 4 The Tribunal was not satisfied that the applicant's particular claims regarding adultery accusations, having a grenade thrown into his house, being beaten and being falsely charged with smuggling were credible. It found that he was prepared to invent scenarios to suit his convenience noting, by way of support, that he had admitted being untruthful with both the Indian and Bangladeshi authorities and had made, but when challenged not persisted with, an unsustainable claim before the Tribunal. ... I am not satisfied that he has a well-founded fear of persecution for the reasons he claims in Bangladesh. I am of the opinion that he came to Australia for reasons other than a need to seek protection from persecution. The letter inviting him to attend a Tribunal hearing asserted that the Tribunal had looked at all of that material. The material, as listed in Part B of the record of the decision made by the Minister's delegate, was constituted by the Department's file, certain DFAT cables, DFAT's country profile for Bangladesh dated July 1994, certain reports and briefing papers on Bangladesh and Professor Hathaway's treatise on the Law of Refugee Status . The applicant asserts that, as a consequence of being misled into thinking that the Tribunal had that material, he 'did not take steps to bring to its attention those parts of the documents or other similar material which favoured [his] claim. Equally importantly the applicant has not identified any aspect of the relevant publications, or other material in existence at the date of the Tribunal's decision, which he would have brought to the Tribunal's attention had he not received the Tribunal's letter. 8 The Tribunal's decision was not founded on any of the material listed in Part B of the record of the delegate's decision. The independent country information upon which the Tribunal relied in reaching its decision was, with one minor exception, published after the date of the decision of the delegate. The applicant has not suggested that the substantive content of this material was not drawn to his attention during his Tribunal hearing. 9 At the hearing of this application the applicant has placed before the Court material concerning the situation of Ahmadis in Bangladesh which post-dates the Tribunal's decision. This material does not provide any support for the applicant's claim to have been denied procedural fairness by the Tribunal. Nor does it otherwise suggest error affecting the decision of the Tribunal. I have refused a request from the applicant to give him further time to find supporting material. Bearing in mind that his application to the High Court was filed on 21 May 2003 I am satisfied that the applicant has had more than sufficient time to gather together material he wishes to rely on to support his application. 10 Nor do I accept the applicant's submission that his case should be reheard by the Tribunal because he did not feel especially well in front of the Tribunal and was not in a good condition to put his case to the Tribunal. This issue is not identified in his application or either of his affidavits. I am not satisfied, in any event, that any error has been shown to affect the Tribunal's decision to proceed with its hearing when it did. The Tribunal, which had previously adjourned a hearing to suit the applicant's convenience, noted that the applicant had a cold and made allowance for his illness. The orders nisi sought by this application are refused. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | tribunal refused to grant a protection visa to the applicant application for an order nisi requiring refugee review tribunal and minister for immigration and multicultural affairs to show cause why relief by way of constitutional writs and injunctions should not be granted whether applicant had an arguable case for final relief whether applicant denied procedural fairness because tribunal did not look at all of the material relating to his application whether matter should be reheard by tribunal because applicant was ill in front of the tribunal held: no evidence that tribunal did not look at all material relating to applicant's application applicant did not establish an arguable case for the issue of an order nisi migration |
On 4 August 2009 Finkelstein J made a number of orders including the following: By 14 August 2009, the second-cross respondent (ASIC) make discovery to the fourth defendant and the cross-claimants of any reports of investigations prepared by ASIC pursuant to sections 16 or 17 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) in relation to its investigations into the Westpoint Group (as defined in the plaintiff's statement of claim) carried out between 1 January 2003 and 31 December 2005. In its list of documents ASIC discovered no documents under par 1 of the order of Finkelstein J. In an affidavit affirmed on 2 November 2009 Louise Anne Macaulay, a lawyer employed by ASIC, set out the basis upon which ASIC claimed that the documents were privileged from production on the ground of legal professional privilege. ASIC's claim was based upon two categories. In addition, ASIC reserves its rights in relation to claims for Public Interest Immunity in relation to these portions of the documents. The fourth respondent and the cross claimants criticised Ms Macaulay's explanations in this respect and submitted that an insufficient basis had been established for making the claim for legal professional privilege in respect of the masked sections of the documents. I accept that in order to justify a claim for protection from production of documents on the ground of legal professional privilege a party has to do more than simply utter the litany "legal professional privilege". I am satisfied that ASIC has done more than simply utter that litany although in a number of respects the stated basis for the claim was lacking in particularity or detail. Nevertheless, I am satisfied that ASIC has disclosed a sufficient basis for maintaining a claim for legal professional privilege which requires me to examine the documents myself and satisfy myself whether the claim has been properly based and should be upheld. In the course of his submissions, Senior Counsel for the fourth defendant and the cross claimants submitted that two broad issues arose, namely: were the masked portions irrelevant? had ASIC discharged the onus of asserting and proving privilege? There is substance in that submission. The documents may be relevant, that is they may relate to the decision of ASIC to make the application referred to in par 2 of Finkelstein J's order notwithstanding that they do not contain any references to "the actual financial position of the Westpoint Group or any of its members", as deposed to by Ms Macaulay. In any event I not bound by Ms Macaulay's explanations in relation to the masked sections or by her characterisation of them. The parties agreed that it was for me to determine whether the claims for masking the sections of the documents on the basis of irrelevance or legal professional privilege should be upheld or rejected. I have considered the masked sections of the discovered documents and approached the issue whether the claim for legal professional privilege should be upheld on the basis of the authorities and principles referred to by Senior Counsel for the fourth defendant and the cross claimants. I have not considered the issue of relevance by reference to whether the masked sections contain any reference to "the actual financial position of the Westpoint Group or any of its members". Rather, I have considered the issue of relevance more broadly and whether the masked sections contain material which refers to investigations and considerations of the solvency of the Westpoint Group which had a connection with or bore upon ASIC's decision to apply to the Court to wind up the two companies. I have set out in the annexure to these reasons my conclusion and finding in relation to each masked section. The fourth defendant and the cross claimants did not challenge those sections marked with the annotation "R1". The page numbers in the annexure refer to the pagination adopted by the fourth defendant and the cross claimants in their annotation of Annexure DJH-20 to the affidavit of Daniel Joseph Hirsch sworn 23 September 2009 which I have cross-referenced to the page number of each individual document. I will hear the parties as to the form of order that should be made consistently with these reasons. I would propose that in relation to each masked section in respect of which I have rejected ASIC's claim that there be an order that ASIC produce to the fourth defendant and the cross claimants copies of those documents in respect of which ASIC's claim has been rejected without the masking of those sections. I will hear the parties as to the appropriate order as to costs which should be made. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | discovery redaction legal professional privilege irrelevance. practice and procedure |
I propose to reject the totality of both affidavits in their current form. I have had argument before me as to the admissibility of expert evidence in professional cases. That may not be the correct focus of debate for the admissibility of this evidence. I say that because although there is an explicit, or implicit, assertion in the pleadings by the applicants that the first respondent has failed to take into account properly the interests of creditors at the time of the composition meetings, and although that matter can be seen as a question of professional standards, the structure of the claim and of the proceeding is founded significantly, though not wholly, on the operation of s 178 of the Bankruptcy Act 1966 (Cth). 2 Section 178 of the Bankruptcy Act is in wide terms giving power to the court to make such order as it thinks just and equitable, in effect in review of decisions by the trustee in the course of the administration. That undertaking and that inquiry may be quite a wide one and the boundary of what is evidence of relevance to that inquiry and the making of orders, consequent upon such inquiry, can be seen to be much wider than the admissibility of evidence as probative and in conformity with the Evidence Act 1995 (Cth) in a professional negligence case. Nevertheless, the debate that took place before me was of assistance in reaching my conclusion on either basis; that is, the basis of a professional negligence action and a wider s 178 action. 3 Without going through the affidavits in detail, they contain evidence which can be summarised as evidence in which Mr Hamilton says what a prudent trustee would have done and evidence as to what he would have done. There is a body of authority, best illustrated by the judgment of Austin J in Australian Securities and Investments Commission v Vines (2006) 58 ACSR 298 which rejects evidence in professional negligence cases where the expert evidence does not direct itself to the developed practice amongst competent professionals. His Honour referred to Permanent Trustee v Boulton (1994) 33 NSWLR 735, and also the well-known case of Midland Bank v Hett Stubbs and Kemp [1978] 3 All ER 571. 4 The evidence in the two affidavits is sufficiently muddled, if I may say so, without disrespect to Mr Hamilton, not to be of real utility. If what Mr Hamilton is seeking to say is that in his view no competent professional could ever have taken the steps that were taken by Mr Thomas, the evidence may not be admissible on those authorities by reference to the test of admissibility in a professional negligence case. I reserve the question as to whether that evidence would be admissible in a s 178 inquiry, such as the present. It may be that what he is saying, however, is that he would have done it in a particular manner. If that is all he is saying, that does not mean that no prudent trustee would have undertaken the steps that Mr Thomas did. 5 Taken from a professional negligence case standpoint, that evidence is irrelevant if the issue is the standard of care of the professional in question, because all that has been proved is what one person in the profession would have done, not what no one, properly informed, could have done. That said, again, I would reserve the position as to whether that evidence was admissible for an inquiry under s 178 of the Bankruptcy Act . I would also reserve the question of the operation of the discretionary exclusionary provision being s 135 of the Evidence Act 1995 (Cth). If other evidence is to be brought forward in proper form, I will deal with that at the time. For now I simply reject the affidavits of William James Hamilton of 17 and 18 July 2007 and they will be marked for identification, MFI 1 and MFI 2 accordingly, in case there is any debate about this issue on another occasion. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. | expert evidence enquiry under s 178 of the bankruptcy act 1966 (cth) evidence |
For the reasons which follow, after a consideration of the evidence before me on this rehearing, I have come to the view that the allotment was not for an improper purpose and was made bona fide in the best interests of Life Therapeutics Limited ('LFE'). Contrary to the contention of the plaintiff, I do not accept that the allotment of shares was done to defeat any perceived predator or to consolidate the collective position of the directors of LFE. Before the allotment of the shares in issue in this proceeding, LFE had issued 123,223,857 shares with voting rights. 3 Between 14 May and 4 June 2008 Bell IXL Investments Limited ('Bell IXL') acquired 9,517,734 shares in LFE. Bell IXL's shares in LFE together with those of its associate, K Pagnin Pty Limited (3,018,000 shares) ('K Pagnin'), comprised approximately 10.17% of the issued capital of LFE. 4 On 23 May 2008 Bell IXL requisitioned LFE to convene an extraordinary general meeting of shareholders to consider resolutions to remove the current board and replace it with three persons nominated by Bell IXL. On 12 June 2008 LFE convened that meeting for 23 July 2008. The meeting has been adjourned as a result of orders of this Court. 5 On 9 June 2008 Aegis Partners Limited ('Aegis') agreed to accept a placement of 15% of LFE's issued shares at 7 cents per share. Aegis informed LFE that clients of Aegis would take 18,483,578 shares at 7 cents per share. On 16 June 2008 LFE announced to the ASX that it had agreed to issue to Aegis 18,483,578 fully paid ordinary shares (representing 15% of its total issued capital) at 7 cents per share. At a board meeting of LFE on 17 June 2008, the directors noted that a subscription application for 18,483,578 shares (to raise $1,293,850.46) had been received from Aegis on 12 June 2008 and resolved to approve that issue and placement. Under the subscription agreement between LFE and Aegis, Aegis could nominate nominees to whom the shares were to be issued. On 4 July 2008 LFE received the subscription amount for the shares and announced to the ASX that the placement to Aegis had been completed. The shares were not allotted to Aegis but rather, in accordance with instructions from Aegis, were allotted to Bell Potter who allocated them to various nominee account holders. On 10 July 2008 LFE announced to the ASX that Aegis had directed Bell Potter to place the shares directly with various beneficial owners. 6 This allotment represented approximately 13.04% of the voting shares in LFE and reduced Bell IXL's interest in LFE's capital to approximately 8.85% (at least as at 4 June 2008). 7 Before the month of May 2008 the directors of LFE had considered a capital raising by the company for a sum between $5 million and $20 million. On a date which was contested between the parties, two of LFE's directors, Messrs Bellman and Milne, met with Mr Booth of Asandas, a licensed stockbroker, to discuss a capital raising by LFE ('the Booth meeting'). Neither Mr Booth nor Asandas was retained as a broker by LFE. The Booth meeting led to a chain of events which resulted in the allotment of the shares in issue on 4 July 2008. 8 Some further background facts about LFE are important to record. LFE is a holding company whose subsidiaries in the United States of America collect and sell blood plasma. LFE's operations became unprofitable during 2006 and 2007, and in the early part of 2008 its financial position was precarious. This historical financial position is important in understanding the approach of the directors, to which I will later return. 10 The result of the arrangement was that, before any sale of LFE's US subsidiaries to Octapharma, LFE would have funds to pay out its creditors leaving it with a balance of loan funds of approximately US$16 million which it could draw down. If the sale of the US subsidiaries were completed, LFE would be required to repay its loan to Octapharma which would leave it with a balance of the order of $17 million or $18 million in cash. However, if the sale of the US subsidiaries were not to proceed because, for example, shareholder approval were not given, then LFE would be required to repay the loan to Octapharma. 11 At the time this arrangement was entered into, the directors of LFE were Mr Wayne Bellman (having been appointed on 14 February 2008), who later became Chairman, and Mr Michael Milne (having been appointed on 13 February 2008). Subsequently, on 5 May 2008, Ms Dale Calhoun was appointed a director of LFE. During the period that these directors were on the board they had few or no staff to assist in the management in Australia, and most of the executive and administrative work had to be done by the directors. Having regard to the financial position of LFE and the nature of the Octapharma transaction, I accept that such work as undertaken by the directors was extensive and I view the evidence in this case against this background. I also accept that the directors in carrying out the executive and administrative tasks did not have a practice of keeping documentation or recording discussions or considerations, otherwise than at board meetings to record the resolutions made by LFE. I also view the evidence in this case against this general practice of the directors. 12 Nevertheless, the directors of LFE did engage a financial adviser, Mr Riddell, who brought about the arrangement with Octapharma. Prior to this arrangement, there had been discussions by the directors about the need to raise finance for working capital in the region of $5-20 million. After the arrangement with Octapharma was entered into, Messrs Bellman and Milne discussed with Mr Riddell the desire of LFE to raise further capital which would allow it to pursue other ventures as an investment vehicle. However, the financial adviser's retainer was effectively terminated in late April 2008, as was LFE's focus on the need for a significant amount of additional capital. 13 Octapharma exercised its call option on 11 April 2008 which required LFE to convene a meeting of shareholders to consider whether they would approve the sale. That meeting has not yet been held. A conjecture may be plausible, but it is effectively still a mere guess. An inference is a deduction from the evidence, and if reasonable can be treated as part of the legal proof to be considered in making a factual determination in any particular proceeding. Whilst sometimes it may be difficult to distinguish between conjecture and inference, nevertheless the distinction is an important one. In this proceeding, some contentions made by Bell IXL were mere conjecture, and were either otherwise explicable or could not be a basis for a determination in favour of finding an improper purpose. 15 Bell IXL in part relied upon a number of objective facts, circumstances, and series of events to support the allegation of improper purpose, it not being privy to the actual discussions and considerations undertaken by the directors of LFE. I have been asked to draw inferences from documentation and from the events themselves. In addition to some specific matters referred to later, the main facts, circumstances and series of events can be summarised as set out below. • On 14 March 2008 the LFE directors' meeting was attended by Messrs Bellman and Milne. They resolved to accept the half-yearly financial report and the directors' report. They further resolved that there were reasonable grounds to believe that LFE could pay its debts as and when they fell due. No minute recorded any expression of concern as to LFE funding its ongoing operations or any need for raising additional capital. ... As stated above the Directors believe there is no reason to doubt that the agreements with Octapharma AG will not be executed and the appropriate shareholder approval will be obtained. • On 18 March 2008 the LFE directors' meeting was attended by Messrs Bellman and Milne. It was resolved to settle with Citigroup Global Markets Australia, $1,149,283.97 to be paid by LFE upon execution of the loan facility from Octapharma. No minute recorded any expression of concern as to LFE funding its ongoing operations or any need for raising additional capital. • On 28 March 2008 the LFE directors' meeting was attended by Messrs Bellman and Milne. It was resolved to approve and execute the Octapharma documents. Again no minute recorded any expression of concern as to LFE funding its ongoing operations or any need for raising additional capital. • Between 1 April 2008 and 20 May 2008 a total of 30,180,148 shares in LFE comprising 24.49% of the shares on issue were traded. • On 31 March 2008 the LFE directors' meeting was attended by Messrs Bellman and Milne. Again no minute recorded any expression of concern as to LFE funding its ongoing operations or any need for raising additional capital. • On 10 April 2008 LFE issued a draw-down notice for the sum of US$37.1m under the Octapharma loan facility. • On 11 April 2008 Octapharma gave a Notice of Exercise of Call Option, the effect of which was that subject to LFE shareholder approval, Octapharma would purchase 100% of the shares in LFE's US subsidiaries. • On 1 May 2008 the first and second series of acquisitions of LFE shares by K Pagnin on 23 and 28 April 2008 were registered. The acquisitions give K Pagnin a total of 1.96% of the issued capital in LFE. The K Pagnin acquisitions were included in earlier registrations of share dealings in the names of the relevant brokers' nominee company. • By email of 1 May 2008 Mr Tom Bloomfield of TMF Corporate Services (Aust) Pty Ltd provided a copy of the Notice of Change of Interest of Substantial Shareholder filed by UBS Nominees Pty Ltd on 29 April 2008 showing a reduction from 8.33% to 5.81% to Mr Bellman. • By email of 1 May 2008 Mr Bloomfield provided a list of LFE top 20 shareholders as at 30 April 2008 to Messrs Bellman and Milne. • By email of 1 May 2008 Mr Bloomfield provided a complete shareholder listing as at 30 April 2008 to Messrs Bellman and Milne. • On 2 May 2008 the third on-market acquisition of LFE shares by K Pagnin occurred. • On 7 May 2008 the third acquisition of LFE shares by K Pagnin was registered. The acquisition gave K Pagnin a total of 2.03% of the issued capital in LFE. • On 14 May 2008 Bell IXL made its first two acquisitions of LFE shares. • On 15 May 2008 Bell IXL made its third acquisition of LFE shares. • On 19 May 2008 the fourth and fifth acquisition of LFE shares by K Pagnin occurred. • On 19 May 2008 the first two acquisitions of LFE shares by Bell IXL were registered. The acquisitions gave Bell IXL 0.67% of the issued capital in LFE. The Bell IXL acquisitions were included in earlier registrations of share dealings in the names of the relevant brokers' nominee company. • On 20 May 2008 the LFE directors' meeting was attended by Ms Calhoun and Messrs Bellman and Milne. No minute recorded any expression of concern as to LFE funding its ongoing operations or any need for a raising of additional capital or any proposal to meet with Mr Booth for this purpose. Item 14 of the minutes recorded a draw-down of US$1 million under the Opex agreement, primarily to pay wages. • On 20 May 2008, after the board meeting, the Company Secretary of LFE was asked to obtain a list of significant share movements between 1 April 2008 and 30 April 2008. • The Computershare Significant Movements Monthly report for LFE for 1 to 30 April 2008 was received by each of the directors at 3.16pm on 20 May 2008. • On 20 May 2008 the sixth on-market acquisition of LFE shares was made by K Pagnin. The fourth, fifth and sixth on-market acquisitions of LFE shares were made by Bell IXL. • On 21 May 2008 the third acquisition of LFE shares by Bell IXL was registered. The acquisition gave Bell IXL a total of 2.97% of the issued capital in LFE. • By email of 21 May 2008 Mr Bloomfield provided a copy Notice of Ceasing to be a Substantial Shareholder relating to MM&E Capital to Messrs Bellman and Milne and Ms Calhoun. The Notice disclosed a sale of 3,580,000 shares on 20 May 2008. • On 22 May 2008 the fourth and fifth acquisitions of LFE shares by K Pagnin were registered. The acquisition gave K Pagnin a total of 2.16% of the issued capital in LFE. • On 23 May 2008 Bell IXL lodged a Notice of Initial Substantial Shareholder with the ASX. It showed that Bell IXL together with its associate K Pagnin acquired 8.75% of the issued capital over a month. Bell IXL also requested a general meeting and gave notice of its intention to replace the directors of LFE. • On 26 May 2008 the fourth, fifth and sixth acquisitions of LFE shares by Bell IXL were registered. The acquisition gave Bell IXL a total of 6.3% of the issued capital of LFE. • On 27 May 2008 the sixth acquisition of LFE shares by K Pagnin on 20 May 2008 was registered. The acquisition gave K Pagnin a total of 2.32% of the issued capital in LFE. • On 3 June 2008 at 9.30pm Mr Waller sent Mr Booth an email stating 'Let's do it boss'. • On 4 June 2008 Messrs Bellman and Milne met with Mr Booth at Asandas' office. There was a teleconference with Mr Waller. The prospect of Aegis engaging in further equity funding of LFE was discussed. Mr Waller then recommended taking the 15% placement in LFE to Aegis. • On 5 June 2008 Messrs Bellman and Milne met with Mr Booth at Asandas' office. • On 9 June 2008 Aegis confirmed it would take a 15% placement in LFE. • On 10 June 2008 Messrs Bellman and Milne met with Mr Booth at Asandas' office. • On 10 June 2008 LFE requested an Opex draw-down of US$1 million with a draw-down date of 27 June 2008. • On 11 June 2008 Messrs Bellman and Milne met with Mr Booth at Asandas' office. • On 12 June 2008 LFE received a signed subscription agreement from Aegis. • On 12 June 2008 LFE issued a Notice of General Meeting pursuant to requisition by Bell IXL. • On 13 June 2008 Global Proxy Solicitation Pty Limited ('GPS') wrote a letter of engagement to LFE. • On 16 June 2008 LFE announced an issue of 18,483,578 fully paid shares to Aegis. This raising is intended to limit the need to access the cash that is currently held in the Company's bank accounts, primarily secured from the loan made by Octapharma AG. We note that if shareholder approval is not obtained for the Octapharma transaction it will be an event of default under that loan agreement. 16 Bell IXL submitted that the above objective facts, circumstances and series of events and the contemporaneous documents overwhelmingly either directly evidenced or supported the inference that the allotment in question was for the ulterior purpose by the directors of LFE to defeat Bell IXL or some other perceived predator to enable the directors to 'hold on' and 'keep their shell'. It was submitted that the Booth email set out precisely what it was that the directors of LFE were seeking to do in making the placement. The response of 'Let's do it boss' after an interval over three hours demonstrated that the placement was not, it was submitted, simply a bona fide commercial decision by Aegis to invest in an Australian company. 17 It was further submitted that there was virtually not a single contemporaneous document relied upon by the defendants which objectively supported the defendants' case as put to this Court. An attack was then made upon the evidence of each of the directors which it was said should be rejected against the background of any contemporaneous documents which materially collaborate their version of what occurred and in the face of contradictory documents. It was particularly noted that the directors did not properly consider or document their concerns or their alleged need to seek a capital raising. Reference was made also to the failure of the directors in relation to obligations to give discovery and produce relevant documents which was said to be a compelling reason for caution being exercised when approaching the uncorroborated testimony of the directors and other witnesses called by the defendants. It was contended that the only objective contemporaneous evidence for the purpose of the allotment to the Aegis parties was the Booth email. 18 The Booth email was sent after the meeting between Messrs Bellman and Milne and Mr Booth sometime in May 2008, but it was contested as to when the meeting occurred. The importance of determining the date of the Booth meeting is that it would assist in a determination of what the directors of LFE knew or could have known at the time of the meeting, and what the content of the Booth email means or could mean having regard to the events that had occurred prior to the meeting. I will return to the Booth meeting and Booth email later. 20 Before going to these and other matters it is convenient to deal with matters of legal principle. It was submitted the Court must be satisfied that the allegations are made out having regard to the gravity of the matters alleged and that such satisfaction must not be produced by 'inexact proofs, indefinite testimony or indirect inferences'. 22 It is undoubtedly plain as stated in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 ; (1992) 110 ALR 449 at 450 that the principles in Briginshaw do not create any different or intermediate standard of proof between the civil standard of on a balance of probabilities and the criminal standard of proof of beyond reasonable doubt. Clearly where there is an allegation of impropriety or criminal or fraudulent conduct then a court should not lightly make a finding of a person being guilty of such conduct. However, the essential task always remains of looking at the evidence in its totality and determining whether a party has proved on the balance of probabilities the factual matters required for that party to succeed. 23 Secondly, the applicable law concerning improper purpose does not seem to be in contention. It must not be used under the cloak of such a purpose for the real purpose of benefiting some shareholders or their friends at the expense of other shareholders or so that some shareholders or their friends will wrest control of the company from the other shareholders. It was submitted by Bell IXL that the expression 'under the cloak of such a purpose' was an apt description of the allegedly false reasons for the placement given by LFE's directors. 25 It is clear that the power to issue shares must be exercised for a proper purpose. Directors are not entitled to use their power of issuing and allotting shares merely for the purpose of defeating the wishes of an existing majority of shareholders or maintaining their own control of the company. 26 Directors of a company cannot ordinarily exercise a fiduciary power to allot shares for the purpose of defeating the voting power of existing shareholders by creating a new majority ( Whitehouse v Carlton Hotel Pty Ltd [1987] HCA 11 ; (1987) 162 CLR 285 at 289 per Mason, Deane and Dawson JJ). In many a case this may be true as a proposition of fact; but in our opinion it is not true as a general proposition of law. An inquiry as to whether additional capital was presently required is often most relevant to the ultimate question upon which the validity or invalidity of the issue depends; but that ultimate question must always be whether in truth the issue was made honestly in the interests of the company. 30 Further, I accept that even an honest and good faith exercise of power by directors may nevertheless be improper. 31 Thirdly, I make some observations on the factual enquiry necessary in identifying the purpose for which a power may be exercised. It may be possible to conclude on a collective reason or purposes of a board comprising multiple directors, even though each statement by a director of his or her reasons or purposes may differ (see eg Langton v Forsayth Mineral Exploration NL (1975) 1 ACLR 227). This is not to say that each director's position must not be analysed separately; but I must determine the substantial purpose of the directors (if necessary the majority of directors) which is causative of the decision being made to allot the shares (see Harlowe's [1968] HCA 37 ; 121 CLR 483 and Re Southern Resources Ltd (No 2) (1989) 15 ACLR 770). Obviously, I must have regard to the circumstances surrounding the decision in question, as well as the evidence of the directors themselves. 32 Nevertheless, the court should be aware not to substitute its own commercial judgment for that of the directors. There is no appeal on merits from management decisions to courts of law: nor will courts of law assume to act as a kind of supervisory board over decisions within the powers of management honestly arrived at. 36 This is not to say that the court cannot examine the objective commercial justification of a course of action to assess the credibility of assertions by the directors as to their motives and purposes: see Re Southern Resources Ltd (No 2) 15 ACLR 770. 37 Ultimately, each case must turn on its facts, after an assessment of all the evidence, which includes the documentary material, but read in light of other admissible evidence which may impact upon the meaning to be given to documentary evidence and the context of such documentary evidence and the proper inferences that may be drawn. The evidence of directors must be considered and evaluated, always in the context of the other evidence before the court. In some circumstances a court may reject the evidence of directors, not because it is intentionally false, but because in the circumstances the overwhelming context is to the contrary, which leads the court to conclude that the evidence of the directors is more reconstruction than recollection. I have come to the view that I should accept the evidence of each of the directors and Mr Waller of Aegis. They all answered the questions asked of them directly and without prevarication and, in my view, honestly. For the reasons given in the course of this judgment, I do not accept that the context of the allotment of shares is overwhelmingly against the evidence given as to the purpose of the allotment. There was a commercial basis for the allotment and, in my view, it was appropriate as a matter of business judgment for the directors in view of the history of LFE and potential future activities. 39 One attack upon the credibility of the directors was based upon the lack of any proper board papers and lack of documents evidencing any real search for the placement of the shares. 40 Bell IXL's contention was that the lack of any proper board papers and the lack of documents evidencing any real search for a placement was the best evidence of the improprieties of the directors. However, as I have said, I am satisfied that it was not the practice of these directors to record in writing, whether by diary note or otherwise, the content of ongoing discussions amongst themselves or with third parties. The directors did not run LFE by recording or minuting each step of every transaction. Of course, it is not the function of the board minutes to confirm decisions, such as the decision taken on 19 May 2008 to meet with Mr Booth on 20 May 2008 to discuss the placement. The fact that the directors so acted is consistent with the circumstances of the directors assuming their defacto 'executive' roles at a critical time for LFE, where it had no staff in Australia, and where the directors were compelled to perform all the executive and non-executive functions in order to assist the management of the company. 41 It would be one thing if every other negotiation or transaction and the like conducted by the board had been meticulously recorded. In such circumstances, the absence of documents in this one transaction might be the basis of an appropriate inference. I find that the directors conducted negotiations on the telephone and habitually conferred with each other either in person or on the telephone without making notes of their negotiations or discussions between themselves. 42 Further, it is not uncommon practice for even complicated deals to be negotiated orally and then left to the lawyers to sort out the detail. This transaction had relatively simple parameters --- 15% of the shares at 7 cents per share to be placed with a principal or nominee. The documentation following the agreement was fully documented. 43 Bell IXL also relied heavily on certain fees that were approved by and paid to the directors. This was done by Bell IXL in an attempt to discredit the directors, and also to demonstrate the real purpose of the allotment. The evidence from the directors is that each of them had undertaken substantial work for LFE, indeed more substantial and time-consuming that they had each appreciated before they were appointed. They were each taking on the role of executive managers to a lesser or greater degree. The work each director did was on an as needs basis and this work had significantly increased over several months. It was not a normal consultancy situation where one would expect a written consultancy agreement. There may have been good reason not to bill the company for these fees at least until mid-April, as the company did not have the funds to pay them. I do not consider there have been any double payments, nor am I prepared to accept that the amounts paid were excessive in the circumstances. Therefore, I do not regard this aspect of the attack upon the credit of the directors as being successful. 44 Bell IXL also sought to attack the credibility of the directors in view of the admittedly late production of an email (which was exhibit P9) and some other documentation. I do not regard the documents produced late as critical to the share placement, nor that their late production warrants an inference that the late production was deliberate, or in any event, should lead to the conclusion that the directors should be disbelieved on the central issue of purpose. 45 There is one other important matter to observe about the directors' evidence. Each gave evidence about their reasons for the allotment. I have considered their evidence separately as to his or her purpose for the allotment of shares. I have accepted this evidence. In giving their evidence the directors did not rely upon formulaic answers or give word by word consistent responses, but gave evidence about their own individual positions in a full and frank way. It seemed to me that there was no indication that the directors came together to give evidence which was deliberately framed for the purposes of defeating Bell IXL's application. I will return later to the commercial rationale for the allotment and the evidence of the directors in this regard. 46 It was also submitted that Mr Bellman gave false evidence about what and when he was told information concerning Aegis. He was attacked on one of his affidavits filed in the proceeding. I did not read Mr Bellman's affidavit as detailing specifically and exclusively all the information he was given on 4 June 2008 when he spoke to Mr Booth. In his affidavit, Mr Bellman set out information, some of which he said he was told on 4 June, and other material which he was given later, obviously by 27 June 2008. I accept that Mr Bellman did not receive all the information about Aegis as early as 4 June 2008, but I do not consider that his affidavit and evidence before me was misleading in this regard. 47 There were specific attacks made by Bell IXL upon the credit of Ms Calhoun. I do not consider that any of the specific matters raised against her indicate that she was giving false evidence: the fact of a failure to recall certain matters or that she made an initially incorrect answer which was corrected does not lead me to disbelieve her on the critical evidence as to her purpose. I accept that her evidence of the events at the board meeting on 20 May 2008 was likely to have occurred, and whilst some details may have differed between her evidence and that of Messrs Bellman and Milne I do not regard these differences as material. I accept that she did have discussions with the other directors outside the formal meetings, and do not find it surprising (as she indicated) that a meeting may pass a resolution with little or no discussion when the discussion had already taken place outside the formal meeting. 48 There was also specific attacks made upon the credit of Mr Milne. It was said that Mr Milne gave false evidence that the placement took place prior to 23 May 2008. He did originally say the placement took place prior to 23 May 2008 but the context of the cross-examination shows a confusion on his part. When the questioning persisted and was repeated, Mr Milne readily accepted that there was no firm or binding arrangement prior to 23 May 2008 in relation to the allotment. I do not consider that this aspect of his giving evidence, either separately or read together with his other evidence, shows that Mr Milne is not to be believed on the question of purpose. 49 It was contended by Bell IXL that I should also disbelieve the explanation given by Mr Milne for his failing to give evidence in the prior hearing. Mr Milne said that he relied upon legal advice and as a consequence of that advice did not give evidence in the prior hearing. The circumstances have changed that formed the basis of that legal advice, and there was now no impediment to him giving evidence before me. For myself, I accept this explanation and consider the explanation to be probable and consistent with an approach that would be adopted upon taking legal advice by a witness in a similar position to Mr Milne. 50 Mr Milne was also attacked on the basis of answers he gave as to the 18 April 2008 ASX release in relation to his understanding of the term 'operational requirements'. It appears that this release was drafted by lawyers retained by LFE, primarily upon the instructions of Mr Bellman. I do not regard in particular Mr Milne's explanation of what the term 'operational requirements' (or as referred to in cross-examination, 'operational expenses') meant in the release as necessarily conclusive; nor do I consider that his view of the term impacted upon his credit. He seemed to me to give an explanation based upon his own understanding, which may or may not have been the correct interpretation to be given to the release. 51 In relation to Mr Waller, he also gave evidence in a way which indicated to me that his responses to questions were honest. He answered the questions without procrastination, and candidly accepted that the method he adopted may not have been completely prudent. However, he demonstrated to me that he acted as an investor who was prepared to take some risk, although perhaps not always acting prudently. The nature of his relationship with Mr Booth and the nature of this transaction lent support to the version of events Mr Waller attested to before me. I therefore accept the evidence of Mr Waller. He has had considerable experience in business and investments. I accept that he considered an investment in LFE to have great potential if the Octapharma transaction were completed, and to be an opportunity for further investment. I do not consider that the decision for him to invest would have been too difficult to make, nor would have required too much consideration, having regard to the amount of the investment and the relatively simple nature of the investment. 52 I will return to the Booth email later, but I observe here that Mr Waller did not treat the full content of the Booth email with much seriousness, particularly as to the purpose of the directors. He did not make an immediate decision to undertake the placement, but did decide to further negotiate and consider the proposal. In this context it is not surprising that Mr Waller did not question the directors as to their purpose; he did not treat the Booth email as a basis for so questioning the directors, and no other indication was made to him to show any obvious improper purpose. 53 Finally, I accept that Mr Waller's later view about voting at the meeting convened to remove the directors was motivated by Mr Waller's dissatisfaction with the attitude of Bell IXL in seeking the injunctive relief in this proceeding, and it was not part of the implementation of some agreement with the directors entered into in May or June 2008. 55 It is apparent that at least up until April 2008 LFE was in a precarious financial position. Further, there was some discussion in relation to seeking capital raising by share allotment prior to May 2008. Bell IXL says that these discussions related to finding large sums of money in the order of $5 to $20 million and not smaller amounts of capital under $5 million and that this is a critical difference. Bell IXL further says that none of the documentation is consistent with the smaller raising of less than $1.2 million raised by the private placement in issue. 56 Undoubtedly Bell IXL is correct in the focus being upon a larger amount. However, I do not think that one can dismiss the earlier discussions as to capital raising as not being a matter that is important for me to consider in the context of all the evidence that is before the Court as the purposes of the directors in later making a private placement. This historical perspective gives the Court an insight into the directors' approach to or philosophy about capital raising, and can be viewed to determine whether the allotment in issue was consistent with such a view or philosophy, or a completely new concept for the directors. In my view, whilst the amounts involved were substantially different, the earlier discussions on capital raising did have at least two important similarities with the allotment in issue: the acceptance of the desire for some capital, and the finding of a person to assist later with an injection of capital. Further, the directors did have an interest in trying to avoid the depletion of cash reserves where possible. 57 Both Messrs Bellman and Milne upon appointment to the board considered the financial restructuring of the company. I accept that soon after his appointment Mr Bellman discussed a variety of options for seeking additional capital with Mr Milne. In about March 2008, Messrs Bellman and Milne told Mr Riddell that LFE wanted to raise additional capital or equity and did want to 'burn' the lump sum of money paid by Octapharma. A two-step process was considered: a placement and then a rights issue with a prospectus. 58 The philosophy was not very different to what was ultimately agreed with Mr Waller on 4 June 2008. In my conversations with the directors described above, at least 1 of them told me that LFE wanted Aegis to invest further funds in LFE in the future to participate in such identified investments. I told the directors that that suited Aegis, or words to that effect. 59 The maximum that could be raised by placement was 15%. From the beginning of their tenure the directors wanted to avoid depleting, where possible, its cash reserves. The [LFE Group's] ability to continue as a going concern is a dependant on the Group being able to raise sufficient capital or funding to meet its working capital needs and service its existing debt until it obtains shareholder approval to sell its existing operations and generates sufficient funds to renegotiate or repay its liabilities. ... If the company is unable to complete the above sale transactions with Octapharma AG and is unable to obtain alternative funding sources at an amount and timing necessary to meet its operational plans and business activity the company may be unable to continue as a going concern. 60 I do not view the Octapharma loan and 'alternative funding' as mutually exclusive objectives. Even when LFE issued a draw-down notice for the sum of US$37.1 million under the Octapharma loan facility, Mr Bellman met with Mr Currie of Zeus Capital, a man introduced to LFE by Camino Capital and with considerable knowledge and experience in capital fundraising. 61 The need for LFE to conduct a capital raising was one of the topics Messrs Bellman and Milne first raised with Ms Calhoun when she was considering joining the LFE Board in late April 2008. On 27 and 28 April 2008 Ms Calhoun met with Messrs Bellman and Milne in Sydney. Together they discussed the parlous state of LFE and the need to raise capital. Messrs Bellman and Milne told Ms Calhoun that they were already in discussions with other parties about raising capital. 62 The ASX releases on 14 April 2008 and 18 April 2008 may demonstrate a willingness or commitment by LFE to spend the Octapharma monies but do not mean that LFE was not able to consider a placement. The ASX releases do not amount to a statement that the company was only to spend the Octapharma monies and would do so without exploring the alternative funding adverted to in the half-yearly report on 14 March 2008. 63 I do not consider that it can be said that the private placement which occurred was actually contemplated in February, March and April 2008, before Bell IXL came onto the scene. The placement was of a much smaller amount and Mr Riddell was no longer retained as a financial adviser to give continuing advice. However, in my view, the events prior to May 2008 indicate an approach of the directors consistent with the approach they say they adopted in carrying out the private placement, and as such support their version of events. The following events occurred prior to the Booth meeting. In early May 2008 Mr Milne told Mr Booth that LFE was looking for investors who might provide capital to LFE. Mr Booth told Mr Milne that he might have some investors interested in taking a placement of shares in LFE. Mr Milne told Mr Booth that he would organise a meeting and that Mr Bellman would also attend. 65 I find that the Booth meeting occurred at or about 5.30 pm on 20 May 2008. Compared to Mr Booth's inexact recollections and lack of any proper diary notes, Mr Bellman seemed to keep a more meticulous diary of his own commitments. • There is the evidence of Ms Calhoun (which I accept) that on 19 May 2008 she discussed the placement with Messrs Bellman and Milne and that they informed her that a meeting with Mr Booth had been arranged for and was to take place on 20 May 2008. • There is the evidence of Messrs Bellman and Milne (which I accept) that the meeting occurred on that day. He does not name Bell IXL. If, as Bell IXL contends, board control was at stake, it is inherently improbable that Mr Booth would have been told 7% if the directors knew that a group had 8.75%. • Whilst Mr Booth did say in cross-examination that he recollected that Bell IXL was mentioned to him in the course of the meting (which would mean the meeting would have to have been on or after 23 May 2008) this is nowhere mentioned in his contemporaneous notes or email and I think he was mistaken in giving his evidence as to the time he was told of the existence of Bell IXL. At the time he gave this particular evidence Mr Booth was in some pain, and this could have affected the giving of his evidence on this aspect. • Whilst one would have expected the follow up email of 3 June 2008 to have followed closely upon any meeting, I do not regard the gap between 20 May 2008 and the sending of the email as determinative of the date of the meeting being other than 20 May 2008. In my view, the email merely contained Mr Booth's opinion that the placement was being done to assist the directors to 'hold on' and because they did not want to 'lose their shell'. He was not told these matters by any director. The email cannot otherwise be attributed to LFE. It was not seen by the directors of LFE, nor in any way adopted by them. Mr Booth and Asandas were not agents of LFE. The recipient of the Booth email, Mr Waller, gave evidence that he did not place much store upon all that was contained in the email. That was --- as I said, they said they'd been paid 37 previously, there was 20 odd in liabilities, there' s 17 left there in cash and if the transaction is not approved then that --- how that money is going to be returned, I have no idea. 68 The fact that he was told that the directors wanted to make the placement and did not want to 'touch existing capital' supports the view I have taken that I should accept Mr Booth's evidence that he merely 'inferred' that the board wanted to 'hold on'. 69 It is also of significance to note that the Booth email does not state that it would be a condition of taking a placement that Aegis would vote in favour of the current board. If the alleged improper purpose had existed, it would have been prudent for the LFE board to obtain some comfort that they were placing shares with an ally, rather than an unknown party. Subsequently, LFE was content for Aegis to place the shares to nominees without the need for LFE's consent. The subscription agreement gave Aegis the opportunity to place the shares to a nominee, without requiring LFE's prior approval. LFE therefore had no control over whether the placed shares would vote or how they would vote at the general meeting. If LFE's purpose had been to 'hold on', this critical detail would have been attended to and the recipient's voting intentions confirmed, and this would have needed to be addressed in the Booth email. 70 Whether or not Mr Booth was guessing as to the purpose of the directors, deliberately trying to entice Mr Waller into action, or making an inference he was confident was true, the Booth email, either alone or in conjunction with the other evidence in this proceeding which I have accepted as true, does not result in Bell IXL demonstrating the improper purpose relied upon by it. Whilst Mr Booth could not explain what really led him to form the view he did as expressed in the email, at best the email reflects only his impression of the position. After hearing all the evidence (including from the directors), we have proceeded well beyond the realm of impression, speculation or conjecture. Undoubtedly there is no exactness in the language and expression of purpose, but this is to be expected. As I have alluded to previously, I would have been more concerned if each director had adopted a formulaic response when asked about his or her purpose. 72 In my view, the important theme which is found through the evidence is that the directors were looking for future additional capital funding, not just an immediate need. It was important that the entity who made the placement would contribute further to LFE. 73 Therefore, whilst it may be that any current shortfalls between revenue and expenses could be covered without the placement, this would not indicate that the purpose of the placement was not looking to the future. 74 The fact that the monies raised by the placement were insufficient to fund the expenses, and so at best would only 'limit' the need for LFE to access cash it had as an investment, would not mean the purpose ascribed by the directors could be categorised as irrational if part of the rationale is the future needs of LFE. Similarly, the fact that the Octapharma transaction not being approved would mean that any cash raised would be pointless (as without the approval LFE would probably not survive) does not mean that the directors could not undertake the strategy of future planning in the way they envisaged. In any event, assuming that the Octapharma transaction was in all likelihood to be approved, which was the assumption of the directors, it was rational to provide for a future strategy (which included accessing a person to provide future funding) in the event that the Octopharma transaction was extended or there were issues with its immediate acceptance. These were all matters which seem to me to be matters of judgement and opinion, and necessarily relate to a director's view of the future. The recent historical precarious financial position of the company was a matter the directors could, and did, have regard to in determining the appropriate way to proceed. 75 Bell IXL put some emphasis upon Mr Milne's evidence of needing to 'stabilise the register' of LFE as supporting the allegation of improper purpose. A fair reading of this reference to stabilising the register in my view merely indicates that he was referring to the need to find a person who may be able to provide further funding in the future. There were multiple objectives. The first was to introduce a shareholder to stabilise the register who had the ability to fund the second tranche of funding post Octapharma transaction. The second was to provide interim working capital to the holding company. And the third was to provide more funds to the company in the event that the Octopharma transaction for some reason was extended or there was an event of default, and would give the company some funds in order to negotiate during that interregnum. 77 Therefore, it seems to me that once it is accepted that the strategy of the directors is that of a two-tiered approach, the contentions made by Bell IXL have insufficient impact to enable one to conclude that the placement was in the circumstances irrational. 78 As I have said, I accept that there were differences in the evidence of each director as to the purpose of the placement, but both Messrs Bellman and Milne referred to the two-tiered approach. The more recently appointed director, Ms Calhoun, focused upon the immediate need until such time as the shareholders were in a position to decide on the Octapharma transaction, and discarded the issue of dilution. However, she discussed the matter with the other directors who, as I have decided, did have the two-tiered approach in mind. In any event, the clear purpose of the majority of the directors was with respect to the future needs of LFE and not just its present need. There was no evidence to find that the directors knew of the existence of Bell IXL prior to 23 May 2008, so in this proceeding Bell IXL could not rely upon the directors' specific knowledge of Bell IXL if the Booth meeting occurred on 20 May 2008 (as I have found). 80 I do not consider that the request for and the provision of share register information in May 2008 has any significance, or leads to the conclusion the board was concerned with predators. In my view, the board wanted to develop a standard format for the making of board minutes and the running of meetings. The April 2008 figures were requested in an attempt to develop a standard format in circumstances where there was a new Company Secretary. 81 I observe that the board did not receive the May trading results until after the 23 May 2008 Notice of Substantial Shareholding by Bell IXL. If the directors shared the concerns that Bell IXL alleged, they probably would have sought all relevant share register information available on 20 May, not information that was already 20 days old. 82 Mr Milne said that he had suspected Kedrion was the third or fourth largest shareholder on the register in February and March 2008. The evidence before me does not suggest that the nominee entities through which Kedrion may have been acquiring shares increased their holding in April 2008. There was no evidence to suggest that Kedrion wanted control of LFE and it was never suggested that Kedrion had a 7% shareholding. No tracing notices were issued in April or May 2008. If there was a real fear of a predator like Kedrion, one would have expected that the directors would make the placement earlier, check the register between 1 and 20 May 2008, and seek more urgent attention from Mr Booth to contact a potential investor. Now, sitting here and talking to you now, I can't recall the date when that became apparent. If that was late in May then that's the trigger for me. 84 HSBC only held 1.22% of the shares in LFE on 19 May 2008. There was no evidence that the directors were observing the daily register at or around that time. Mr Bellman gave evidence that directors only started checking the daily register after 23 May 2008. There is no evidence that I can find that allows me to conclude that on or prior to 23 May 2008 any of the directors (including Mr Bellman) knew HSBC appeared on the register. 85 As to the general trading movements which it is said by Bell IXL were of concern to the board, they do not represent a marked departure from what the board could have ordinarily expected. In fact, the top 20 shareholders remained largely stagnant when one compares January, February and March 2008 with the April 2008 figures. On the evidence before the Court, it does not seem to me that the board would have had any reason to be concerned over the trading movements relied upon by Bell IXL. 86 As to the board's knowledge and concern of predators, Bell IXL relied upon the Booth email and the evidence of Mr Booth. I accept that Mr Booth was an honest witness but that his recollection was not completely sound. I do think that he was in some way confused and was not aware of the actual sequence of events. As I have previously observed, whilst giving his evidence he did seem distracted by some pain which may have affected his concentration. Mr Booth must have been wrong about his reference to the 7% because there was never at any time before or after May 2008 any person or group that bought 7%. There was a reference to 8% in his contemporaneous note but that was not explained. Mr Booth was quite clear that he was never told by any director that they wanted a placement to 'hold on'. Nor was he ever told by any director that they did not want to 'lose their shell'. Mr Booth did say that the existence of Bell IXL was something mentioned at the meeting, but I think again he must have been mistaken as to this because if the meeting was as I have found on 20 May 2008, the existence of Bell IXL would not have been communicated to him nor would it have been something which he could have known about from talking to the directors. 88 The first fact is the retainer by LFE of GPS. GPS is an organisation that provides 'strategic shareholder communications advice and programs'. It helps a company ensure that its shareholders 'are aware and clearly informed about the merits of any proposals [put by the directors]'. It encourages shareholders to 'vote in favour of each resolution' put by the board. GPS was appointed on 13 June 2008, the day after the subscription agreement was executed. It was paid $60,000 on account of its services. I accept that GPS was appointed to assist the company in obtaining shareholder approval for the Octapharma sale. GPS seemed to be also intending to solicit shareholders to vote against the resolution to remove the board. However, I accept that this was not the purpose of the LFE directors retaining GPS. The purpose of the retainer was set out in the retainer itself, and I accept the evidence of Mr Milne that, in effect, GPS in intending to solicit shareholders to vote for the existing directors to remain was not something directed or condoned by the board. 89 Another fact relied upon by Bell IXL was that the transaction was effected quickly and without proper consideration, and reference was made to Mr Waller's acceptance within just three hours or so. The reference to 'Let's do it boss' upon receipt of the Booth email was explained by Mr Waller not as an acceptance of the deal, but an instruction to proceed. Mr Waller said (which I accept) that this reference to 'Let's do it boss' was slang for 'I will look at it'. So it is not correct to conclude that Mr Waller took only three hours to decide to take the placement. In any event, the decision was not necessarily a difficult one to make for a 'risk taker' or experienced investor like Mr Waller. For 15% of capital at $0.07 per share in a cash box of $18 million, the return on investment would be somewhere between $0.13 and $0.14 per share. The placement would not be expected to be made at a discount as the volume weighted average price for April and May averaged between $0.07 and $0.08. The placement would not have been made at a higher price, despite the projected net tangible asset backing, because Aegis could otherwise have simply bought on market. Further, Mr Waller's evidence was that the transaction was not done 'urgently or particularly quicker' than other placements in which he had been involved. Further, the transaction was not of a great magnitude compared with other transactions undertaken by Mr Waller. 90 Finally, Bell IXL relied upon the email from Mr Bellman to Mr Baguley of 9 July 2008 to support the contention that the defendants had entered into an arrangement for the directors to remain in control. 91 Mr Waller denied the existence of any arrangement with the LFE directors as to how the shares would be voted, as did the directors. I accept their evidence. 92 In my view, this wording of the email does not detract from the view that I have otherwise taken as to the events that occurred in May 2008. I am not persuaded that an improper purpose activated the share placement. By 9 July 2008 it may be that Mr Bellman was trying to assist Aegis, but I do not infer that this relates back to being a quid pro quo for the placement that was in fact made earlier. It may have been that Mr Bellman was wanting to secure a favourable vote from Bell Potter. That may have been why Mr Bellman did not want 'to risk leaving this [return of proxy] to the last minute'. Or it may have been merely that Mr Bellman, thinking the risk was in any event with Bell Potter, wanted to ensure the arrangements in relation to the proxies were in place so everything was in order. Whatever the reason, I am not persuaded that the wording of the email supports an inference of an improper purpose of the kind alleged by Bell IXL. 93 It was also submitted that I should draw an inference that this email of 9 July 2008 was part of the overall plan to consolidate the directors' control of the company, reinforced by the failure to call Mr Baguley; reliance was placed to this end upon the principle in Jones v Dunkel (1959) 101 CLR 298. Of course, the failure to call evidence may, not must, lead to an inference that the uncalled evidence would not have assisted a party's case. The application of the principles in Jones v Dunkel must be applied in the context of the evidence that is presented to a court. Assuming that the defendants were in a position to call Mr Baguley, I do not regard the email as of sufficient significance to consider Mr Baguley to be a witness expected to be called. Further, on the evidence presented by Bell IXL, I would not otherwise require an explanation of the email of 9 July 2008 in circumstances where the main issues of fact relate to the events in May 2008. In this hearing, all of the directors and Mr Waller gave evidence and were subject to cross-examination on all the issues raised for determination between the parties, including the existence of some impermissible arrangement between the defendants. 94 I am not saying the email of 9 July may not be relevant to showing (on Bell IXL's case) an overall strategy of improper purpose. However, in the end, the conclusion I have reached is that irrespective of the wording adopted in the 9 July email, the purpose in making the allotment was not that described by Bell IXL. I have reached this conclusion on the basis of all the evidence before me including the evidence of all the actual persons involved in the decision-making in May and June 2008. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | directors' duties acting for a proper purpose where plaintiff a shareholder in first defendant where plaintiff requisitioned first defendant to convene an extraordinary general meeting of shareholders to consider a resolution to remove board of first defendant and replace it with three persons nominated by plaintiff where first defendant subsequently issued new shares whether new share issue was made for purpose of defeating plaintiff's resolution and therefore improper assessment of evidence and credit of directors of first defendant briginshaw principle difference between inference and conjecture "proper purpose" "improper purpose" corporations words and phrases |
On 17 November 2005, the applicant applied to the Administrative Appeals Tribunal ("the Tribunal") under s 500(1)(b) for review of this decision. On 25 January 2006, the Tribunal affirmed the decision under review: see Pizlea and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 49. On 23 February 2006, the applicant sought review in this Court of, amongst other decisions, the decision of the Tribunal. To the extent that the applicant seeks to challenge decisions other than the Tribunal's decision, the application is incompetent. The applicant is a citizen of Romania and was born there on 7 March 1964. He arrived in Australia on 25 February 1990 on a subclass K4C23 (Unfunded SHP --- East Europeans/Romanians) visa granted on 22 February 1990. Under the Migration Reform (Transitional Provisions) Regulations 1994 (Cth), the applicant was deemed to be the holder of a transitional permanent visa from 1 September 1994. 3 Between 1991 and 2001, the applicant was convicted of a number of offences committed between 1990 and late 1996. These offences included drug offences for which he was given sentences totalling over 12 years imprisonment. The applicant has periodically denied committing some of these offences. However, the fact of conviction, as found by the Tribunal, cannot be disputed. 4 On 3 November 1995, an officer of the Criminal Deportations section of the Department of Immigration and Ethnic Affairs wrote to the applicant to inform him that his conviction on 18 November 1992 for supplying a prohibited drug made him liable for deportation under s 200 of the Act , but that the Minister's delegate had decided not to order his deportation in this instance. The letter warned the applicant that any further conviction would lead to reconsideration of the question of deportation. 5 In 1996, the appellant was charged with a drug offence committed on 15 September 1996. After conviction and before sentencing, the applicant absconded. He was later apprehended and, on 27 April 2001, was sentenced to six years imprisonment. On 8 April 2005, a delegate of the Minister decided to cancel the applicant's visa on character grounds, under s 501(2) of the Act . The applicant filed an application for judicial review in this Court on 17 June 2005. It appears that the Minister conceded that the decision record referred to an incorrect visa. On 12 October 2005, Finn J ordered, by consent, that the decision of the Minister be quashed. 6 On 9 November 2005, a delegate of the Minister made a further decision cancelling the applicant's visa. He was released from prison on 11 November 2005 and immediately transferred to the Villawood Immigration Detention Centre. He remains in detention. On 17 November 2005, the applicant applied to the Tribunal for review of the 9 November 2005 decision. The appellant was represented before the Tribunal, where both he and his de facto wife gave evidence. The real issue therefore was whether the Tribunal should exercise its discretion under s 501(2) to permit the applicant to remain in Australia notwithstanding he did not meet the character test. 8 It was part of the applicant's case that he had a genuine ongoing relationship with an Australian citizen and had a dependent child who was an Australian citizen. In his evidence, he explained that when he had been located by NSW police before being extradited to South Australia to face sentencing, he had a job, paid tax and provided for his daughter, although it was only for 18 months that all three had lived together. He had remained in contact with his daughter and her mother. His said his daughter spoke no Romanian. He said it was in his child's best interests that he remained in Australia and that it would be against Australia's international obligations "in terms of the International Convention on Civil and Political Rights (ICPR) and the Convention on the Rights of the Child" to remove him. 9 The applicant's de facto wife gave evidence that she was in daily contact with him, that she visited the applicant a couple of times a year with their daughter and that their daughter asked her every day when her father was coming home. She also gave evidence of her employment and that she believed she was in a good financial position to support him until he found employment. 10 The Tribunal accepted her evidence but found the applicant's evidence "disputatious and evasive". It described his tone in his submission to the Department as accusatory and as displaying no awareness of the gravity of his crimes. This was supported by a report from his parole officer written in 1994 and a report of the South Australian Parole Board in 2005. The Tribunal considered that his evidence could have been affected by anxiety or a combative disposition, but found he had "no clear willingness to acknowledge his offences, let alone any remorse for them" and that he had "a highly developed ability to rationalise his own wrongdoing and to some extent is able to convince himself of the truth of his own fabrications". 11 In deciding whether to exercise the discretion not to cancel the applicant's visa, the Tribunal had regard to Direction No 21, issued by the Minister under s 499(1) of the Act . Under s 499(2A) , the Tribunal was bound to comply with that Direction, which provided guidance to decision-makers on the application of the character test including the considerations to be taken into account in exercising the discretion when the person does not pass the character test. The Direction set out three primary considerations to which regard must be had, although the decision-maker was also required to adopt a balancing approach which took into account all relevant considerations. The three primary considerations were the protection of the Australian community and its members, the expectations of the Australian community, and, where applicable, the best interests of the child or children with whom the person under consideration had a parental or other close relationship. The Tribunal addressed in detail these three considerations and the relevant cases. It then proceeded to consider a range of other relevant considerations which, in its view, might have had a bearing on the correct decision. Ultimately, it found that whilst it was not in the best interests of the child to affirm the decision, and that certain other considerations also weighed against that course, those were outweighed by considerations of community protection and expectations. It therefore affirmed the decision under review. The applicant was ordered to file an amended application. He did so though its character was the same. Over 63 pages (including pictures and cartoons) the applicant made many and varied assertions broadly concerning his circumstances. While at certain points in the documents language consistent with grounds of judicial review was used, no grounds of substance were articulated. In written submissions responding to written submissions filed by the Minister, the same approach was evident. 13 At the hearing, the applicant indicated he would rely on his written submissions (including a floppy disk containing his submissions in reply) though he also sought, unsuccessfully, to hand the Court what he described as some asbestos from the Villawood Detention Centre (which the applicant thought was relevant to his case) and documents including what I understood to be his daughter's citizenship papers. 14 One of the constant themes repeated in both the amended application and the written submissions in reply, was the consequences for the applicant's daughter of his removal from Australia. They would either be separated or she would be required to live in Romania, a country with which she had no real connection. This matter was considered by the Tribunal which correctly identified it as a primary consideration and, as noted earlier, concluded that it would not be in the best interests of the child to cancel the applicant's visa. But the Tribunal ultimately concluded, as it was entitled to do, that other considerations outweighed the adverse effect of its decision on the applicant's daughter. The Tribunal's consideration of this issue was, in my opinion, unexceptionable. It is a dilemma repeatedly confronted by the Tribunal in cases of this type. A recent discussion of how the Tribunal should consider this question of the interests of the child is found in the judgment of the Full Court in Kaur v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 70. 15 I have read the reasons of the Tribunal. It is not apparent that the Tribunal erred in its consideration of the interests of the applicant's daughter. It is not apparent that it otherwise fell into jurisdictional error. The application should be dismissed with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | no point of principle migration |
Subsets and Splits